In the video, Katie Stockton discusses the current stock market dynamics, focusing on the S&P 500’s recent trading patterns and the importance of monitoring gaps left by the market, which could indicate potential pullbacks. She highlights NVIDIA’s strong performance and resistance testing, suggesting that a confirmed breakout above 141 could lead to a bullish trend, with a conservative price target of around 157.
In the video, Katie Stockton from Fairlead discusses the current state of the stock market, particularly focusing on the S&P 500 and the implications of recent trading patterns. She highlights the importance of monitoring gaps left by the market after significant movements, specifically referencing a positive reaction from the market last Wednesday. Stockton emphasizes that the sustainability of the recent rally depends on whether the market can hold these gaps, as a pullback into them could indicate a setback.
The conversation then shifts to the VIX chart, where Stockton explains the established trading range for volatility, which is bounded by support around 15 and resistance near 22 or 23. She notes that the market’s ability to break decisively below the 15 level suggests a continuation of upward movement in the market, leading to a lower volatility cycle. With the VIX currently in an oversold condition, she anticipates a period of consolidation, which could translate to a pullback in the S&P 500.
Stockton also discusses NVIDIA, a prominent stock in the market, which has been a focal point for investors. She points out that NVIDIA is currently testing resistance levels, having cleared the 141 mark decisively with a notable 9% rally last week. This movement sets the stage for a potential breakout, pending confirmation in the upcoming week. If NVIDIA closes at or above this level on Friday, it would confirm the breakout and indicate a bullish development.
The price objective from this breakout is estimated to be around 157, which Stockton considers a conservative medium-term target. However, she stresses the importance of waiting for confirmation due to the presence of a gap that needs to be monitored and a short-term counter-trend signal indicated by margin indicators. This cautious approach reflects the complexities of trading in a volatile market.
Overall, the video provides insights into the technical analysis of the S&P 500, the VIX, and NVIDIA, highlighting the significance of gaps, trading ranges, and resistance levels. Stockton’s analysis underscores the need for careful observation of market indicators to navigate potential pullbacks and confirm bullish trends in the current trading environment.