To The Moon

Nvidia, the leader of U.S. stocks in the past two years, has not performed well in the past few weeks. Although the financial report is not bad, as the main promoter of the "predecessor" Biden, it is obvious that some glory is no longer in the context of Trump's second entry into the palace.

The fall in the weekly level of the previous week directly affected the price pattern. Will this mean that the U.S. stock market will take the lead in the change in the future cycle, or will the trend itself change?

Nvidia once fell below the weekly low at the end of October last week. Although it finally recovered and left a lower shadow line, it still ended the bullish pattern of "higher lows" after the June adjustment. Looking forward, the fall of the weekly swing low can be traced back to a year ago, when the stock price was only in the 40-50 consolidation range.

From a technical theory point of view, this is a signal that the market has initially peaked. Then, if you see the appearance of the second high point (that is, you can't refresh a new high) and break down the second low point again, you can clarify the change of trend. Considering the obvious upper shadow line left by the previous week's earnings report, if Nvidia wants to prove itself, it needs to respond with a new high.

Before judging whether it is a short trap or a prelude to a sharp drop, let's take a look at the progress of the Nasdaq.

After rising more than 5% in the election week, the Nasdaq has been in consolidation mode for the past few weeks. The technology stock relay model makes the index perform significantly better than Nvidia's individual stocks. In most markets, indexes and leaders achieve each other, so we can expect that if the index itself can continue to set record highs, then two directions can be drawn in the future: if Nvidia bucks the trend and falls, or even falls sharply, then the U.S. stock market will change the core target as the leading stock; If Nvidia is trading sideways or lagging behind the rally, the significance is the same; Only the emergence of individual stocks' compensatory gains will suggest that there is something wrong with our previous assumption (the new president will not continue the preferences and path of the old president).

In addition, another situation will be that the index itself has not reached a new high, and follows the downward trend of individual stocks from low points in the future, then this will represent a reversal of the general trend.

However, as we said last week, the oil price is still stuck to the low point, and judging from the situation of the S&P and the situation that the key support of the Nasdaq itself (18400/17435) is still relatively far away, there is no need to worry too much about the bull market turning into a bear market at least this year.

Within the time frame of Christmas and New Year's Day holidays, there is a high probability that the market will remain relatively stable. I personally prefer that if the market has a head, there will be a greater probability of synchronizing with the high point of cryptocurrency. At present, taking BTC as a reference, the market still has a cycle of 1-3 months and an upside of about 20%. Even if there are some sequential situations, neither of them will turn the trend soon.

From a trading point of view, if there is a rapid adjustment in the encryption market, it should be a good opportunity to get on the bus. The volatility and stability of U.S. stocks are better in themselves, so high volatility and slow bullish trends may not provide very good deals. On the whole, it will tend to continue the previous idea of rising and withdrawing.

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