Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst
Market Rotation Rattles Traders
Traders last week were seemingly rattled by a rotation in stock markets.
Persistent uncertainty over AI prospects and the interest rate outlook buffeted U.S. stocks as the market rallied on Monday and then sold off on Thursday.
For the week, the S&P 500 managed to eke out a paltry gain of .01%, while Nasdaq suffered a loss of .05%.
The darlings of the technology and AI sectors, which have driven much of the market gains and earnings growth this year, look to be showing signs of fatigue.
Sector Performance and Profit-Taking
For the month of November thus far, technology has underperformed, while sectors like health care (+5.9%), energy (+2.6%) and materials (+2.5%) have outperformed. Information Technology (-4.5%), Consumer Discretionary (-3.7%) & Industrials (-2%) were the leading monthly losers.
After a nearly 55% rally in the Nasdaq since the April 8 lows, the technology sector may have been due for a period of consolidation or some profit-taking. This is especially true as we head toward year-end and investors think about rebalancing portfolios and positioning for 2026.
Bitcoin Drops and Volatility Picks Up
The price of Bitcoin, the most widely traded cryptocurrency, extended its recent decline, falling more than 20% below its recently achieved record high. Bitcoin was trading around $95,000 on Friday afternoon, down from the record of about $126,000 reached less than six weeks earlier.
A gauge that tracks investors’ short-term expectations of U.S. stock market volatility had a bumpy ride on Friday. The Cboe Volatility Index climbed as high as 23.0 in morning trading before slipping below 20.0 at midday. The VIX closed at 19.8, up around 4% for the week.
Support Holds — For Now
Friday appeared to be important technically speaking as several indices challenged support at their respective 50-day Simple Moving Averages. It’s not just the S&P 500 (SPX), but also the Nasdaq Composite (COMP), the Nasdaq 100 (NDX), and the PHLX Semiconductor Index (SOX). Fortunately for the bulls, all these indices finished above this indicator after trading below it earlier in Friday’s session, so it appears that technical support, at least temporarily, is holding up. This could set stocks up for a recovery next week.
Also worth pointing out is the bullish seasonality that accompanies November/December and the potential for performance chasing by fund managers, especially since stocks have pulled back recently. Then there’s Nvidia’s earnings report next Wednesday, which has the potential to reignite the “AI bull trade” or add fuel to recent concerns around high valuation and over investment.
Key Technical Levels and Outlook
The potential for stocks to move higher in the first three days of next week leading into Nvidia’s report is above average given the bullish technical set-up. However, the recently elevated VIX level near 23 could be a bearish harbinger, suggesting more downside may be needed, or Nvidia could issue disappointing results/guidance, which would likely result in a down week for stocks.
Technical support levels to closely monitor next week are near SPX 6640, KEY support at 6550, 6345 & 6210–12. Nasdaq support can be seen at 24500, 24200, KEY support near 24000 & 23000.
In any case, we at thetechtrader.com will always “Trade What We See, Not What We Think.”
Harry Boxer, The Technical Trader at www.thetechtrader.com
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