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Unspinning Wall Street: Is the Market at a Tipping Point? Nvidia and Tesla in Focus

The S&P 500’s steep drop over the past few sessions has left traders scrambling for direction. Is this a mere shakeout before another rally, or are we looking at the start of a much deeper correction? Today, we analyze the S&P 500’s latest move before diving into Nvidia (NVDA) and Tesla (TSLA)—two stocks at the epicenter of the market’s momentum shift.

S&P 500: Support Break or Just a Head Fake?

The index has been in freefall, slicing through key trendlines and sending momentum indicators into deep negative territory. This breakdown below 5,600 shattered near-term support, dropping the index to the convergence of the lower bounds of a short term and intermediate wave projection. Such convergences often market pivot points but when the don’t, the momentum usually accelerates.  Short term wave projections are updated weekly in Technical Trader. For Lee’s full, short term, intermediate and long-term market outlook with specific cycle price projections, see the latest Technical Trader report: Market on the Brink – What’s Next?

However, cycle-based indicators are nearing oversold extremes, meaning a reflex rally could be imminent. However, a failure here is likely to target the long term cycle line rising toward 5100 at the bottom of the chart, and it may only take a day or two.

Nvidia (NVDA): The AI Darling on the Edge

NVDA’s rapid decline is making headlines. Down 14% year-to-date, the stock has seen its valuation contract to 23.3x forward earnings—well below its 40x five-year average but still no bargain.

The stock is now testing key support near $115—a dramatic shift for what was once the AI-fueled market leader. It has erased months of gains, and its valuation has compressed to levels that may attract bargain hunters, but technicals are questionable at best.

Nvidia’s break below critical support levels is a red flag.

However, the initial breakdown of the classic top pattern had a conventional measured move objective of only 110, which has been reached. The convergence of lower wave band projections generated a rebound.  Momentum indicators are oversold, and there’s an initial short term buy signal on shorter term cycle indicators. Normally that would call for a reaction rally, but in bear markets such rallies often fail quickly.  Wave resistance shows up at 120. That’s a critical test.   

If NVDA can’t hold the $110-115 range, the next key support is near $100, and a deeper decline could follow.

Tesla (TSLA): Still Running on Empty?

Tesla’s downtrend is even more pronounced. Relative strength remains terrible, and key support levels keep failing. The $220 level is a very long term cycle line and the last major support before TSLA risks a larger breakdown.

Momentum and cycle indicators suggest it could be nearing a short-term bounce, but there’s no clear technical sign of a lasting reversal yet. Any bounce from here would need to clear $280 to be meaningful. Otherwise, this remains a short-sellers’ playground.

 

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Final Take: Where to From Here?

The market is teetering on a knife’s edge. If the Mag 7 doesn’t find support soon, broader weakness could accelerate. For now, risk management is key—respect technical signals, don’t chase falling knives, and stay disciplined.

With sentiment this shaky, traders who follow technical signals over narratives will have the best shot at coming out ahead.

Unspinning Wall Street means cutting through the noise, ignoring the hype, and trading with discipline.

Stay sharp.

— AI-vin Chat Monk