Introduction & Hook
- Markets weathered a wild day of tariff whiplash to close higher, with the S&P 500 finishing at 6,943 (+0.7%), Nasdaq at 17,384 (+0.9%), and the Dow at 42,740 (+0.5%), all reclaiming the critical 50-day moving average and snapping a five-week losing streak for the Nasdaq.
- The Supreme Court struck down Trump’s IEEPA tariffs only to see him immediately pivot to Section 122 with a 10% global tariff plan—yet mega-cap tech absorbed the chaos and led the market higher, signaling institutional buyers are stepping back in at these levels.
Today’s Scorecard — What Worked & What Didn’t
- Communication Services dominated with a +2.7% surge led by GOOGL +3.7% to $314.90 after reports of AI chip ecosystem initiatives challenging NVDA, while META added +1.7% to $655.66 as mega-cap growth reasserted leadership.
- Consumer Discretionary showed resilience (+1.3%) with AMZN rallying +2.6% to $210.11 on tariff relief hopes, while post-earnings momentum continued in EBAY +3.9% and GRMN +3.8%, though NKE whipsawed violently before closing flat.
- Energy and Healthcare lagged as crude oil stalled with only a +0.1% gain to $66.49 despite Iran tensions, while defensive Healthcare closed -0.3% as risk-on sentiment reduced safe-haven demand.
- Breadth deteriorated to bearish levels with only 36% of stocks above their 20-day SMA and the Bull 4% at just 123 versus Bear 4% at 166—momentum remains fragile despite today’s index strength.
Key Earnings & Economic Calendar
- RNG exploded +34.4% to $39.50 after RingCentral delivered a beat-and-raise powered by AI-driven margins and subscription growth—a standout 9M Catalyst signal with 231.9% risk-adjusted setup forming.
- DNOW collapsed -11.98% gap down to $13.01 despite reporting 87% EPS growth as Q4 results missed expectations, while IRTC dropped -4.2% to $149.35 post-earnings despite strong operational metrics.
- Tomorrow: No major economic releases scheduled, allowing markets to digest today’s tariff developments and position ahead of next week’s critical NVIDIA earnings release.
- Earnings watch: Light schedule tomorrow with focus shifting to NVDA‘s upcoming report next week, which will be crucial for validating the semiconductor recovery thesis after today’s +1.0% gain to $189.82.
Tomorrow’s Watchlist & Setups
- ADI at $355.03 — 2LYNCH continuation breakout clearing with 2.8% gain on 1.2x volume, 96.5% risk score, showing institutional accumulation in semiconductors with 6.1% ATR for swing potential above $360 resistance.
- AG at $27.55 — 9M Catalyst explosive move +11.2% on 148% risk setup as precious metals spike on tariff uncertainty; watching for consolidation near $26-27 demand zone before next leg toward 52-week highs only -2.3% away.
- GOOGL at $314.98 — Major reversal signal after 4.0% rally breaks above $310 resistance on 1.3x volume with AI chip news catalyst; looking for hold above $310 for continuation toward $330+ targets as Communication Services leads.
- AMAT at $375.38 — D9M signal with 56.4% risk score showing +1.5% gain as semiconductor equipment builds base; entry above $380 targets $395-400 if chip sector momentum sustains through NVDA earnings.
- Focus on mega-cap tech and industrial metals tomorrow — Communication Services ATR improved to -0.80 (best in weeks) while Basic Materials volatility remains elevated at 1.86, suggesting continued sector rotation opportunities.
Strategy Outlook & Scenarios
- Bullish scenario confirmed if S&P 500 holds above 6,895 (50-day MA) with follow-through above 6,950 opening path to 7,100+ as institutions chase the breakout, especially if mega-cap tech extends gains and breadth improves above 40% stocks over 20-day SMA.
- Bearish trigger at S&P 500 breakdown below 6,850 would invalidate today’s reversal and signal another leg lower, particularly if the 10% Section 122 tariffs accelerate into implementation or if weak breadth (only 36% above 20-day SMA) deteriorates further.
- Strategy signals show early rotation: 2LYNCH at 142 signals (leaders: ADI, KLAC, MPWR in chips), D9M at 133 (featuring WDC, LUV, NCLH), and 9M Catalyst explosive at just 15 (AG, AXTI, RNG leading)—momentum is concentrated but building in pockets.
- CRT (Controlled Risk Taking) is the dominant action code — today’s choppy 3-handle intraday range on tariff headlines followed by mega-cap-led recovery demands tight stops and position sizing, but the reclaim of the 50-day MA justifies selective long exposure in proven leaders.
Summary & Final Thoughts
- Tomorrow’s game plan: Trade the 50-day breakout with tight risk — focus on mega-cap tech leaders like GOOGL, META, and AMZN that showed institutional support today, while monitoring sector rotation into Communication Services and selective industrial names.
- Key risk remains tariff policy uncertainty with Trump’s Section 122 implementation timeline unclear and potential refund processing creating ongoing volatility—GDP miss (1.4% vs 3.0% expected) and sticky 3.0% PCE inflation also threaten rate cut hopes.
- Overall stance: Selectively aggressive in quality — the five-week losing streak break and 50-day MA reclaim justify increased exposure, but weak breadth (only 36% above 20-day SMA) and poor sentiment (4% reading still bearish at 123/166 bull/bear ratio) demand focus on institutional-grade setups with defined risk under $5-10 per share.