A Technical Trifecta Post-NVDA

Markets fell sharply on Wednesday, taking the NAZ McClellan Oscillator below zero and the NYSE Summation Index deeper into decline.

The SPX turned its 3 Day Chart down with the index dropping just shy of a full test of its rising 50 day moving average.

In so doing, the index snapped a 3 point trend line connecting the March and May lows as shown in this space yesterday.

Following the close, NVDA reported a significant revenue, earnings and guidance increase. The stock’s price soared by 80 points from 300 to 380 which took the NDX futures higher by nearly 200 points and the SPX futures by about 20 pints.

On the heels of NVDA’s earnings, AMD, TSM and SMCI chip issues ramped.

However, the SPX will have its work cut out for it as it pushes into Phil D Gap from Wednesday, the overhead 20 day moving average at 4138 and the broken trend line from March at around 4145.

This is a powerful trifocal of technicals.

As well, it will have to contend with the Bear Market mid-point at 4155.

Look for a sharply higher open by the capitalization-weighted NDX and SPX averages. However, the DJIA and Equal-weighted SPX averages are lower in overnight futures markets, as the gains were limited to NVDA and several related issues that produce an out-sized impact on NDX and SPX…but have little effect on those not weighted according to capitalization.

As the government’s potential inability to fund its obligations is just days away, markets continue to be pushed and pulled by hope and despair. Over getting past the deadline without a catastrophic default.

Wednesday saw the DJIA sink to -300 then rally to near -100 , then drop down to near the day’s low by the close.

If the SPX rallies above Wednesday’s high today and then rallies above Thursday’s high on Friday it will be in the Minus One/Plus Two sell position following what looks like a false breakout and just after our May 17-19^th turning point.