Stock Market Pushes NVDA Aside as SPX Rises, Crude Oil Falls

[00:00:00] Speaker 1: Let's bring in Kevin Green, senior markets correspondent, right away to help set up the action today. All right, KG, we started out the week with the bulls off to the races. Now we're sideways, choppy action. What's your big picture take? [00:00:12] Kevin Green: Yeah, I think we got to look at the technical setup here, Diane, for the E-mini S&P 500, because yesterday was a very strong day if you're looking at the equity market as a whole. But also, if you're kind of looking at it from a daily chart, you are seeing a little bit of a retracement back to the upside. And I'm looking at the last three candles, don't include today's candle, where we actually have an interesting pattern that's setting up here. It's called the Morningstar pattern. This is kind of signaling a little bit of a reversal. You have this flush to the downside that we had on Thursday. We were able to have this kind of indecision candle hold that 200-day moving average on Friday. And then yesterday, we were able to recapture at least 50% of that loss that we saw on Thursday. So that gives you the complete Morningstar pattern. That is actually bullish for this market, but we are still seeing that volume-weighted average price in purple acting as an area of resistance, and that's going to be the big headline mover for today. I think if we have CPI that comes in better than the street's expectations, you got to get above that anchored volume-weighted average price from the year-to-date lows in order to get a little bit confident. We also want to go to the NASDAQ chart, which is going to be next here as well, because, once again, tech did a phenomenal job yesterday, but if you look at where we actually stopped on the chart, it was pretty much right there at that 200-day moving average. So a good move to the upside. We still have a lot of room to go and a lot of technical damage to be able to try to repair here over the next couple of days. But I think we do have some headlines to hit the tape over the next 24 to 48 hours to give us the decision if we break down a little bit further or we kind of recapture some of these losses over the last couple of weeks and go back to new all-time highs. I'm a little bit more skeptical when it comes to that bounce back that we had yesterday, even though volume was actually relatively strong. [00:01:56] Speaker 1: Okay, all right. Let's talk NVIDIA. Catch people up on the latest there and what you're watching. [00:02:03] Kevin Green: It's like a soap opera, I can tell you that, Diane. It's a lot happening every single moment here. We know that CEO Jensen-Wang did admit to an affair with a potential Chinese spy, and there now is an investigation not only by the NVIDIA board, but also the FBI is looking into this as well. President Trump did bring that up yesterday during a press conference. The allegation is that NVIDIA moved around 240,000 H100s, H200s, as well as A100 GPUs into China or sent them over to Singapore in order for China to be able to utilize those. That's the allegation that's being brought against this potential Chinese spy by the FBI here. So this is going to take a little bit of time. Obviously, we are seeing the shares moving a little bit lower here over the last couple of trading sessions. There's kind of two different type of risk that is out there. Right now, it's key man risk. Dan Ives already kind of highlighted that in a post this morning. Could we see moves to the downside even further if Jensen-Wang were to be replaced as CEO? And then you also have the regulatory or potential risk of violating sanctions if there was willfully or knowingly trying to evade sanctions in order to give China this access. So I would expect that this is going to be a very long investigation. It seems like President Trump right now is on Jensen-Wang's side. So we'll see if that actually kind of plays into some of the politics. And if not, I mean, some of that, the trading action that we saw yesterday out of NVIDIA going into some of these other names was actually a little bit, gave you a little bit more confidence that the market maybe could be able to sustain itself if we do see a shakeup in leadership when it comes to NVIDIA. Because unfortunately, we don't have a clear successor to his role. [00:03:44] Speaker 1: And that's one of the things that Dan Ives said in his note as well. He says right now, the street and investor chatter is assigning a roughly 15 percent chance. He's removed as CEO with a high probability, essentially, the extrapolation from there that he would stay on as CEO. But obviously, he has to clear a board investigation. There's calls for him to come before Congress, FBI investigating. You've got shareholders angry as well. Let's continue our conversation within the—oh, go ahead. Go ahead. [00:04:13] Kevin Green: Chime in there. He's still acting as the CEO, though. So they have not actually kind of stopped his position and halted his day-to-day activities because of the investigation. I think that also does kind of signal something as well, just to kind of throw that out there. The board could have went a completely different route and basically suspended him in his role until the investigation was done. That's usually what we do see in events like this. That's just not the case this time around. I think that is something we also have to highlight. [00:04:41] Speaker 1: All right. And let's talk state of oil prices. We're pulling back once again. We're around $90 a barrel. We had been briefly below $90 a barrel on Brent crude. We're approaching—we're below $85 a barrel on WTI. Walk us through what you're paying attention to here. [00:04:58] Kevin Green: Yeah. So the market's getting a little bit optimistic that we could see a short-term deal that does not include everything that both sides wants, but some of the items for both sides, that that could be going across the finish line here over the next couple of days and weeks. Now, we've been speculating about this for a very long time, Diane, but we kind of see the stalemate when it comes to these strikes back and forth. We know that the Strait of Hormuz is still seeing a lot of activity when it comes to tankers being hit. And the U.S. is still hitting key parts of Iran, like Kashem Island, and trying to take out some of the radar as well as the launchers there. But there seems to be a little bit more of a stalemate. There's also a little bit of a shift in tone when it comes to President Trump's rhetoric post the election as well. So we are seeing the WTI as well as diesel, gasoline moving to the downside. Technically speaking, on the weekly chart, we have seen actually a breakdown of this kind of flag pattern to the upside here. And now you're actually looking at that 50-period moving average in yellow acting as an area of support. So around $82.90. We break below that. You're looking at around $75.50. We also have to be mindful as well. We are in the winter months. So demand is going to slide here a little bit in some respects. And that also could bring prices down a little bit. And then last but not least, if there's any type of global economic slowdown, that could also bring prices to the downside here. So it looks like the bears kind of have a little bit more control over oil prices in the near term rather than the bulls. And technically speaking, a further breakdown could be on the horizon. [00:06:25] Speaker 1: All right. Let's talk levels. Where are you seeing flows to the upside and downside on the S&P 500? [00:06:30] Kevin Green: Yeah, it's still another wide range for today. To the upside, 76.30. To the downside, 74.30. We still have a VIX that's sitting at 20, which is actually conducive for a lot of traders and investors out there that are looking for opportunities. So we're implying around a 1.25% move both to the upside and downside. Big key thing is getting above the 200-day moving average, getting above the volume-weighted average price if you're trading the S&P 500. That would give you confidence that we have seen a short-term bottom. Any type of reversal, obviously, it can create a little bit of volatility. And then we do have CPI at the bottom of the hour, Diane, as well. I think everybody's kind of anticipating some volatility when it comes to that report. [00:07:07] Speaker 1: Absolutely. Thank you, KG. That is Kevin Green, our senior markets correspondent with your setup for today's trading day.