The S&P 500 broke its range to the downside after spending much of the week treading water around long-term support. Monday opened with a gap down driven by Iran war concerns, though the dip was quickly bought and the index finished the day near Friday’s close.
Tuesday marked the first test of long-term support, which was tested again on Thursday and managed to hold — albeit narrowly. Selling pressure ultimately took control on Friday, leading to the first decisive break of the range.
Price is now finding support around the 150-day moving average, while trading below declining 10, 21, and 50-day moving averages, and below a still-rising 100-day moving average.
The Nasdaq (QQQ) managed to hold long-term support, though the outlook remains fragile. Similar to the S&P 500, QQQ spent the week repeatedly testing this level. While support held, price remains below declining 10, 21, and 50-day moving averages, as well as a flat 100-day moving average, and has now slipped below the 150-day moving average.
The Russell 2000 (IWM) spent most of the week attempting to hold the 50-day moving average, but ultimately closed the week below the 100-day following Friday’s sharp sell-off.
Monday marked the first dip below the 50-day since November, which was reclaimed by the close. However, that strength failed to persist, as price spent the remainder of the week struggling to regain the 50-day before breaking lower into Friday’s decline.
Themes in play
Gold/Silver
Both remain within constructive bases, still building higher lows. Golds price is currently holding 10- and 21-day moving averages while Silver sits just below the 50-day. Overall they’re both still holding up well, given the massive rallies from both in recent months, its unsurprising that they’re now forming longer term bases.
Lithium
Managed to hold the 10-day moving average on Monday before gapping down on Tuesday below the 50-day, where it was unable to reclaim support.
Blockchain
Attempted to gap up out of consolidation on Wednesday but faded into the end of the week, ultimately finishing near where it began. Price currently sits below all major moving averages.
Semiconductors
Experienced a steady sell-off throughout the week, losing the 10, 21, and 50-day moving averages, with the shorter-term averages now sloping downward. Price currently sits just above the 100-day moving average.
If the broader market stages a bounce, there may be opportunities for short-term trades in leading names, though sustained upside moves appear unlikely under current conditions.
Aerospace & defence
Held up relatively well compared to most sectors. ITA gapped higher and closed positive on Monday but gradually pulled back through the remainder of the week, finishing just below the 10-day moving average.
Relative strength remains notable here, and if the market stabilises, this sector could present constructive setups.
Rare earth metals
Attempted to push higher on Monday following the strong breakout the previous week but sold off during the remainder of the week, finishing just above its breakout level.
Despite the pullback, it has held up relatively well compared to the broader market and may present opportunities if conditions improve.
Nuclear/Uranium
Attempted to break out of consolidation on Monday but faced selling pressure throughout the rest of the week. Price now sits below the 10, 21, 50, and 100-day moving averages.
Oil
Oil prices have gone somewhat parabolic amid heightened geopolitical uncertainty. Moves of this magnitude can be difficult to sustain, even in the context of geopolitical conflict. As such, I’m not looking to chase the move here, but rather watching for a potential pullback before reassessing.
Stocks displaying strength
As broader market weakness develops, it can be useful to track stocks showing resilience in unfavourable conditions. Early leaders in new bull cycles often emerge from stocks that resisted broader market selling pressure.
This section is not intended as a recommendation to buy these names, but rather to identify stocks worth monitoring as the market cycle evolves.
FSLY
Fastly surged roughly 70% on February 12th, printing the highest volume in its history on a day when the broader market fell 1.8%. The move was driven by improved earnings and multiple price target upgrades.
Since then, the stock has held those gains and advanced an additional ~25%, signalling strong institutional interest.
AAOI
On February 27th, AAOI surged roughly 55% on the highest volume seen in over 2.5 years. The move was followed by an additional 20%+ gain the next day before the stock entered a sideways consolidation.
The ability to post such a large advance and hold the majority of those gains despite challenging market conditions suggests strong institutional interest in the name.
Key Observations & Focus for the week
Although sellers appear to be gradually gaining control, buyers have still stepped in repeatedly to support price — evident in the multiple tests of support before the eventual breakdown.
Furthermore, we have yet to see a decisive follow-through day in either direction. Recent price action has largely consisted of overlapping candles with long wicks, suggesting a lack of conviction from both buyers and sellers.
The coming week should provide more clarity regarding whether sellers are firmly in control or whether this dip lower will attract renewed buying interest. It will be vital to track how this gap down plays out, how long we spend around this level and whether price is able to recliam long term support or if support acts as resistence. Given the resilience displayed, I’m slightly favouring a potential bounce this week, and will be closely watching how this bounce reacts against support levels (if we do end up getting a bounce.) That being said, further follow through selling remains a possibility, and given the current global uncertainty, I’m not ruling this out.
For now, I am primarily watching for short-term opportunities that could emerge if the market stages a bounce. As it stands, I would like to see more conviction in a move downwards before I will further assess short opportunities. the areas I’m most interested in are:
- ITA / REMX – monitoring for continued relative strength
- SMH – potential oversold bounce setups in leading semiconductor names
Overall, the market environment remains difficult, with mixed signals and limited conviction on either side. It’s important to be patient and selective in trades and size appropriately until we have more market certainty.