Market at an Inflection Point: Nasdaq Recovers, but Semiconductors Break Down

November 5, 2026 | Pivotal Point Research

The market is presenting investors with a fascinating divergence.

Following the dramatic post-election reversal, the S&P 500 has recovered its important pivotal level of $764, while the Nasdaq 100 remains below a critical resistance zone. Gold has staged an impressive recovery, silver is attempting to reverse its downtrend, and Bitcoin continues to hold its important $75,000 level.

But beneath the surface, something deserves considerably more attention: the semiconductor sector has broken below its $500 pivotal level.

This is important because semiconductors have been one of the principal engines of the broader technology rally. If this weakness persists, it raises questions about whether the Nasdaq and the broader equity market can sustain their recent recovery.

We are not ready to declare a bear market. But we are approaching an important inflection point.

Here is what we are watching.

1. Nasdaq 100 (QQQ): The Recovery Is Not Yet a Confirmed Reversal

The Nasdaq has been in a broad uptrend over the past year, but it has spent much of the recent period consolidating within a large balance area.

We have seen several failed attempts to break out of this range. The July attempt was rejected, and the October breakout also failed.

Following the election, QQQ briefly broke below the lower boundary of the balance area, reaching approximately $668.96. That breakdown was quickly rejected, and the market recovered into its previous range.

However, we are barely back inside the range.

Yesterday, QQQ reached an intraday high of approximately $701.44, coming close to the $702–$704 pivotal area we had identified in our previous commentary.

That level remains the critical test.

What would change our view?

A convincing move above $702–$704 would provide evidence that the intermediate-term downtrend, which began around October 6, may be ending.

Until then, we remain cautious.

It is important to distinguish between the intermediate-term decline and the broader bull market. Looking at the past three years, the Nasdaq remains in a longer-term uptrend. A correction over the past several weeks does not automatically mean that the broader bull market has ended.

Our downside references are:

• $669: The low established during the post-election sell-off.
• $661: The larger situational-awareness reference.

A sustained break below $661 would materially change our assessment of the longer-term structure.

For now, the Nasdaq remains in an intermediate-term downtrend within a broader bull market.

2. S&P 500 (SPY): Relative Strength and an Important $764 Support Level

The S&P 500 continues to demonstrate better relative strength than the Nasdaq.

Following the initial post-election sell-off, SPY recovered sharply and moved back above the important $764 pivotal level.

What makes this level particularly interesting is the repeated price interaction around it.

The market tested $764 during the previous session, found buyers, and subsequently returned to test the same area again overnight.

This repeated defense makes $764 an important reference for the coming sessions.

What are we watching?

As long as SPY holds above $764, the technical picture remains constructive.

The next upside references are:

• $773–$775: The immediate resistance area.
• $781: The previous high.

However, if SPY begins trading convincingly below $762, the recent breakout could fail. In that situation, we would turn our attention toward $750.

The S&P 500 is holding up better than the Nasdaq, but this relative strength needs to be monitored alongside the semiconductor sector.

A market can continue advancing without every sector participating, but sustained weakness in a major leadership group is worth taking seriously.

3. Silver: A Rally, but the Downtrend Has Not Been Reversed

Silver has experienced a substantial correction.

Since its August high, the market has declined approximately 31%. Looking at the longer-term structure from the January high, the correction has been considerably larger.

The latest rally is encouraging, but silver remains below its important $55.55 pivotal level.

That is the level we want to see reclaimed before calling this a meaningful trend reversal.

There are two possibilities:

Bullish scenario: Silver breaks above $55.55 and begins establishing value at higher prices. That would improve the probability that the intermediate-term downtrend is ending.

Bearish scenario: The current rally proves to be a temporary short-covering move, and silver encounters resistance around $55.55 before resuming its decline.

For now, we are watching the level rather than anticipating the outcome.

4. Gold: A Potential Trend Reversal Is Developing

Gold is showing considerably more strength than silver.

Following the election, gold rallied approximately 6.5%, breaking through two important pivotal levels:

• $3,977
• $4,100

This is a meaningful development.

The market has not only recovered important technical references but has also moved back into its previous monthly trading range.

We are beginning to see evidence that the decline following the Jackson Hole Symposium may be reversing.

The level that matters now: $4,060

Although the technical picture has improved substantially, there is one important condition.

We do not want to see gold lose the $4,050–$4,061 area.

If gold can hold this zone and consolidate at higher prices, that would strengthen the reversal thesis.

If it falls back below this area, the probability of a move toward $3,880 increases.

One of the more constructive features of the recent price action is the way gold has rejected a previous low and subsequently moved higher.

When a market tests an earlier low, attracts responsive buying, and moves away from that area, it can create an attractive asymmetric setup.

Gold is now showing relative strength. The next task is to see whether it can maintain that strength.

5. Crude Oil and Energy: A Significant Correction Reaches an Important Support Area

Crude oil has experienced a sharp decline.

The market was already weakening ahead of the election, falling from approximately $104 toward $98. Following the election, the decline accelerated, taking crude toward the $86–$87 area.

This is important because $87 corresponds with previous monthly lows established in September and October.

The market has now reached a meaningful support area and is showing an initial attempt to stabilize.

This could develop into a potential reversal, although we need confirmation.

Energy equities

The Energy Select Sector ETF (XLE) has corrected approximately 10%.

We are watching whether XLE can recover toward the $61 area and, more importantly, how it responds there.

The strength of the energy sector will also depend on major constituents such as Valero, Phillips 66, ExxonMobil, and Chevron.

These stocks have contributed significantly to the sector's previous strength, but several have experienced sharp selling pressure.

The important observation is that the recent weakness has not been confined to technology and AI-related stocks. Energy has also experienced meaningful selling.

For crude oil, the $87 area is the immediate reference. We want to see whether buyers can defend it and establish a more durable recovery.

6. Treasury Bonds (TLT): The $82 Resistance Continues to Reject Buyers

Treasury bonds are attempting another breakout, but the market continues to encounter resistance around $82.

We have identified this level several times, including during the October 29 and November 2 attempts.

Each time, buyers have struggled to establish a sustained move above it.

The latest attempt is occurring ahead of Friday's employment report, making it important not to overinterpret the move.

What would a breakout mean?

A convincing move above $82 could open the possibility of another 2.5–6.5% advance.

TLT has already recovered approximately 8% from its October low, so there has been a meaningful improvement in the broader structure.

However, the $82–$82.50 area represents an important supply zone.

We want to see the market clear that area and establish value above it before becoming more constructive.

Friday's employment data could be an important catalyst.

7. Bitcoin: Holding $75,000, but $82,000 Is the Next Test

Bitcoin continues to demonstrate resilience.

We have repeatedly identified $75,000 as an important pivotal point. Despite the recent negative headlines and volatility, the market has held that level.

It is now approaching the upper portion of its current balance area.

The next important reference is $82,000.

A convincing break above $82,000 would indicate that Bitcoin is moving into its previous upper balance area. That would increase the probability of a move toward $88,000.

For now, the market remains within a broad trading range, approximately $75,000–$82,000.

We are looking for another sustained move higher before concluding that Bitcoin has resolved this consolidation to the upside.

8. Semiconductors (SMH): The Most Important Development of the Day

This is the market that deserves the most attention.

The semiconductor ETF has broken below its important $500 pivotal level.

That is a significant technical development because semiconductors have been a major driver of the technology bull market.

SMH had been in a powerful uptrend since 2023, and following the recovery from the tariff-related sell-off in 2025, it advanced approximately 223%.

But the recent correction has been substantial.

From its high near $671, SMH has declined approximately 25%.

We had previously identified $500 as the level that would put the larger uptrend in danger. That level has now been breached, with the early-morning market trading around $490.

What happens next?

We are looking at two very different possibilities.

Scenario 1: Continued weakness

If SMH remains below $500 and selling pressure accelerates, the next important reference is approximately $423.

A further decline toward that area would represent a substantial extension of the current correction.

The broader technical picture would deteriorate further if the market subsequently loses that level, with $363 becoming a more distant reference.

Scenario 2: A sharp reversal

The market could also recover quickly.

If SMH reclaims $500 and subsequently moves above approximately $510–$515, the traders who positioned for a breakdown could be forced to cover.

That could produce a powerful reversal toward the October highs and potentially higher levels.

This is why the next several trading sessions are important.

The breakdown has occurred, but we are still in the early stages of determining whether it will be sustained.

Why SMH matters to the broader market

The semiconductor sector contains several of the most influential companies in the Nasdaq 100, including Nvidia, AMD, and TSMC.

If this group continues to weaken, it becomes increasingly difficult to have confidence in a sustained Nasdaq recovery.

The S&P 500 has shown better relative strength, but that divergence cannot be ignored indefinitely.

For now, the technical bias in SMH has shifted toward the downside following the break below $500.

We are watching whether the market can reclaim that level or whether selling pressure takes it toward $423.

Key Levels to Watch

These are technical reference levels and conditional scenarios, not guaranteed targets or trading recommendations.

Final Thoughts: The Semiconductor Market May Determine What Happens Next

The broader market is sending mixed signals.

The S&P 500 has recovered its important pivotal level, gold is showing convincing relative strength, silver is attempting a recovery, and Bitcoin continues to hold its support.

But the Nasdaq remains below its important resistance area, and semiconductors have broken below $500.

That is the divergence we will be watching.

Can the S&P 500 continue advancing while the semiconductor sector weakens? Can the Nasdaq recover its intermediate-term structure without renewed leadership from its largest technology components?

These are the questions that will determine whether the current rally develops into a more durable advance or whether the market resumes its correction.

Friday's employment report adds another important variable.

We do not need to anticipate the outcome. We need to watch how markets respond at the pivotal levels.

The market will tell us when the trend has changed. Our job is to listen.

Pivotal Point Research

This commentary is for informational and educational purposes only. It represents general market observations and conditional scenarios, not individualized investment advice or a recommendation to buy or sell any security, futures contract, cryptocurrency, or other financial instrument. Trading involves substantial risk, including the possible loss of capital. Short selling and leveraged instruments can result in substantial losses. Readers should make independent decisions and consult qualified financial professionals where appropriate.