Don here...
Sunday night futures opened down big and retested the late November lows. Gianni just flagged that move as a false breakdown, and the implications are massive.
The dip got bought. The S&P 500 is up around half a percent on the day, and the NASDAQ bounced hard off support after briefly taking out its early February low.
But the real story is underneath the surface.
Last week, defensive sectors sold off harder than growth. Consumer staples, healthcare, and utilities all dropped more than technology, consumer discretionary, and communication services.
Gianni says that pattern is the textbook signal of a market trying to carve out a bottom. Sellers in growth names are exhausted, and capital is rotating back toward offense.
Technology is now the top performing sector this week. If it holds that position through Friday, Gianni expects a squeeze that will leave most traders scrambling to catch up.
Here is what Gianni is watching in tonight's video:
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Broadcom beat earnings expectations last week, announced a $10 billion buyback, and confirmed the AI trade is still alive. The stock gapped up and closed near its weekly highs while almost nobody talked about it.
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NVIDIA has traded in a 50 point range for eight months, correcting through time instead of price. It just took out last week's high and is sitting at the highs of the day.
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The Mag 10 names are showing broad strength. Meta looks excellent, Tesla looks strong, and AMD is seeing a solid bid. The only weak link is Microsoft, which may have just formed a lower high.
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Crude oil saw a 30% plus correction from yesterday's high to today's low. Gianni calls the move historic by every measure and expects prices to settle in the 70 to 75 zone.
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Gold looks ready for another leg higher. Gianni is coming around to the idea that gold could rally to 6,000 to 6,200.
The Sunday night flush reminds Gianni of election night 2016. The initial crash gave way to a parabolic move higher that lasted months. He sees the same setup forming right now.
The VIX is still in backwardation, meaning near term volatility is priced higher than volatility a few months out. Gianni says it is too late to panic and that betting on more downside from here is not the wise trade.
Click here to watch Gianni break down the false breakdown, the sector rotation signal, and the levels that matter this week
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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