Nasdaq Gains 1% but Weak Finish Clouds Recovery Ahead of Earnings

Stocks bounced after Friday’s heavy selling into options expiration, but rising 10-year yields helped take the strength out of that recovery. The bigger issue is whether this is a lasting rebound or simply a recovery toward broken support that sellers will defend. The Nasdaq gained about 1% but finished closer to its lows, while the S&P 500 remains close to two important support boundaries.

In One Minute

The market finished higher, but the weak close makes this bounce less convincing than the headline gains suggest. Rising yields remain a source of pressure, and upcoming earnings guidance will face scrutiny. The S&P 500 needs to protect 764.04 and 760.40, while semiconductor shares still look vulnerable despite their rebound. Bitcoin is holding $80,524, but buyers need to push toward $85,000 before the recovery starts looking stronger.

The Context

We are heading into another round of earnings with the market struggling to move away from support. Good results are still expected from many companies, but any weakness in their outlooks could matter more while yields remain elevated. That leaves us watching both the earnings numbers and whether prices can recover the trend lines they have already broken.

Key Developments

The S&P 500 finished higher but below its session highs, following Friday’s test of a previous all-time high that has repeatedly supported this consolidation. An upward-sloping trend line runs through the same area, and prices remain close to both boundaries. The more often we keep testing that floor without moving decisively higher, the greater the concern that support eventually gives way.

The immediate levels are 764.04 and 760.40, with daily closes below those areas opening the way toward 748.42. That lower reference sits near the top of the rising parallel channel that began in October 2022. On the monthly chart, we are still trying to hold a breakout above that channel, so losing this support would put that breakout under pressure.

The Nasdaq gained about 1%, and we did not get an immediate follow-through decline after Friday’s selling. That is encouraging, but the bounce stopped at a declining trend line instead of closing back above it. The more important damage is the confirmed break below the rising trend line connecting the March lows.

That rising line had several tests before Friday confirmed the break, and it can now become resistance if prices recover toward it. Even with good technology earnings, I would watch for a rally to slow near 27,128 points. We were previously focused on 28,000 points, but the breakdown has changed the immediate setup to a recovery toward broken support, followed by the possibility of another rejection.

The 10-year yield started near 5.064% and recovered toward 5.142%, helping put pressure on the stock market’s bounce. If yields ease tomorrow, technology shares could recover, although that move could remain an intraday bounce. If yields keep rising while stocks recover, investors are more likely to take profits.

Support is 5.021%, the previous 2023 pivot, while resistance is 5.289%. I expect we could spend several weeks consolidating between those boundaries before another move higher. A breakout above the range would bring the upper parallel channel target of 5.77% into focus, with unresolved Middle East conflict and another possible rate increase supporting that outlook.

The probability of a December rate increase is 82%, while the chance of rates staying unchanged in October is roughly 70% to 80%. Recent PPI and CPI readings showed hot inflation, which has also raised the possibility of an October increase. My expectation remains that there is one more increase before year-end, with unchanged rates in October and an increase in December still the more likely path.

Gold fell 0.65% and remains inside a bearish consolidation, meaning the pause still carries the risk of another decline. The next support is a move slightly below $4,000, followed by $3,900 and $3,800. We could get pauses and temporary rebounds around $4,000 without changing that broader setup.

My preferred physical gold buying area is $3,639 down to $3,500. That combines an upward-sloping trend line with the previous all-time high pivot at $3,500. I would be more interested in that lower zone if the bear flag continues pushing prices down.

Silver moved higher while gold declined, and Thursday’s bounce gives buyers something constructive to work with. What I want now is sideways consolidation or a gradual lift, rather than an immediate return to the lows. If silver can maintain that footing, resistance sits at $59, the midpoint of its parallel channel.

The larger head and shoulders pattern points toward $53 down to $50, where I would consider an initial physical silver purchase. The broader rising channel extends toward $31, so buying near $50 would not mean assuming the decline is finished. This is a much longer holding approach, with room to add if silver reaches $30, rather than a trade that depends on an immediate bounce.

Oil pushed higher and then pulled back, continuing to struggle around resistance tied to the September 18 pivot. Prices have moved above and below that boundary over the last three sessions without establishing a clear advance. I expect this area could stall the move for a few days.

Above that, $103 is the more important resistance area because the midpoint of the parallel channel meets another trend line there. That line connects the March high when the war began, the next major pivot, and the September 15 pivot. If oil reaches that area over the next several days or week, I would expect the advance to slow before another attempt higher.

The larger setup remains an inverse head and shoulders pattern with a declining neckline and a measured target of $116. I expect Middle East conflict could escalate after the midterms, potentially within a few weeks, as early voting began last week and mail-in ballots are already being cast. That remains an expectation, but the chart continues to point toward $116 even though the timing is uncertain.

Natural gas declined, but it is still holding its breakout above a declining trend line. We have not yet had a complete return to that breakout area, and sometimes prices never make that full return. The June pivot highs offer an earlier area of interest after the strong breakout.

I expect a potential bounce near $3.21, with the setup favoring another move toward the lower boundary of the broader parallel channel. Natural gas can move sharply through levels, though, so I would keep the position light and allow for a deeper test of $3.07. The upside target remains $3.89.

SMH remains my leading indicator of investors’ willingness to take risk, and its decline has been clear since October 6. It gained 1.61%, but finished near the session lows, which weakens the message from that positive headline. We can recover from that close, but it still suggests more selling could arrive over the coming days.

The first support to watch is $528.86 at the lower parallel channel boundary. If that breaks, a recovery back toward it could meet selling pressure. Below that, the more significant area is around $512, with the precise Fibonacci support at $512.36.

At $512.36, the 50% retracement of the move from this year’s low to its high lines up with the 200-period simple moving average and a declining trend line. Several support measures meeting there make it an important potential bounce area. My preferred setup would be a sharp decline directly into that zone, followed by a rebound where I could take profits, with the speed of the selloff helping determine the quality of the opportunity.

Amazon gained nearly 5% and closed in the upper half of the rising parallel channel that has contained prices since 2023. This is the sixth attempt to regain that upper area after falling beneath it, showing buyers repeatedly challenging the boundary. Tomorrow, I want to see a daily close above today’s candle to give that breakout more staying power.

Support is $260.62, which is the immediate level to keep in view. With the holidays approaching, investors could be rotating toward retail opportunities. The price confirmation still matters most: Amazon needs to build on this session rather than give the move back.

SE dropped 5.65%, with two substantial daily declines bringing prices back to a significant long-term rising trend line. Its earlier channel breakdown is a useful reminder that a return to broken support can take months: prices paused for four weeks, broke down in March, and did not recover to the channel until August. That recovery then met the January pivot high and the former channel boundary, producing a clear rejection.

The daily chart is oversold and looks due for a technical bounce that could reach $100. The weekly chart is not as stretched, and this rising support line was tested fairly recently, which keeps me cautious. An earlier oversold reading of 25.74 occurred with prices not far from current levels, creating some divergence without removing the possibility of another break lower.

The next important Fibonacci support is $69.65. My potential approach would be to begin near the pivot lows, add near $69.65, and look for a recovery toward the rising trend line if it breaks. That would be a rebound toward what could become the second broken rising trend line on this chart, rather than an assumption that the larger decline is over.

GE reports earnings tomorrow before the market opens, and the chart shows another breakdown followed by a return toward broken support. The rising trend line connects the April 2025 and April 2026 pivots, with recovery attempts reaching it on October 2 and October 16. A bounce of about 7% failed to gain more ground as sellers pushed prices lower again heading into earnings.

For buyers, getting above that line at $322.52 is the key to restoring a more bullish setup. Depending on the reaction after earnings, that recovery could also develop into an inverse head and shoulders pattern. On the downside, the lower parallel channel boundary is $285.87, with a gap fill nearby at $285.58.

If earnings bring selling into the $281 to $285 area, I would be interested in a potential purchase near the bottom of the channel. The intended rebound would be toward $296. That is a conditional support trade, while the stronger recovery still depends on reclaiming $322.52.

SpaceX reports earnings tomorrow after the close, following a failed breakout from an inverse head and shoulders pattern. Prices moved back below that breakout, canceling the pattern. The immediate level buyers need to recover is $149.34, the low from the first trading day on June 12.

Daily closes above $149.34 would open the way toward the broken rising trend line near $162.81, where I would expect resistance. Thursday’s bounce began directly at the 50% Fibonacci retracement between the relevant low and recent high, and the following two sessions showed supportive wicks. Today, though, prices moved above $149.34 several times and could not hold it by the close.

After hours, prices moved to roughly $0.50 to $0.60 below that level. A close above $149.34 before earnings would be constructive, but the earnings reaction can still go either way. I expect a near-term bounce and an eventual return toward the broken trend line, although that could happen tomorrow, later this week, or next month.

Bitcoin is still sitting inside a bearish consolidation, with little change in the immediate setup. The positive is that support at $80,524 continues to hold, so the chart has not suffered further damage at that boundary. Buyers need to reach $85,000 soon before we can start talking about stronger upward momentum.

For now, the bear flag remains in place, which means this pause could still lead to another decline. Holding support is useful, but it is not the same as showing renewed buying strength. I want to see Bitcoin move away from that defensive position and start recovering toward $85,000.

Why It Matters

The same pattern keeps appearing across these charts: prices break a trend line, recover toward it, and then face another test from sellers. Sometimes that return takes days, and sometimes, as SE showed, it takes months. That is why I am separating a possible rebound from a confirmed recovery and paying attention to daily closes.

Yields add another layer because a rising 10-year yield can encourage profit-taking while stocks attempt to bounce. Earnings can help, but weak guidance could expose indexes already sitting close to support. In that environment, the strength of the close matters more than an encouraging intraday gain.

Key Details

Market Outlook: Opportunities and Risks

The opportunities depend on prices confirming the setups already on the chart. Amazon can strengthen its breakout with another higher close, while SMH offers a potential rebound near its stacked support, and SE could recover from its daily oversold condition. GE has a conditional buying area below, SpaceX has a potential return toward broken resistance, and natural gas still carries its $3.89 target.

Gold and silver offer lower physical buying zones, while oil retains its $116 measured target despite nearby resistance. Those are different setups with different time horizons, so I would not treat a temporary bounce and a long-term accumulation plan as the same trade. Each still depends on the price conditions already laid out.

The main risk is that this stock market bounce fades before broken support is recovered. Higher yields, disappointing guidance, or daily closes below the S&P 500’s nearby support could bring another leg lower. The Nasdaq and SMH have not repaired their weakness, and Bitcoin remains inside its bear flag despite holding support.

What to Watch Next

Tomorrow, the immediate earnings catalysts are GE before the open and SpaceX after the close. I also want to see whether Amazon closes above today’s candle, whether the S&P 500 protects 764.04 and 760.40, and whether the Nasdaq can move through the resistance that stopped this bounce. The direction of the 10-year yield will help determine whether technology gets another lift or faces more profit-taking.

Beyond that, watch oil’s approach toward $103, natural gas near $3.21, and the semiconductor support areas at $528.86 and $512.36. Gold’s $4,000 area and silver’s ability to hold sideways remain important tests of their immediate structures. Bitcoin needs to keep holding $80,524 while making progress toward $85,000.

Bottom Line

The rebound is still vulnerable because rising yields are meeting stock indexes that have not moved convincingly away from support. Earnings may provide another push, but the closes need to confirm it. Let prices reach the levels, then look for buyers to prove they can hold them.