by Ivan Martchev
November 18, 2025
Last week, I witnessed something that I had not seen much this year – three-days of vicious rotations out of the technology sector, culminating in a massive sell-off on Thursday, followed by recovery on Friday that saw the NASDAQ 100 Index marginally trade below the climactic low reached the previous Friday:
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
If you had asked me a week ago what were the chances that the NASDAQ 100 Index would trade below its key low from two-weeks ago, I would not have guessed any more than a 10% chance, without bad geopolitical news and a federal government reopening. Yet it happened. Somebody is selling into strength – and in size. That became apparent two-weeks ago and again in the latter part of last week
Whatever happens next, we don’t want to see multiple daily closes below the blue-line (above) as the chances of a real correction, not just a sharp pull-back, increase exponentially. Corrections are normal in bull-markets, but I would have guessed that not many fund managers are positioned for a 5%-10% sell-off in November and December, the traditionally best two-consecutive months in the market year. In other words, this week needs to be positive for this to be just a sharp pull-back and not the start of a correction.
This is supposed to be the easiest time of the year in bull-markets, as the market indexes tend to cruise higher, even though that is not a guarantee – as we found out in the final-quarter of 2018.
A rotation out of technology stocks does not fully explain this surge in selling. The Russell 2000 Index and S&P 500 Equal Weight index – both the targets of prior inflows resulting from rotations out of technology – have lost momentum, flattened out for the last three-months and are breaking below key moving averages.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
I don’t think market volatility will necessarily subside this week, although it is possible as we experience upside volatility for a change. Nvidia, the largest AI chip manufacturer – which was the first company to reach $5-trillion in market cap – reports earnings tomorrow. I think the report will be good, as The Mag 7 companies are spending crazy amounts of money to build out their AI data-centers, and Nvidia makes the best GPU chipsets that power those data-centers. In other words, Nvidia ships chips out the door as fast as they can make them, and many of their large customers are on allocation, as they buy them immediately.
In one way, Nvidia is a victim of its own success. It is so large that a simple 10% pullback – which is not much for a semiconductor company – moves the whole stock market down. While their earnings report is expected to be good, I have no idea about the reaction of the stock market. I have seen the stock decline sharply on good earnings reports before. Complicating matters further is the September jobs report that will be released on Thursday (the day after Nvidia reports), which was delayed due to the government shut-down. The October jobs report likely will not be released, so the next time we get a timely jobs report release will be on the first Friday in December – covering the November jobs situation.
On Thursday, a weak jobs report might be good as it would fuel hopes for a December Fed rate cut, with odds now at 50:50, if you look at fed funds futures. So good earnings from Nvidia, as the stock has now pulled back as much as 10% from the recent high, and a weakish (but not too weak) jobs report may be best for the stock market. It is better for a company like Nvidia to pull back before it reports rather than to rally into earnings releases as it decreases the chance of a “sell the news” reaction, ceteris paribus.
Flies in the Ointment – Bitcoin, Softbank, Ukraine and Venezuela
Bitcoin used to be correlated positively with risk assets. If the NASDAQ 100 rallied, bitcoin rallied too – that sort of thing. It still is correlated, but the strength of the correlation ebbs and flows. Right now, bitcoin is experiencing a serious sell-off and, given the strength of the correlation with risk assets over time it needs to be kept in mind. Is bitcoin trying to tell us something? We’ll find out this week.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Another canary in the coal mine is Japan’s Softbank, which invests in public equities but also incubates many “unicorns” in their venture capital stage that turn out to be huge winners in public markets. Yes, it could be just a correction, but Softbank’s corrections can be much bigger than anything we’ve yet seen.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
I would try to keep an open mind going into this week and hope for the best but be prepared for the worst.
As for the nearly four-year-long war in Ukraine, based on recent maps the Russians have already overrun Pokrovsk and their encirclement strategy is nearly complete. Pokrovsk is gone, and that news didn’t move the U.S. market. Still, the largest U.S. aircraft carrier just moved within firing range of Venezuela. That threat has not moved the market yet, either. But if U.S. forces begin firing, I wouldn’t be so sure, given how Venezuela impacts energy markets and draws some parallels of what may be coming in Mexico.
Navellier & Associates: own Nvidia (NVDA), in managed accounts. Ivan Martchev does not own Nvidia (NVDA), personally.
All content above represents the opinion of Ivan Martchev of Navellier & Associates, Inc.
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Business Magazines Are Worth the Cost – As Contrarian Indicators
Global Mail by Ivan Martchev
Rotation Alone Does Not Explain Recent Market Volatility
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Ivan Martchev
INVESTMENT STRATEGIST
Ivan Martchev is an investment strategist with Navellier. Previously, Ivan served as editorial director at InvestorPlace Media. Ivan was editor of Louis Rukeyser’s Mutual Funds and associate editor of Personal Finance. Ivan is also co-author of The Silk Road to Riches (Financial Times Press). The book provided analysis of geopolitical issues and investment strategy in natural resources and emerging markets with an emphasis on Asia. The book also correctly predicted the collapse in the U.S. real estate market, the rise of precious metals, and the resulting increased investor interest in emerging markets. Ivan’s commentaries have been published by MSNBC, The Motley Fool, MarketWatch, and others. All content of “Global Mail” represents the opinion of Ivan Martchev
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