Hello traders,
Looking back at last week’s market outlook and we were able to navigate the markets effectively.
Key takeaways:
XLV 0.00%↑ went up 240bps this week.
XLU 0.00%↑ went up 150bps this week.
$VX spiked to 18 handle this week.
$BTC range compression gave great premia harvesting opportunity.
As far as intra-day trading goes, our core idea was to short 22290-22300 area.
It was a large continuation trade which spanned over a couple days.
And on Friday we saw more downside with NQ closing near lows at 21660 or so.
(As of Sunday 7:30pm ET NQ is up 100pts or so from Friday close)
This week is set to be a critical one for financial markets, with key macroeconomic data, Federal Reserve policy expectations, and corporate earnings shaping investor sentiment.
Macroeconomic Overview
Key Economic Data Releases:
Tuesday, February 25: Consumer Confidence Index and S&P/Case-Shiller Home Price Index.
Thursday, February 27: Second estimate of Q4 GDP, durable goods orders, and pending home sales.
Friday, February 28: Personal Income & Spending data, including the Core PCE Price Index (the Fed’s preferred inflation gauge).
Federal Reserve Policy:
The Federal Reserve remains cautious about rate cuts despite slowing economic growth. Markets are pricing in a potential rate cut in September 2025 as inflation remains sticky at 3.3% year-over-year.
Fed Chair Jerome Powell’s recent remarks emphasized the central bank’s commitment to achieving its 2% inflation target.
Bond Yields and Auctions:
U.S. Treasury yields have fallen recently, with the 10-year yield at 4.42%. This reflects growing concerns about an economic slowdown.
This week’s Treasury auctions for short-term bills (Monday) and the 2-year note (Tuesday) will provide insights into investor demand amid declining yields.
Geopolitical Risks:
Trade tensions persist, with potential new tariffs on Canada and Mexico adding uncertainty to global supply chains.
Index Futures: E-mini S&P 500 (ES) and Nasdaq 100 (NQ)
S&P 500 Futures (ES):
The S&P 500 futures ended last week lower as weak PMI data raised concerns about slowing economic activity.
Key catalysts this week include GDP revisions and durable goods orders on Thursday.
Key levels at the end of the post
Nasdaq 100 Futures (NQ):
Nasdaq futures remain highly sensitive to interest rate expectations due to their concentration of growth stocks.
NVIDIA’s earnings report on Wednesday could drive significant volatility in tech-heavy indices.
Key levels at the end of the post
Bitcoin
Market Sentiment:
Bitcoin is consolidating near $95,000 after a volatile week that saw prices range between $91,200 and $102,500.
The cryptocurrency remains highly sensitive to macroeconomic conditions, particularly inflation data and Federal Reserve policy.
Technical Analysis:
Support: $92,553
Resistance: $102,680
A breakout above $95,000 could trigger renewed bullish momentum.
Long-Term Outlook:
Analysts remain optimistic about Bitcoin’s long-term prospects, projecting it could reach $200,000 by year-end if macro conditions align favorably.
Crude Oil
Market Dynamics:
Crude oil prices are trading within a tight range of $70–$73 per barrel amid mixed demand signals.
Geopolitical risks in the Middle East and ongoing U.S.-China trade tensions continue to influence price movements.
Economic Data Impact:
Thursday’s durable goods orders and GDP data will provide clues about U.S. economic activity and its implications for oil demand.
Outlook:
Analysts expect crude oil prices to remain volatile but supported by OPEC+ production cuts and potential supply disruptions.
The Elephant in the room: NVIDIA Corporation (NVDA)
NVIDIA Corporation is scheduled to release its fiscal Q4 earnings on Wednesday, February 26, after market close. The semiconductor giant has been under pressure recently, with shares down approximately 0.5% year-to-date as of February 21, closing at $134.68.
Earnings Preview
Analysts expect NVIDIA to report revenue of $38.1 billion (+72.5% YoY) and EPS of $0.80 (+61.8% YoY).
The company’s Data Center segment is projected to generate $34 billion in revenue (+50% YoY), driven by strong demand for AI GPUs from cloud service providers.
Key Catalysts
AI Growth Momentum:
NVIDIA continues to dominate the AI computing space with its cutting-edge GPUs that power generative AI applications.
Recent partnerships with major cloud providers have further strengthened its market position.
Earnings History:
NVIDIA has consistently outperformed analyst expectations in recent quarters, with an average earnings surprise of over 10%.
Market Sentiment:
Despite being down year-to-date, NVIDIA shares have shown resilience after a sharp rally in late 2024 (+171% last year). Analysts maintain a strong consensus “Buy” rating with a mean price target suggesting ~25% upside from current levels.
Risks
High valuation multiples leave little room for error if earnings or guidance disappoint.
Slowing revisions in Data Center revenue estimates could temper investor enthusiasm.
Support: $130
Resistance: $150
A strong earnings beat could propel shares toward new all-time highs.
Conclusion
This week promises heightened volatility across asset classes as investors digest critical economic data and corporate earnings:
For index futures (ES, NQ), focus on Thursday’s GDP revision and Friday’s Core PCE data as key drivers.
Bitcoin traders should monitor inflation data for clues on Federal Reserve policy shifts that could influence risk-on sentiment.
Crude oil prices will likely respond to geopolitical developments and U.S.-China trade news.
NVIDIA stands out as the stock to watch this week ahead of its Q4 earnings report on Wednesday. While shares are down slightly year-to-date, strong growth prospects driven by AI adoption position the company for another quarter of impressive results—potentially providing a bullish catalyst for tech stocks broadly.
Investors should remain vigilant amid mixed macroeconomic signals but consider selective opportunities like NVIDIA for potential upside in an otherwise uncertain environment.
For ES, if the downside momentum continues we can see 5890s this week on any non goldilocks economic readings or a less than stellar earnings report from NVDA 0.00%↑ (Nvidia) can also spoil the party for bulls.
Weekly Levels:
Subscribers are urged to use the tradingview indicator to plot the levels.