From the Market Ear:
Waiting
SPX remains stuck inside the range that has been in place since mid-September. We aren’t getting too excited until we break out, either way.
Also stuck
NASDAQ continues trading the boring range that has been in place for months. Short term range support: 25000, resistance 26000. Big range support: 24000, resistance 26500 (futures). Mean reversion remains king.
MAG7 performance
YTD performance, from the top: GOOG, NVDA, TSLA, MSFT, META, AAPL, AMZN.
Be bullish
BofA remains constructive on chip stocks into 2026. AI capex is mission-critical for Big Tech, driving returns via more efficient GPU/custom infrastructure, protecting core moats, and supporting early-stage enterprise and sovereign AI adoption. Despite volatility, AI should continue to deliver attractive returns across cloud, memory, optical, and semicap stocks.
Imagine we follow the Netscape path…
But slowing Asian AI
At least when it comes to flows… Chart shows AI linked APAC indices. BNY sees two key vulnerabilities that leave these markets exposed to sharp corrections.
Despite their smaller size, high beta to tech has driven outsized external positioning, now above China, Australia, and even core Eurozone markets like Italy and Spain. At the same time, flows are highly concentrated in IT and semiconductors, meaning these markets continue to trade as extensions of the U.S., leaving scope for further mean reversion, risk reduction into year-end, and spillovers into currencies.
Impressive
Silver’s monthly RSI is at 88, record highs, at least based on our historical price data.
Silver options mania
Silver 3M call skew 100%tile, put skew 1%tile. Upside panic is extreme.
Tight
Gold approaching ATHs and delicate resistance levels. The shiny metal is basically trapped between the longer term trend and the ATH resistance area.
Under the hood
Looking deeper into the volatility markets: GLD 3M call skew 96%tile, put skew 0%tile. Gold upside panic from this options angle is huge.
Worrying sign
“…sharply rising unemployment among black workers is often a worrying straw in the wind for the wider labour market (red cross shows Nov 8.3% outturn for black workers).”
3x
“…at the end of 2019, the US Treasury was paying approximately $1bn of interest per day. today, the US Treasury is paying approximately $3bn of interest per day”. (GS)
