🩻 Week 5, 2025: DeepSeek Shock & AI Sell-Off
Understanding the impact of trade policies on tech stocks and global markets
To Smart Investors,
We’re back with fresh, unbiased data for this week's US stock market.
Super Important Stuff!
The final version of the Oracle Indicator (v. 1.0) will be finally released tomorrow. And then, the guides will follow. The development will not stop at v. 1.0.
You can use DeepSeek R1 for free hosted on my new website: https://www.dgtvr.com/deepseek
I am not monitoring the queries or storing them; they are end-to-end encrypted, sent to my infrastructure in New York, processed, returned, and discarded—not stored in a database. Of course, you have to trust me on that, but I'd rather trust a random idiot on the Internet than deepseek(dot)com.
My model is also 10 times faster than deepseek(dot)com which 100% of data goes to China.
The free weekly Podcast is here:
Stuff I Published Last Week:
As Always In The Sunday Report:
I have written a detailed recap of last week’s market, my predictions for next week, and an ELI5 (Explain Me Like I’m 5).
You can also find my typical quant data and the stock insiders’ significant buys/sells with my interpretation.
Every day, I post summaries of news relevant to Investors. I try to post about 30 minutes before the markets open and cover the last 24 hours of news. On the weekends, I post in the afternoon.
Use the secret code to get my daily news newsletter for just $1/month or $10/year.
I’m slowly working on a new exciting newsletter. [FREE!]
S&P500 Heatmap over the last week
This graph was generated by our friends at TradingView. Did you know you can get 60% off the Premium plan forever, even though it's not Black Friday?
Excel data:
Our friends at TradingView generated these graphs. Did you know you can get 60% off the Premium plan forever, even though it's not Black Friday?
*Also, the chart above shows precisely why you need the Premium TradingView plan in your life. Plus, being able to monitor 8 graphs simultaneously while running complex indicators on them in parallel. Look into this:
SPY Technical & Macro Paradox Analysis
Below is a no-fluff, advanced analysis combining SPY’s daily-chart overview with the E-mini S&P futures perspective—backed by the Macro Paradox leading indicator (4–7 day lead), which has a ~70–80% accuracy in signaling broad market moves.
1. SPY Price Action & Structure
Local Top Near 610
Over the past month, SPY surged into the 610 region before encountering resistance.Current Pullback
Price recently retreated to the 601–602 zone, reflecting a short-term correction. Key pivot remains 600—any decisive breach could open the door toward 580–570.
2. Macro Paradox Indicator (4–7 Day Lead)
Signal Interpretation
Green Rising = Bullish momentum building.
Red Rising = Bearish momentum building.
Recent Read
Red has cooled slightly (mid-70s to ~70) while Green hovers ~35, hinting the pullback could be transitory if Green starts ticking upward.
If Red re-accelerates, expect heavier selling pressure and deeper downside tests.
Shareholder Note: With ~70–80% predictive accuracy, the Macro Paradox serves as an early warning system—but no single indicator is infallible. Use price, volume, and macro data for confirmation.
3. S&P E-mini Futures: Recent Action & Monday Setup
Late-Week Drop: Futures fell from ~6,130 to ~6,060, indicating a ~1% pullback into the weekend.
Near-Term Support: 6,050–6,060 is a critical zone. Holding above 6,050 pre-market Monday could stabilize SPY near 600. A break below 6,050 may signal extended weakness at the open.
Monday Scenarios
Stabilize & Rebound
Catalyst: Overnight futures basing above 6,050.
Outcome: SPY may open near 600 and recover intraday—especially if Green on Macro Paradox shows upward momentum.
Continuation of Downside
Catalyst: Futures breach 6,050 with increased selling.
Outcome: SPY could slip toward the mid-590s, aligning with a possible Red resurgence on Macro Paradox.
4. Final Thoughts & Risk Management
Key Levels:
SPY ~600 as pivot.
E-mini ~6,050 support.
Indicator Confirmation: Watch for Green (Macro Paradox) to move higher next week, signaling a rebound. If Red intensifies, brace for a deeper correction.
Shareholder Pressure demands tangible progress:
Use tight stops near critical supports.
Stay agile; a quick shift in futures sentiment can alter the near-term SPY outlook.
Bottom Line: A mild pullback might transition to a renewed bullish push if 600 (SPY) and 6,050 (E-mini) hold. However, any breakdown beneath these thresholds can accelerate broader selling into next week.
Disclaimer: This analysis is purely educational and not financial advice. Always consider multiple factors and your own risk tolerance before making trading decisions.
*Macro Paradox is available for free here
Please send feedback and ideas using comments, PMs, or email. I answer all emails and PMs personally. There is no personal assistant BS here.
And, as always — stay informed — and do your own due diligence,
May the LORD Bless You and Your Loved Ones,
Jack Roshi, PhD, Applied Mathematics at MIT
Lead Quant and Board Member, Sabre Capital GroupOpinions are my own
Weekly Market Recap
Executive Summary
Jan 27, 2025:
DeepSeek’s cost‐efficient R1 language model launch sparked an immediate sell-off in AI-related stocks. S&P, Nasdaq, and Dow futures fell sharply (–134, –830, –322 points, respectively), with NVIDIA down about 12% pre-market. Tech giants and semiconductor players (Microsoft, AMD, Broadcom) experienced declines amid mounting concerns about U.S. tech leadership. Meanwhile, notable outliers like Aurora Mobile surged over 200%, and SoFi fell 15% after weak guidance—all ahead of a busy earnings season and critical economic data (e.g., December New Home Sales).Jan 28, 2025:
Markets staged a modest rebound. NVIDIA recovered roughly 3% pre-market, even as the UK’s Competition and Markets Authority scrutinized Microsoft’s cloud dominance. Mixed earnings reports emerged—strong from Boeing, RTX, and Royal Caribbean, but weaker from GM and JetBlue—while treasury yields ticked higher (10‑year yield at 4.56%). Developments included Alibaba Cloud’s launch of its Qwen2.5-VL AI models and notable moves from firms like Juniper Networks, SoundHound AI, and Intuitive Machines.Jan 29, 2025:
Pre-market sentiment improved as Alibaba’s AI surge (with Qwen2.5-VL) and ASML’s record Q4 orders bolstered investor confidence—ASML climbed about 7%. Positive earnings signals came from Starbucks, Corning, and AMD, while Qorvo’s revenue concerns emerged after comments on its heavy reliance on Apple. Caution prevailed ahead of the FOMC decision and scheduled earnings from major names like Microsoft, Meta, and Tesla.Jan 30, 2025:
A day split by tragedy and divergent earnings. Early in the session, a collision between an American Airlines regional jet and a US Army Black Hawk near Washington D.C. led to fatalities and disrupted airport operations. Tech earnings were mixed: Meta and IBM posted strong Q4 numbers (with Meta up 2.2% after-hours and IBM nearly 9% higher), while Microsoft and Mobileye faced setbacks. In a later session, robust pre-market results from Apple (up 4%), AbbVie, and Vertex added positive momentum despite concerns over iPhone sales and market headwinds.
Overall:
The week was marked by acute volatility—initial pressure from disruptive AI competition and geopolitical tariff signals, followed by a mixed earnings landscape. Despite early turbulence, strategic corporate moves and selective strong Q4 performances helped major indices (especially the Dow) close January with modest gains, even as inflation and core economic indicators challenged market sentiment.
Detailed Day‑by‑Day Analysis:
Subscribe to access the full advanced breakdown below, featuring in-depth technical commentary, granular market data, and strategic insights.
Keep reading with a 7-day free trial
Subscribe to The Stock Insider to keep reading this post and get 7 days of free access to the full post archives.