EB Daily Market Report - Tuesday, February 25, 2025

Dear Members:

The market continues to be in a foul mood, with tech stocks especially under fire and just ahead of the biggest earnings report of the year. That report from NVDA, out tomorrow after the bell, could either help to put an end to the recent selling or if the bears get their way, result in further deterioriation.

Every major index is trading below their respective 20 and 50 day moving averages and in the case of small cap stocks, the ETF for the Russell 2000, the IWM, is trading below its 200 day moving average as well. This is somewhat of an interesting development given the recent and continuing decline in government bond yields.

The VIX is well off session highs but still elevated enough to keep traders on their toes. But if we continue to see further selling we're likely to see fear increase which in the near term will favor the bears.

Going back to November of last year we've seen traders willing to scoop up stocks on any dips. And 6000 has been a level the bulls have managed to hold on most pullbacks. So this is what we'll want to keep an eye on in the near term. In fact, we should keep an eye on 5900 as well as a move below that level could result in a pick up in selling. Below that we've got 5773, the January 13 low. 

It continues to be a good time to be cautious; the technical damage on the major indexes and the recent climb in the VIX favors the bears. And there's no telling how the market will react to NVDA's earnings after the bell tomorrow night. Thus its best to tread lightly until we see some more positive signs.

At your service,

John Hopkins