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U.S. stock markets wrapped up a turbulent last week with major indices finishing lower. The took the biggest hit, recording its worst weekly performance since April as investors grappled with concerns about stretched valuations and a possible AI sector bubble. The market’s unease showed up in the Fear & Greed Index, which settled at 21, squarely in “Extreme Fear” territory. Friday’s trading captured the week’s choppy character. Stocks tumbled early in the session before clawing back from their monthly lows to finish mixed. The managed to bounce from the weekly support $46,566 (modeled last week ahead of the recent price action), bounced from $6,620, (another monthly level modeled ahead of the beginning of the November), and the bounced from $24,649 (yes, another level provided last Friday). The Support and Resistance Levels provided in my homepage work as the frame for the week ahead, they provide an edge to investors and traders, highlighting price levels where the price can reverse. They are not based on diagonals or major tops/bottoms; they are modeled based on price action, volume, and essential indicators that have proven their worth for premium subscribers. Economic Data Goes Dark: The week’s negative mood stemmed largely from economic uncertainty, with the ongoing government shutdown front and center. Investors took note of a worrying drop in the University of Michigan’s , which fell to 50.3, its lowest reading since 2022, as Americans voiced concerns about the shutdown’s economic fallout. Making matters worse, the shutdown created a data blackout at a critical time. The Bureau of Labor Statistics had to postpone the official October jobs report, leaving markets to piece together information from private sources. Those private figures weren’t encouraging, with October job cuts hitting a 20-year high for the month, which only added to Wall Street’s jitters. Technical Picture Shows Cracks: The technical setup painted a complicated picture the last week of October, the Weekly Compass highlighted two conditions: The weekly shooting star in the three major indices, and the Hindenburg Omen signal triggered. These two charts for the SPX were posted in my homepage ahead of the week that just ended, one analyzed the Hindenburg Omen signals, and the other highlighted the weekly candle with a gap, suggesting high odds for a pullback. Very important as well, the price levels at the top left of the white chart, showing the projected central weekly level of $6,858 above the price, indicating a bearish condition. AI Darling Palantir Took a Hit The valuation concerns weren’t just theoretical. Palantir (NASDAQ: ) shares saw a sharp pullback last week as the market reassessed its premium valuation. Despite strong growth metrics, analysts questioned whether fundamentals could justify the stock’s elevated price-to-earnings ratio following this year’s massive rally. The selloff added pressure to the broader technology sector and other high-flying AI-related stocks, illustrating how quickly sentiment can shift when valuations stretch too far. Crypto Joins the Selloff The volatility wasn’t limited to stocks. Cryptocurrency markets had a rough week too, with Bitcoin briefly dropping below the $100,000 mark before bouncing back to around $103,486 by Friday’s close. That still left it roughly 20% off its recent peak, reflecting the broader risk-off sentiment affecting speculative assets. Pullbacks Don’t Occur in a Straight Line Down The Hindenburg Omen signal (bearish) has cumulated four occurrences already during the last two weeks, something that must be assessed carefully since there were also multiple signals in April and May that point in the opposite direction (bullish). My thesis for the medium term remains bullish. Apart from the bullish and bearish breadth signals observed during 2025, the price action is building on the thesis that pullbacks do not happen in a straight line down. Let’s study three charts suggesting a bounce. SPX - Hammer at the 50DMA: Be careful being too bearish at this point, the market has reached oversold levels along with stock participation, and after an intraday visit to $6,620 as a key monthly level, the odds for a green Monday are significant. : Reversal hammer bouncing from the confluence zone formed by the 50DMA and the volume shelf. These factors, combined with fast oscillators trying to curl in oversold zone, suggest a green start to the week. $614.7 will determine the sustainability of any eventual bounce. NVDA: There is impressive synchrony across the indices and many megacaps. Nvidia (NASDAQ: ) is signaling a potential bounce with a Hammer validated by volume, bouncing from the confluence zone formed by the 50DMA and the volume shelf.
