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November 29, 2025 | Market Pulse: The S&P 500’s Buy-the-Dip} Rally: Silver Surges, While NVIDIA Faces Headwinds
Martin Straith
Strong US Stock Rebound: All three major US stock indices (S&P 500, Dow Jones, & Nasdaq) saw their best weekly performance since June, recovering from a mid-month slump.
The last few weeks have been a masterclass in market volatility, but a dramatic shift in sentiment has pulled the S&P 500 index back from the brink. After a sharp pullback from its late October high (which took the index down through its 50-Day Moving Average (DMA) and briefly tested the 100-DMA), the market has staged a solid rally.
The burning question for every investor: Why the sudden turnaround, and can it last?
The Anatomy of the V-Shaped Rebound
This latest bounce is a classic example of the “Buy the Dip” (BTD) mentality that has defined the current prolonged uptrend. When dips are quickly bought up, it signals confidence that any sell-off is temporary.
Technical Support Held: The 100-DMA proved to be the critical line in the sand. When the S&P 500 broke below the 50-DMA and dropped to this next major support level, buyers stepped in, preventing a larger technical breakdown.
Fed Rate Cut Hopes: The single biggest catalyst is the dramatic shift in expectations for the Federal Reserve. Just two weeks ago, the odds of a rate cut at the December 10th meeting were around 40%. They have now surged to an overwhelming 87%, injecting massive optimism and liquidity back into risk assets.
The Political ‘Dovish’ Factor: Speculation that Trump will replace current Fed Chair Powell with someone more “Dovish” (more inclined to cut rates quickly) is also acting as a short-term tailwind. However, a Fed that is perceived as too political or too aggressive in cutting rates could erode confidence in its inflation fight, leading to future volatility.
December’s Double Tailwind: Rally & Retracement Risks
The market is now entering a historically favorable period known as the ‘Santa Claus Rally’ (late November through January). This seasonal strength is powered by:
Fund Positioning: Large index-tracking funds repositioning capital into equities for year-end performance.
Short Covering: Traders who bet against the market are forced to buy back shares to close their positions, which amplifies the upward momentum.
BUT, we cannot ignore the near-term technical levels and upcoming economic data.
We are Technical Analysts, and for us, the charts always tell the true story. The S&P 500 is currently trading around 6850, just shy of a key resistance level.
The Critical Resistance: 6860: The index must decisively break and hold above 6860 to confirm this rally has conviction and is heading toward the all-time high of 6925.
The Warning Line: 6570: If the market fails to break 6860 and falls back below the recent 100-DMA support level of 6570, it would signal the “Buy the Dip” mantra has temporarily failed. This could trigger the start of a much deeper, 10% correction, sending the index toward 6150.
Finally, investors must keep a close eye on next week’s Personal Consumption Expenditure (PCE) report—the Fed’s favorite inflation metric. A hotter-than-expected PCE print could quickly reduce the odds of that December rate cut and put immediate pressure on growth stocks.
Our Take: The seasonal tailwinds and rate-cut optimism are strong, making a run at the all-time high of 6925 probable. However, if the S&P 500 stalls at 6860, the market could swiftly revert to a bearish trend. Stay disciplined and watch those key levels!
NVIDIA’s Pullback: Why the AI King is Losing Steam
Despite reporting genuinely huge earnings with revenue up 65% year-over-year (YoY), NVIDIA’s stock has faced significant pressure and is down 20% from its high at the start of November.
Markets are getting nervous about the company’s lofty valuations and the sustainability of its growth. Here is a breakdown of the key factors driving the recent sell-off:
Valuation and Size Concerns
Higher Than Nations: Just a few weeks ago, NVIDIA’s market capitalization reached an astonishing $5 trillion on October 25th.
To put that size into perspective, that single company valuation was higher than the entire GDP of Germany ($4.8 trillion} and Japan ($4.1 trillion} at the time. At these astronomical levels, the markets are scrutinizing every metric, and the sheer valuation is triggering caution among investors.
The Circular Financing Loop
A major concern centers on the quality of NVIDIA’s revenue. There is growing scrutiny over ‘circular financing’ in the AI ecosystem:
NVIDIA invests capital into its key AI customers (e.g., OpenAI, CoreWeave, XAI, and others).
Those customers then use that capital—often supplemented by debt or venture funding—to buy more NVIDIA chips and infrastructure.
This cycle potentially inflates NVIDIA’s reported revenue without corresponding true organic demand coming from end-users, creating a question mark over future sustainability.
The Looming Threat of Competition
Another significant hit to investor sentiment is the rising specter of competition, particularly from major tech players:
Competitors like Google and other hyperscalers are rapidly investing in developing their own custom-built AI chips (TPUs and custom accelerators) to reduce their reliance on NVIDIA. This trend could erode NVIDIA’s dominance in the critical data center market over the next few years.
The Bottom Line: The market is now becoming increasingly nervous about sustaining these incredibly high valuations and expectations for continued hyper-growth. While NVIDIA remains a leader, the convergence of competition risk and questions about organic revenue quality is causing a significant rotation out of the stock.
Silver has arguably been the most dramatic performer in the market this week, achieving an incredible milestone and reinforcing its position as a structural bull market.
Here is the narrative behind the white metal’s record-breaking week:
Silver prices soared past previous multi-decade highs, setting a new all-time nominal high by trading above $56 per ounce (the spot price reached as high as $56.67 at the close of the week).
This dramatic surge makes silver the clear leader in the precious metals space, having nearly doubled (up 95%) since the start of the year.
This rally is not purely speculative; it is underpinned by a severe and persistent physical supply deficit, now in its fifth consecutive year.
Industrial Demand: Robust and structural demand from the Green Energy Transition (especially solar panels, which are massive consumers of silver) and electronics is consistently outstripping supply.
Supply Constraints: Approximately 70% of silver production is a byproduct of mining other metals (like copper, lead, and zinc). This means higher silver prices do not easily incentivize a ramp-up in silver mine production, keeping the market fundamentally tight.
Warehouse Dwindling: Inventories in major global trading hubs like London and the Shanghai Futures Exchange have dropped to multi-year lows, creating critical scarcity of deliverable metal.
The final push to the new record high was dramatically amplified by a technical disruption at the world’s largest derivatives exchange, the CME (Comex).
Trading Halted: A cooling system failure at a data center caused futures trading to be halted for over ten hours on Friday.
Physical Market Takes Over: During the blackout, price discovery was forced to shift entirely to the physical spot and over-the-counter (OTC) markets, where the severe tightness and high demand—free from the typically dampening influence of paper-based futures trading—quickly asserted itself, causing the price to surge by over 5% in a single session.
The foundation for silver’s strength remains: the structural deficit is ongoing, and expectations for a December rate cut by the Federal Reserve are increasing (now 87% probability). Lower interest rates generally reduce the opportunity cost of holding non-yielding assets like silver and gold.
For investors, the key takeaway is that the ‘era of abundant, low-priced silver has come to an end,’ with fundamentals now driving the price action. The rally is fundamentally supported and expected to continue for the foreseeable future.
Bitcoin’s Wild Ride: A Tale of Two Volatilities and the $90K Hurdle
Bitcoin has continued its notoriously volatile journey, reminding investors why it is still considered a high-risk asset. Since its late-October run, the price action has been a roller coaster, dropping significantly before staging a sharp rebound.
Here is a look at the key dynamics shaping Bitcoin’s outlook:
Bitcoin has recently defied the ‘digital gold’ narrative, acting more like a high-beta tech stock than a safe-haven asset.
Correlation with Risk: When the broader market experienced a surge in risk-on sentiment this past week (driven by hopes of Fed rate cuts), Bitcoin followed, crossing back above the $90,000 psychological level. This behavior suggests it is still trading in tandem with risk assets like the Nasdaq, rather than against them.
Divergence from Gold: Meanwhile, Gold and Silver have shown significant independent strength, driven by traditional safe-haven demand. This sharp divergence in performance confirms that Bitcoin has not yet earned the title of a reliable hedge during times of crisis.
The price action suggests a battle between short-term technical selling and robust long-term institutional demand.
Liquidation and Leverage: The recent steep drop was likely fueled by the liquidation of highly leveraged positions in the derivatives market—a common feature of sharp crypto pullbacks. This forced selling can exaggerate market moves.
Institutional Demand: The existence and strong inflows into Spot Bitcoin ETFs in the US continue to provide a floor for the asset. This structural institutional demand is a critical long-term tailwind, suggesting that while volatility remains high, there is a consistent flow of capital supporting the asset.
The $90,000 Hurdle: The move back over $90,000 is a positive sign for short-term momentum. However, we will be watching to see if Bitcoin can consolidate and hold this level, suggesting that the worst of the sell-off (which dipped below $85,000) may be over.
Going Forward: What to Watch
- Macroeconomic Environment: If the Fed signals an earlier-than-expected rate cut, it will likely benefit Bitcoin by increasing risk appetite. Conversely, a delay or hotter-than-expected inflation data (like the upcoming PCE report) could pressure it.
Regulatory Certainty: Continued clarity from regulators, particularly around corporate accounting standards and ETF approvals in new jurisdictions, will drive sustained institutional adoption.
The Verdict: While the volatility is a reminder of Bitcoin’s risk profile, the institutional foundation suggests that price appreciation is likely in the long run. Investors should be prepared for sharp swings, but the current momentum indicates a path back toward the recent highs is possible if the general ‘risk-on’ environment continues.
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Martin Straith November 29th, 2025
Posted In: The Trend Letter