Falling Yields Lift Stocks as CPI and NVIDIA Test the Rally

Stocks are moving higher today, helped by a sharp drop in the U.S. 10 Year Treasury Yield (US10Y) and weaker U.S. oil prices ahead of CPI at 8:30 AM tomorrow. The bigger issue is whether lower yields can keep supporting equities as the market moves into CPI, Jackson Hole on Friday, and NVIDIA earnings after hours tomorrow.

The S&P 500 Index (SPX) gained 0.32%, but I would not read too much into that move yet. Price has spent four trading days consolidating after falling from the recent highs around 777, and that consolidation is happening directly above the previous all-time high. That level should act as support, but instead of bouncing strongly, the market is sitting on it. If price keeps slowly pressing into that area, I would be prepared for a temporary break underneath before buyers respond.

The Invesco QQQ Trust (QQQ) gained 0.62% and is trying to find its footing. The structure is not as bearish as the S&P 500 consolidation, but the downward trajectory is still there. The important support level is $695.25.

The VanEck Semiconductor ETF (SMH) was stronger, gaining 1.65%, but this is where I want confirmation. Resistance is around $562.35, followed by $568.61. If semiconductors can close above both by Thursday, that would be an important sign that the broader technology market may be ready to move higher.

That brings us directly to NVIDIA Corporation (NVDA). NVIDIA broke out of bearish consolidation on August 5, but that entire breakout has now been retraced. Earnings after hours tomorrow could push this either way. On the downside, there is a gap fill area between $200 and $225, along with support near the bottom of the rising parallel channel. If NVIDIA falls below $200, that would create trouble for the broader artificial intelligence and data center trade and make an SMH breakout much harder.

The U.S. 10 Year Treasury Yield fell sharply today, which helped stocks, but the larger structure is still consolidation. Since July 23, yields have essentially moved back and forth, and that leaves open a potential move toward 4.809%. With inflation data coming and Jackson Hole on Friday, yields remain one of the most important drivers of equity volatility.

In commodities, Gold Futures (GC) remain constructive, but momentum is slowing. Gold broke above $4,333 and continued higher, but the last four sessions have started to stall. If price pulls back, support is $4,575.31. If it keeps moving higher, resistance is $4,770.

Silver Futures (SI) briefly pierced $67.99 and needs to create some separation from support. I would rather see silver move toward $70 and consolidate there, which would give it a better base for a move toward $72.07. The longer price sits directly on support, the greater the risk that support eventually weakens.

West Texas Intermediate Crude Oil Futures (CL) pulled back into its breakout area around $80.39. If that retest holds, the next move being watched is a rebound toward $83.49. Henry Hub Natural Gas Futures (NG) gained 1.13%, with $2.90 as resistance. A break above that opens the door toward $3.27.

Bitcoin (BTC) has made a strong move, but it is starting to look tired. After accelerating toward the $76,000 measured move target, Bitcoin has spent four sessions trading near the upper portion of that move. Buyers are still there, but sellers are clearly showing up as well.

For Bitcoin bulls, $76,116 is the important level. Holding above it would allow this consolidation to develop into a potential bull flag. Resistance sits just above $80,000, and repeated tests can weaken that barrier. If Bitcoin can hold $76,116 and eventually clear the resistance above $80,000, the next major level is $88,000.

Robinhood Markets, Inc. (HOOD) gained 8.17%, but it is approaching resistance at $113.44 and $115.34. Clearing those areas would strengthen the larger inverse head and shoulders setup, which carries a potential move toward the $180 area. Coinbase Global, Inc. (COIN) is consolidating around $184 to $185 after bouncing from its breakout area. If that consolidation holds, the next major resistance is around $213.

DICK'S Sporting Goods, Inc. (DKS) is the opposite story after falling roughly 30% following earnings. The stock could bounce toward $134.03, but continued selling could eventually bring $105.57 into play. Weekly RSI is 24.67 and daily RSI is 15.38, so it is extremely stretched, but that does not make it an immediate buy.

Right now, most of these markets are sitting at important decision points. I want to see the S&P 500 prove support can hold, semiconductors clear resistance, NVIDIA confirm direction after earnings, and Bitcoin hold $76,116 before becoming more aggressive. The opportunity is there, but price still needs to prove the move.