Ceasefire Extension… Markets aren’t buying it
The S&P fell an additional 2.23% from the prior Friday’s low this past week, marking the fifth down week in a row.
As seen in the weekly timeframe chart below, there’s just an additional 3.79% to go before we start running into the pre tariff tantrum highs for the monthly higher low thesis at 610.
Markets very well could capitulate this week, if we see the proper combination of gap and go dynamics early in the week, paired with a heavy increase in volume. More on this later.
Yes… Oil Still Runs The Show
The market got a pause on strikes against Iranian energy infrastructure early Monday morning… but it did not get a complete resolution.
That key distinction mattered all week as crude stayed firm. Every “maybe this cools off” headline was met with a pretty simple response: prove it.
The market is still treating energy as the line in the sand. As long as oil stays elevated, inflation risk stays alive, Fed-cut optimism stays capped, and stocks have a harder time finding their footing.
So sure the headlines may have bought a little more time… but the markets not buying it. Crude would need to drop below the 84.3 ceasefire optimism price for meaningful change.
Bottom line going forward, is the decoupling of optimistic headlines with price improvement.
Meta’s ‘Big Tobacco Moment’
Meta ($META) suffered two jury verdicts in one week. The damages were $375 million in New Mexico and $6 million in Los Angeles.
Although these amounts are rounding errors for a company sitting on $70 billion in cash. That’s not the point.
The story is what the juries found. Not just that Meta’s platforms harmed young users but that Meta knew, and continued anyway.
“Knew and continued” is the same legal standard that turned tobacco lawsuits into a $246 billion settlement story in 1998.
So while the dollar damages this week are trivial, the precedent those verdicts set is not. Every similar lawsuit in the queue just got handed a template. Every future jury just got handed a prior finding.
Meta is off 34% from the all time high and while the move lower may be pricing the spending and the layoffs, it probably isn’t fully pricing what may come next in the courtroom.
Google’s ($GOOGL) YouTube platform was also part of the Los Angeles suit and may suffer similar fate.
AI Is Getting Even More Specific
Arm ($ARM) unveiled its AGI CPU, and said it expects the chip to generate about $15 billion in annual revenue within five years. This was a clear step beyond its old licensing only model.
Ironically, Meta is the lead partner, with Reuters also naming OpenAI, Cloudflare, SAP, and SK Telecom as customers. Investors are still rewarding companies that can tell a believable AI infrastructure monetization story, especially if its 0 to 100 at the drop of a headline.
The stock was up 25% on the initial announcement, but has since faded over 10%. The key here is to determine if price can hold over the base and 200 SMA.
That is where Marvell ($MRVL) fits too. Earlier this month on earnings, Marvell projected nearly $15 billion of fiscal 2028 revenue, driven by demand for custom chips and interconnect products inside AI data centers.
Note the relative strength to the broad market in the below snapshot.
Neither of these two names are NVDA replacements and the numbers aren’t as unicorn-esque. What they might be however, is a play that’s not already priced to perfection.
Fundamental Forces
Worth noting before getting into the charts is that the macro data didn’t do the buyers any favors.
Flash PMI showed US business activity slipping to an 11 month low, with services slowing, private sector employment contracted, and price pressure already picking up.
Fed speakers didn’t sound too confident either with Barkin noting that the outlook is back to “foggy,” and Jefferson mentioning that higher energy prices could weigh on both inflation and consumer spending. Paulson said risks to growth and inflation have both risen.
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Broad Market Analysis
SPY – Monthly
Still two days to go until the close, but may as well start prepping for a solid red body, close near the low of the range. Lower high and lower low on the bar to bar count.
Still in a monthly uptrend with higher low potential over the 615-610 area. Same concept as the April ’25 tariff tantrum lows. Prior resistance acts as new support. Fib 38.2, 20 SMA in the same zone.
Remember, the two major bears everyone remembers only materialized after flipping into a monthly downtrend. It may happen, but it likely doesn’t happen in a single monthly. We’ll deal with that when and if it happens.
SPY – Weekly
Back to back solid red bodies. Lower high, lower low, close outside and beneath the prior week’s range. 50 SMA lost. VWAP stack lost. The October and November 2025 double bottom lows are now overhead supply at 653.
Any rally is counter trend until proven otherwise seeking a lower high. The weekly range lows at 675 are still a valid lower high zone.
Washing out on a big single day selloff with volume into the 610 area would potentially yield a nice starting location to watch for the MoHL (monthly higher low) thesis.
If that happens and then price sets a weekly higher low, that might be the start of a more constructive low. We’ll take it week by week… bar by bar. We’ve got to see it to believe it.
SPY – Daily
Sitting on the lowest low of the downtrend after breaking the what could have been double bottom from Friday of two weeks ago and Thursday. Lower highs available just like the weekly. Gap close from Friday would be the best location at 644.75. Beyond that the weekly lows to retest are 653.
On a continued gap and go situation early in the week, this is where we have the highest odds of capitulation. We’ll need to see down 3%+ on higher volume than OpEx and slowdown from sellers near the 610 MoHL level.
Note that all of this is still happening below the daily 200 SMA…
SPY – Hourly
On Monday morning, markets set a high reacting to the announcement of a 5 day ceasefire and that peace negotiations would be taking place. Early in the week, price attempted to build a right shoulder higher low out… all of that failed, even with the additional 5 day extension announced Thursday afternoon.
Why does it matter? Markets aren’t responding to the tweet playbook any more. The damage has been done.
So now we look for a structured downtrend to continue on clean lower highs resulting from counter trend rallies, or we look for the capitulation low attempt on high volume and a falling volatility index.
Market Internals – NYSE
Heavy volume outflows Friday. Advance-decline line deep in the trend-lower zone. Cumulative builds on both Thursday and Friday reached below 5,000.
S&P closed at roughly 388 declining / 110 advancing. Capitulation reads closer to 450 / 50 or worse. NASDAQ closed at 85 / 15 which is one-directional, but short of the 95 / 5 washout read. Downtrend confirmed. Bottom not confirmed.
Market Profile
Value migrated lower into the end of the week. Friday has a string of single prints just like two weeks ago. This can be used as a play book for this week.
Open above the singles at 6445 area and consolidate below Tuesday’s low, re-short the break back below the single prints at 6445 later in the week. Just like Thursday of last week.
If we open below singles and stay there then sellers are still fully in control.
QQQ
Very similar analysis to the S&P… when the market breaks lower, you’ll know it because correlations all go to 1.
- MoHL thesis target: 540 (prior structure, monthly 20 SMA, fib 38.2).
- Weekly lower high, lower low, 50 SMA lost, weekly downtrend confirmed. Rallies that reject 595 keep bears in control.
- Daily key lower high on a rally: 593. Slightly more support / levels below before hitting the capitulation MoHL level. If markets are really going for the downside volatility, those levels won’t hold.
Semiconductors (SMH)
On the head and shoulders neckline. Acceptance below 376–370 opens the path to the 200 SMA. The one sector that still needs to crack for broad S&P capitulation. Most important chart early this week.
With NVDA breaking 171, that could easily spill into this becoming a reality..
If you want the full take, including all of the nuance of breadth, risk appetite and much, much more, check out the weekend episode here:
Economic & Earnings Calendar
Labor Data – Markets will be closed on Good Friday, but watching how the non-farm payroll number comes out will be most important.
Top watches: In the tail end of earnings season… nothing important.
Swing Stock Scans
As the S&P 500 breaks deliberately lower, swing trading long only will become increasingly difficult. Once a follow through day emerges, we’ll be looking to position in the strongest themes as and if a market recovery begins.
AKAM – Daily
Hammer with daily relative strength to the broad market. Leading theme adjacent to Agentic AI / cyber / cloud. Looking at this as a daily higher low setup over the 20 SMA.
MOD – Daily
Data center cooling theme. Relative strength to the broad market, but looking a bit double toppy on the daily. Worth keeping an eye on to see if we can build out a higher low over the MA stack.
VIAV – Daily
Another relative strength leader and correct group / theme. Friday high is the high volume close from 02 March 2026. Back through that level can setup a tight R:R spot for potential longs back to and through the local high.