Weekly Stock Market Update & SPY Technical Analysis
Artificial intelligence valuation concerns grew last week after the infamous “Big Short” Michael Burry revealed a position against Nvidia and Palantir. Burry famously called the 2008 crash and made billions, so anytime he screams “bubble,” the world tends to listen. However the decline in the market came from a combination of things, not just Burry’s crystal ball. The ongoing government shutdown, uncertainty around economic data and labor market, and the worry that The Fed won’t cut rates again this yea are all leaving investors more anxious than calm. Michael Burry’s position just triggered a pullback that was already in the making, and in reality, we don’t know when his position expires, and / or whether he’s just playing a very short-term pull back.
When it comes to our approach, we try to avoid listening to other analysts and so called market wizards. We’ve trusted our strategies for years and they’ve worked for us. There will always be noise from the outside, those proclaiming that they called the “top” or “bottom” of the market, but in reality, nobody really knows. However history shows that the top or bottom are rarely ever “big news,” nobody gets the kind of warning. So, going forward we’re more focused on buying stocks at better prices than they’ve seen in months, specifically focused on buying names with strong fundamentals. We'll be covering these names for our Hyper Stocks Pro members.
Coming into this week, the government shutdown remains to be the center of attention. None of the scheduled economic data will be released due to the shutdown, leaving investors and The Federal Reserve blind. United States Secretary of the Treasury Scott Bessent recently stated that the shutdown is now dragging on the U.S. economy, specifically to those who rely on federal paychecks, government contracts, and social services to stay afloat. With key agencies frozen and spending halted, ripple effects are spreading into the private sector as businesses delay hiring, pause projects, and brace for tighter consumer spending.
There is no telling when the two sides will come to agreement, but we can imagine it will be before the Thanksgiving holiday. With more than 10% of flights grounded due to lack of pay for air traffic controllers, the U.S. government will likely step it up and come to a resolution ahead of the busiest travel weeks of the year.
As for the market as a whole, we did notice that as capital was leaving large cap technology stocks, it was flowing into other sectors like healthcare, energy, consumer defensive. This doesn’t mean it will continue doing so, but they are a few sectors we’re monitoring. Other areas of the market are also beginning to see some movement, especially interest rate sensitive industries. We'll be sharing these to our Hyper Stocks Pro members.
SPY Technical Analysis:
The general trend of the market remains bullish for now and will remain so as long as SPY defends the 650.00-653.00 range (October lows). As it did in October, SPY met its 50 day moving average last Friday and saw a big reversal from its lows as buyers stepped to buy the dip. This week, we’re looking for a breakout above 680.00-681.00 for a high probability of seeing all time highs again.
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Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.
Hyper Stocks and its contributors may hold positions in some of the securities or assets mentioned above. These positions are subject to change without notice. Any opinions expressed reflect current views at the time of writing and are not guarantees of future performance. Past performance does not guarantee future results.