Weekly Market Outlook 1/26/2025
Hide and Deepseek
Hello traders,
I hope you had a great weekend and got some time off the markets and Deepseek vs OpenAI debate.
This was a bold claim made last week with the markets ripping to new all time highs and we got two 200pt trades off those with virtually zero drawdown.
Moving on,
All eyes are on Powell and co. this week and the tech earnings.
As far as the data that Chair Powell looks at, we are squarely in the “it is so good that it is unbelievable” territory. Speaking of data, we also have PCE this weekend which is the Fed’s preferred metric for inflation.
I got quite a few messages about DeepSeek and how it probably impacts Nvidia stock price.
Honestly, it is hard to predict. On one hand the story of a few rag-tag quants creating a frontier model for a puny budget of $6m is the romantic story I want to believe but the history of China lying about the pace and scale of innovation has me a bit skeptical.
I have been personally using Deepseek since last November. It is a great model for coding and regular use(4o or Sonnet stuff) but not quite at o1/o1 Pro level according to me. However, the cost to use makes it extremely lucrative and that has caused OpenAI to lower their pricing rapidly.
How is Deepseek so cheap?
One theory being postulated is that they have been supplied with restricted Nvidia chips and some of their inference/training costs have been absorbed by the Chinese government.
Okay Algo, what does this mean. Up or Down?
I tend to not carry any bias into the week before watching the Sunday Globex open print but option flow suggests short-medium term bearishness on NVDA 0.00%↑ (Nvidia)
Realistically, all of this might be a giant nothingburger as even one month lead to ASI holds trillions of dollars of value (if ASI does not end us all that is).
So yeah, that is my analysis of the situation.
Moving on,
Weekly Levels and New Telegram Link:
Here are the weekly levels and the telegram link:
Subscribers are urged to use the tradingview indicator to plot the levels.