Market wants to rally but faces uncertainty; asks what charts indicate.
Sam
Nathan Peterson
Market rallied 4% from lows despite higher oil, driven by upward EPS revisions, AI secular growth, and firm jobs/retail data.
Closes near daily highs show underlying strength.
Nathan Peterson
Geopolitical situation (Trump deadlines) differs from past; extended deadlines weaken urgency, making oil prices the key transmission mechanism to consumer.
Iranian regime may discount repeated deadline extensions.
Nathan Peterson
S&P 500 is within 0.5% of its 200-day SMA; a pullback is bearish confirmation, while a break above would bring sidelined money in.
Technical pivot depends on oil prices and geopolitical resolution.
Risk is binary; market torn between escalation threat and hope for circuit breaker; asks where oversold money would go.
Cites Mohamed El-Erian view and notes big tech pullback.
Sam
Nathan Peterson
Money going to stability of cash flow: utilities (above 50-day SMA) and mega-cap tech/AI infrastructure plays like memory stocks (Micron, SanDisk bouncing).
Energy leading, utilities #2; AI build-out still early/mid innings.
Nathan Peterson
Recession would compress multiples to ~15 from ~20, but market still betting AI growth overcomes headwinds; defensive recession playbook not yet activated.
Valuations in utilities/AI names could reset if recession odds rise.
Takeaway is to stay balanced across defensives and technology.