•   The market is stuck in a classic downtrend cycle. This means we see rapid, elevator-style sells followed by aggressive short squeezes.

•   This pattern played out perfectly. We dropped to key support at 6593, saw a "Failed Breakdown," and squeezed right back to resistance at 6701.

•   The bulls have reclaimed some ground, but the fight isn't over. This bounce needs to prove it has staying power.

•   Nvidia's report after the close is the main event. It will likely decide whether we continue the squeeze or start the next leg down.

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NVDA Earnings on Deck  

The most anticipated earnings report of the season lands after the bell and will be a major market catalyst.

The Downtrend Pattern  

Notice the rhythm: sharp sell-offs create panic, then powerful squeezes punish shorts. Knowing this cycle is your edge.

Key Level Reclamation  

Bulls successfully pushed price back above the 6638-42 breakdown shelf, a critical first step for any potential recovery.

We are in a choppy downtrend. Do not be fooled by the string of red days. The actual behavior is not a straight line down. Instead, the market is operating with two distinct personalities. The first is the "elevator down" sell, a fast and brutal drop that breaks key levels. The second is the "face-ripping squeeze," a violent rally that traps sellers who got too aggressive. The market has been cycling between these two behaviors repeatedly, creating a challenging but predictable environment for those who recognize the pattern. Yesterday's squeeze after hitting our 6593 support was a textbook example.

•    Failed Breakdown: This was the star of the show recently. Price broke below a key support level like 6605-10, failed to find sellers, and then quickly reclaimed it. This traps shorts and fuels a powerful squeeze. We saw this play out multiple times, leading to the rally to 6701.

•   Breakdown Short: This is the setup that initiates the "elevator down" moves. When price loses a key support shelf and fails to reclaim it quickly, it signals sellers are in firm control. This was the setup that took us down to the 6605-10 area in the first place.

The structure is a battle between recent sellers and opportunistic buyers. The key is understanding the levels where control shifts.

•   Key Support Zone: The 6593 to 6610 area proved to be major support. As long as we hold above this zone, bulls have a fighting chance. A break below would signal the downtrend is resuming with force.

•   Reclaimed Resistance (Now Support): Bulls did the hard work of getting back above 6638-42 and testing up to 6701. These levels are the new battlefield. Holding above them is critical for any further upside momentum.

•   The Big Test: The next major resistance area sits above the recent highs. A convincing break and hold there would be needed to suggest this is more than just another bear market rally.

There is no high-conviction trade before the Nvidia earnings report. The risk of a volatile, headline-driven move is simply too high. The smart plan is to wait for the market's reaction.

Watch how price reacts around the 6701 level after the report. If we see a strong acceptance above it, the squeeze may have more room to run. If we see a swift rejection and a move back below the 6638-42 shelf, it would suggest the sellers are re-engaging. Patience is the plan. Let the post-earnings dust settle, see which levels hold, and then execute based on the market's clear decision.

•   Nvidia Earnings: What to Watch as AI Chip Demand Powers Growth (Bloomberg, Nov 19, 2025)

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Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before making investment decisions.