Chinese AI startup DeepSeek launched in December, reportedly developed in two months at a cost of under $6 million. This raises big questions about the return on investment for the billions which US companies have sunk into AI.

The US market, priced to perfection last week, is reconsidering those valuations with NVDA alone off almost 12%. The pullback we were expecting has been exceeded by quite a bit.

continued for members…

The SMA50 was a very strong backtest target but was easily broken.

This should provide a very clean channel backtest for SPX. While EURUSD is still showing strength……USDJPY has clearly broken down, almost reaching our SMA200 target.

 

Though CL and RB haven’t moved much overnight…

…the 10Y is way off on a good old fashioned fear trade.

We’ll be watching for signs of the 2s10s breaking out, with the curve steepening – not as the result of the 10Y spiking higher, but as the result of the 2Y plummeting faster than the 10Y.

It’s pretty obvious that COMP – already facing serious negative divergence – is at risk for much more downside. The top target is 18,154 or even 17,877 by mid-Feb – just after the higher-than-expected January CPI print due out on Feb 12.