DeepSeek Causes Large Gap Downs
Richard Moglen
Stock Trader & Student of the Markets. I help traders improve their systems & performance at TraderLion & Deepvue
January 27, 2025
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Market Action
QQQ – Negative Day with gap downs across the board especially in semi and AI related names.
Short Term Expectation based on the close is consolidation or lower. With this type of down bar there could be sizable reversals up or down and volatility should remain high for the time being.
On a gap up tomorrow on guard for continued follow through down
Bulls want to see build sideways or a strong rally up back through the MAs
Bears want to see us follow through lower or rally weakly then roll
IWM – Stronger, less tech focused so makes sense, still rejected off the 50 day for now
Bulls want to see us continue higher through the 50 or flag out constructively
Bears want to see us follow through lower breaking the 21
IBIT- Gap down but hold for now at the 21ema and pull in to the 50 day area.
Bulls want to see us build out sideways or a quick rally back to the range above
Bears want to see us follow through lower
Trends (1/4 Up) – Based on the QQQ
Shortest – 10 Day EMA – Below Declining
Short-term – 21 ema – Below Declining
Intermediate term – 50 sma – Below Rising
Longterm – 200 sma – Up – Above Rising
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Groups/Sectors
Performance Today from open on the Left, Performance over the past 20 days on the right.
Performance Charts from Deepvue
Deepvue Leaders Heatmap
S&P 500
Group Ranks: 1 Day, 1 Week, 1 Month, 3 Month from left to right. This is now a preset for Deepvue Members
Post Market Action
Leaders and Key Moves
NVDA large gap down with a poor close. Expect volatility as semis are directly in the line of fire if there is a more efficient AI.
Bulls want to see a sharp recovery, then a higher low after this extension.
Bears want to see follow through down or weak rally and then reconfirmation down
TSLA Gap down but holding the 50 for now ahead of earnings
RDDT great action after the gap down, strongest of the leaders as not really AI directly related
GEV heavy gap down back to the level of the base. looks like it needs time
PLTR gap down and hold of the 21ema for now
ALAB very negative bar, likely needs a new base
MSTR decent close although below the mas
TWLO recent gap holding up well for now
META strong action
Stocks Setting Up / Holding Up
HUBS and software names acted well, oops reversal off the MAs
UPWK forming a base, good close
XMTR high flyer in a range. Building related stocks acting alright
GLBE great oops reversal off the 21
TWLO acting well as mentioned
TEM interesting this still holding up alright setting up a range
SNOW good upside reversal, not the best close
SN good oops reversal near the base pivot
SHOP good close, watching for move up the right side of the base
NFLX holding up really well
RDDT watching for follow through
RBRK fade but holding the 21ema for now
Themes and Leaders
Key Themes: Software, Crypto, Energy. Space, Banks – AI SEMIS took a hit today
These names have the top RS, growth stories
RDDT SNOW
Market Thoughts & Focus
Key day today but I think the end of the week will provide the most clarity as the dust settles. If you took some big losses today remember to take a moment and accept it. A break from trading is always a good thing after a big event. Come back refreshed and relaxed.
Focus will be on non AI related names that are acting well, software – RDDT
Anything can happen as we saw, Day by Day – Managing risk along the way