Trading The Close Market Recap - 02/24/2026: Nvidia Earnings in Focus — S&P's 6,800 Test, Nasdaq Wedge, Chip Rally

In today’s edition of the Trading The Close show, Pro Trader Drew Dosek at Verified Investing broke down a pivotal day in the markets. While the major indices staged a relief rally, shaking off some of the recent selling pressure in the software sector, the atmosphere remains tense with anticipation. The market is currently in a holding pattern, sandwiched between political theater—the State of the Union address—and the financial main event: Nvidia’s earnings report.

As traders navigate this calm before the potential storm, understanding the technical nuances of the S&P 500, the Nasdaq, and key sector rotations becomes paramount. Today’s analysis revealed critical "lines in the sand" for the indices, significant merger and acquisition rumors fueling individual stock moves, and technical divergences in the cryptocurrency markets that could signal near-term opportunities.

The Nvidia Waiting Game and Market Breadth

The overarching theme of today’s session was a pause in the aggressive selling that has plagued the software and AI-disruption sectors recently. Investors saw a reprieve, with stocks popping slightly as the "AI disruption" narrative that hammered software companies appeared to lose steam, at least temporarily. However, despite the green on the screen, the volume and conviction were somewhat muted.

The reason for this hesitation is clear: Nvidia. As the largest company in the stock market, Nvidia’s earnings report—scheduled for tomorrow after the bell—has the gravitational pull to dictate the direction of the entire market.

"We've been somewhat lighter and muted on a lot of big movements in the stock market this week, mainly because we have Nvidia earnings… Nvidia is the biggest company in the stock market. You better believe there's a lot of money that's going to be paying attention to those earnings tomorrow after hours."

This creates a binary environment where technical levels are respected, but breakouts may lack follow-through until the "event risk" of earnings is resolved. While the State of the Union address takes place tonight, Drew noted that it is unlikely to move markets significantly compared to the tangible financial data expected from Nvidia.

The S&P 500: The Bear Flag Persists

Technically, the S&P 500 had a positive session, closing up 0.77%. However, context is everything in technical analysis. Despite the green close, the index remains trading within the range of the previous day's candle. This price action is occurring within a larger "bear flag" pattern on the daily chart—a formation that typically implies a continuation of the downward trend.

The critical level to watch remains 6,800. As Drew emphasized, "That's still the line in the sand, has not been touched today." As long as the S&P 500 holds above this level, the bullish case survives. A robust earnings report from Nvidia could serve as the catalyst to invalidate the bear flag, potentially pushing the index up to test the top end of its parallel channel at 7,000, which would also challenge all-time highs. Conversely, a failure here keeps the probability of a breakdown below 6,800 in play.

Nasdaq 100: Approaching the Apex

The Nasdaq (NDX) showed slightly more relative strength than the S&P 500, attempting to break out of a specific technical structure. On the hourly chart, the index is compressing into a wedge pattern, a classic consolidation formation where price action tightens between converging trendlines.

We are currently approaching the apex of this wedge. In technical analysis, the closer price gets to the end of a wedge, the more explosive the subsequent move tends to be. The Nasdaq is currently testing a breakout to the upside, but confirmation is key. If the bullish momentum continues tomorrow, the next major resistance level sits at 25,486. Support remains firm at 24,117. The resolution of this wedge will likely coincide with the volatility injection from tomorrow’s semiconductor news.

Semiconductor Titans: Deals, Highs, and Divergences

The semiconductor sector (SMH) tagged new all-time highs today, driven by massive corporate deal announcements involving industry heavyweights. However, the price action across individual names varied significantly, offering a lesson in how news catalysts interact with technical resistance.

AMD and the Meta Commitment

Advanced Micro Devices (AMD) was the recipient of a massive vote of confidence—and capital—from Meta Platforms. News broke that Meta has committed to purchasing $60 billion in AI chips, a staggering figure that pads AMD's order book significantly.

The market’s reaction was a classic "pop and fade." AMD ripped higher in pre-market trading, reaching as high as $227, but opened lower at $213.63 and spent the day filling the gap from February 13th, closing around $213.

While the news is fundamentally bullish, the technicals tell a story of resistance. The stock was rejected exactly at a long-term inclining trendline connecting the April lows to the September 18th pivot. This trendline, currently sitting around $223.82, acts as the gatekeeper.

"That clearly states the line in the sand for AMD to get back into bullish mode… It needs to jump this trend line which is currently right around $223.82."

This scenario illustrates why traders cannot rely solely on headlines. Despite a $60 billion deal, the technical trendline acted as a ceiling, forcing the price back down. For bulls to regain control, AMD must reclaim that trendline; otherwise, the rejection serves as a bearish signal in the short term.

Apple and Taiwan Semiconductor (TSM)

Not to be outdone by Meta, Apple announced a commitment to purchase 100 million advanced chips from Taiwan Semiconductor (TSM). This news propelled TSM to fresh all-time highs, closing up 4.25%.

TSM’s chart shows a stock in a powerful uptrend, but one that is becoming extended. The weekly RSI is reading 80.17, and the daily RSI is at 71.44. In the world of technical analysis, these levels indicate an overbought condition where the probability of a pullback increases.

The stock has a history of breaking out, only to return to "the scene of the crime"—retesting the trendlines it previously conquered. Should TSM pull back to digest these gains, the first major support level is the inclining trendline around $356.94.

Apple, conversely, faces immediate headwinds. Despite the deal news, Apple is approaching a declining trendline resistance at $278.78. This level coincides with a "big red candle" from a previous sell-off, creating a zone of heavy supply. If Apple can clear this hurdle, the path opens toward the top of its parallel channel at $293.90.

The Danger of Chasing: Keysight Technologies

One of the most educational moments of the day came from Keysight Technologies (KEYS). The company, which provides critical testing solutions for AI data centers, reported robust earnings and guidance. The stock exploded upward, gaining 23.05% in a single session.

While this is a windfall for existing shareholders, it presents a dangerous trap for new money. The stock is now trading at an extreme overbought level, with a daily RSI of 86.46 and a weekly RSI of 87.65.

"Price doesn't stay here forever folks… If you're an investor in keys, I would highly encourage you to consider taking some profits right here in this range."

The stock has reached a trendline resistance dating back to March 2015, currently sitting near $313.09. When a stock goes parabolic and hits historical resistance with an RSI near 90, the statistical probability of a pullback or consolidation is extremely high. The disciplined trader looks to book profits into this strength rather than chasing the move. If a correction occurs, support lies significantly lower at $257.34, highlighting the risk-to-reward imbalance for new entries at these levels.

M&A Rumors: The PayPal Surge

Merger and acquisition rumors can be powerful drivers of price action, and PayPal is the latest beneficiary. Rumors swirled regarding a potential takeover by Stripe, with reports suggesting initial conversations with banks regarding funding.

This speculation drove PayPal up roughly 12-15% over the last two days, closing at $47. While no deal price has been confirmed—and indeed, deals often fall apart—the momentum is undeniable. However, trading on rumors requires strict adherence to technical targets to avoid being left holding the bag if the deal fails to materialize.

"Sometimes these deals just don't work out… But right now the momentum is pushing the price higher. So if you're in the stock, take some off the table if it is in the money."

Key levels to watch for PayPal include immediate resistance at $48.08. A break above that brings a gap fill at $52.30 into play, followed by significant resistance at $54.03. The most optimistic technical target before any deal pricing is announced appears to be just under $60. Traders should view these levels as opportunities to scale out of positions into strength.

Crypto and Commodities: Divergence and Pauses

Beyond equities, the crypto and commodity markets are showing distinct patterns that suggest upcoming reversals or continuations.

Bitcoin’s RSI Divergence

Bitcoin experienced selling pressure today, but a closer look at the chart reveals a bullish divergence that often precedes a bounce. While the price of Bitcoin has made lower lows recently, the Relative Strength Index (RSI) has made a higher low.

This "positive divergence" suggests that the downward momentum is exhausting, even if the price hasn't turned yet. Furthermore, the weekly RSI has dipped under 30, a classic oversold signal.

"We're starting to put in some divergence on the daily RSI chart that could imply near term bounce opportunity… up to around the $75,000 levels."

Drew remains bullish on a near-term bounce targeting $75,000 to $83,000, provided price holds above the recent lows. However, the macro view remains cautious, with a potential longer-term target sub-$40,000 if the broader structure breaks down.

Gold and Silver: The Pause

Precious metals took a breather today. Gold hit resistance and pulled back, a healthy consolidation that allows the trend to reset. The target for bulls remains the top of the parallel channel at $5,385.

Silver, however, is at a more precarious juncture. It paused right at the top of a parallel channel and near the high of the February 5th candle. For Silver to enter a true bullish mode, it must clear the hurdles established in early February. Failure to break out here leaves the metal vulnerable to a slide back toward macro support at the inclining trendline near $63.

Natural Gas: Bearish Continuation

Natural Gas continues to respect technical gravity. After being rejected from the bottom of a parallel channel, it sold off toward the lower end of its consolidation range. The near-term outlook remains bearish, with support targets at $2.71 and potentially lower at $2.41.

Conclusion: Discipline Amidst Volatility

As we look toward tomorrow, the market is poised on a knife's edge. The "relief rally" in software and the surge in semiconductors have provided optimism, but the technical structures—bear flags in the S&P, trendline resistance in AMD, and overbought conditions in winners like Keysight—demand caution.

The upcoming Nvidia earnings will likely serve as the arbiter for the next major market move. Will the S&P 500 break its bear flag and march toward 7,000, or will the 6,800 line in the sand be breached?

For traders, the lesson from today’s recap is one of precision. Whether it is waiting for a confirmed breakout in the Nasdaq wedge, taking profits on parabolic moves like Keysight, or spotting RSI divergence in Bitcoin, success lies in reacting to the data on the charts rather than the hype in the headlines. As Drew Dosek noted regarding the discipline required in these moments, the market will always provide opportunities, but capital preservation during uncertain events is the hallmark of a professional.