S&P500 crashes! Due relief rally or further pain?Nvidia delivered impressive earnings, but the stock reversed and closed nearly 3% lower, triggering heavy selling across tech and risk assets as odds for a December rate cut have collapsed to just 34%, with policy uncertainty amplified by the cancelled October NFP report. Despite a strong market and rising unemployment in September's NFP report, traders remained defensive and fuelled the declines.
Key drivers:
Nvidia beat earnings, but post-report selling intensified sector losses.
The Fed’s odds for a December rate cut have dropped to 34%, amplifying caution.
The abrupt cancellation of the October NFP means the market lacks fresh labour data, fuelling defensive positioning.
S&P 500, Nasdaq, and Bitcoin broke major supports, confirming risk-off conditions.
Right now, the S&P 500 has broken below channel support near 6,600 and failed to climb back in. If prices stay below this threshold, expect another sharp move lower targeting 6,500 and possibly 6,350. There’s potential for upside, given momentum divergence on the RSI 4-hour chart. If we see a short-term bounce and a return to the channel, a move toward 6,682 is possible, which sets up a tactical short opportunity.
Trade idea:
Entry: Midpoint of 23.6/38.2 Fibonacci (6,655–6,682 area)
Stop-loss: Above 61.8% Fib (6,775)
Take Profits: TP1 6,500 (recent low/support), TP2 6,440 (major support), TP3 trail stop to 6,170 (long-term support)
Risk-off drivers are in control. Earnings reversals, Fed uncertainty, and cancelled NFP data are fuelling this price action. Technically, it comes down to whether we see a return inside the channel for a relief bounce or a sharp continuation downward.
Watch your levels, remain nimble, and let fundamentals and technicals, not emotions, guide your trade.
Let me know your setups in the comments, and follow for more high-action technical and macro trade ideas.
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