NVDA earnings and AAPL trend are key to watch over the next 2 weeks

Equity markets remain range-bound over the last four months as part of underlying intermediate-term uptrends.   While S&P in equal-weighted terms is far more bullish, the decline in Software and “Mag 7” has served as a headwind to both SPX and QQQ, immediately joining suit at new highs. Underlying volatility across Equities has picked up measurably at a time when Defensive positioning has grown stronger in recent weeks, and this has caused investor sentiment to grow more pessimistic from levels that previously had become more bullish.  The good news is that broader market breadth and Equal-weighted SPX have not broken down similarly to this time last year, nor in late 2021, which both preceded market selloffs.  Thus, while Value remains preferred over Growth, and momentum is out of favor, there still look to be plenty of sectors that are working well. Overall, my bias is that early week Equity weakness likely stabilizes by Wednesday, and begins to turn higher in a rally between now and early March. Upside should be capped near 7150-7200, and I feel like it’s difficult having much conviction in US Equities compared to much of the world, barring some immediate stabilization and strength out of Technology.

The late-day bounce off intra-day lows helps to give some confidence that a trading low is in the process of being formed, which could carry indices higher into late next week.

In the bigger picture, nothing has materially changed, which would alter the view of upside rallies likely proving limited to 3% higher before some type of selloff gets underway in the month of March.  Much of this has to do with the degree of Technology and Financials weakness lately, and given the breakdown in “Mag 7” ETF by Roundhill ($MAGS), this likely could cause a serious headwind barring some blowout earnings next week by $NVDA.

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