NDQ - Descending Channel Breakout at $24,800 or Retest? US 100 IndexTVC:NDQofficialjackofalltrades What's up traders! 👋 The Nasdaq 100 is at a CRITICAL decision point after a volatile week. We've got weak GDP data, sticky inflation, Supreme Court tariff ruling, and Nvidia earnings next week. Let me break down what's happening on the 45-minute chart and why the next move could be MASSIVE. The Setup NDQ is trading at $24,500 after consolidating in a descending channel. Price is testing multiple consolidation zones while holding above the $23,800-$24,200 support. We've got descending resistance capping rallies, but the structure is showing potential for a breakout. The big question: Does this break above $24,800 for a run to $25,300-$25,900, or do we get rejected for a retest of $23,800 support before the next leg up? Why This Setup Matters Descending channel pattern (bearish structure but potential reversal) Multiple consolidation zones showing indecision Testing key resistance at $24,800 NVIDIA EARNINGS NEXT WEEK (Wednesday) = MAJOR CATALYST GDP missed badly (1.4% vs 3.0%) but market resilient PCE inflation sticky at 3.0% (Fed can't cut aggressively) Supreme Court struck down Trump tariffs, but he imposed NEW 10% tariff Tech sector under pressure (AI overspending concerns, valuations) Meta-Nvidia deal signals continued AI investment Private credit concerns (Blue Owl -6%, software sector risk) The News Context - February 20, 2026 This is a MIXED picture - tech resilience vs macro headwinds: Bullish catalysts: NVIDIA EARNINGS NEXT WEEK (Wednesday) - world's most valuable company Meta-Nvidia deal signals continued AI capex spending Meta plans to DOUBLE AI capex buildout in 2026 Big Tech earmarking hundreds of billions for AI investment U.S. manufacturing output biggest gain in 11 months (January) Strong employment data (jobless claims fell again) Philadelphia Fed business survey 2x forecasts U.S. imports surged (AI infrastructure spending) Supreme Court ruling removes tariff uncertainty (initially) Market showed resilience despite weak GDP Tech less sensitive to GDP weakness Bearish/Risk factors: GDP MISSED BADLY: 1.4% vs 3.0% expected (government shutdown impact) PCE inflation STICKY: Core at 3.0% (above Fed target) Fed can't cut aggressively (only 2 cuts expected in 2026) Trump imposed NEW 10% global tariff (uncertainty returns) Tech sector under pressure YTD (S&P 500, Mag 7, Nvidia all red) AI overspending concerns (circular investments among Big Tech) Nvidia close to $30B investment in OpenAI (its customer) New AI breakthroughs causing existential worries (software, wealth managers) Social media political pushback (negative impact on children) Private credit concerns: Blue Owl -6% (software sector AI damage) Blue Owl selling $1.4B assets, halting redemptions Tech valuations HIGH with limited evidence AI paying off Nasdaq futures initially dropped -0.43% on GDP/PCE data Key Levels I'm Watching Resistance: $24,800 - CRITICAL RESISTANCE / Upper consolidation bound $25,000 - Psychological level $25,300-$25,900 - MAJOR RESISTANCE ZONE / Former highs $26,000 - Extended target if breakout Support: $24,500 - Current price $24,200 - Immediate support / Consolidation level $23,800-$24,200 - MAJOR SUPPORT ZONE / Demand area $23,500 - Secondary support $23,000 - Extended support if breakdown Pattern Analysis - Descending Channel with Consolidation Price is trading in a descending channel with multiple consolidation zones, showing indecision: Descending resistance: Lower highs capping rallies (bearish structure) Descending support: Lower lows forming at bottom Multiple gray consolidation zones: Market indecision Current position: Testing upper consolidation at $24,800 Volume: Likely contracting (typical before breakout) Pattern: Descending channel can break either way, but support holding = potential reversal The key is whether we break above $24,800 or get rejected for another retest of support. Two Scenarios SCENARIO 1: Bullish Breakout (CAUTIOUS - 50%) Price breaks above $24,800 consolidation resistance, targets $25,300-$25,900 resistance zone. Break above $24,800 with volume Reclaim $25,000 psychological level Target 1: $25,300 (resistance zone lower) Target 2: $25,900 (resistance zone upper) Target 3: $26,000 (extended target) Triggers: Nvidia earnings BEAT expectations (Wednesday) Strong AI capex guidance from Nvidia Meta-Nvidia deal momentum continues Market shrugs off GDP weakness (temporary shutdown impact) Fed remains patient (no hawkish surprise) Tariff uncertainty fades Tech sector rotation back in This aligns with: Continued AI investment (Meta doubling capex) Strong manufacturing data (AI infrastructure) Market resilience despite bad news Support at $23,800-$24,200 holding Nvidia as bellwether for tech sector SCENARIO 2: Rejection & Retest (50%) Price gets rejected at $24,800 resistance, retests $23,800-$24,200 support before next move. Rejection at $24,800 consolidation resistance Pullback to $24,200 immediate support If $24,200 breaks, test $23,800-$24,200 major support Strong defense at support = long opportunity Resume uptrend after retest Triggers: Nvidia earnings MISS or weak guidance AI overspending concerns escalate Private credit contagion spreads (Blue Owl impact) GDP weakness continues (not just shutdown) Fed hawkish surprise (sticky inflation) Trump tariff uncertainty escalates Tech sector selling continues This would align with: Tech sector under pressure YTD AI overspending concerns High valuations with limited AI ROI evidence Sticky inflation (Fed can't cut aggressively) Private credit concerns The Nvidia Earnings Catalyst - CRITICAL Why Nvidia Matters: World's most valuable company Bellwether for entire tech sector and AI theme Earnings Wednesday next week Recent Meta-Nvidia deal signals continued demand Close to $30B investment in OpenAI (its customer) Big Tech earmarking hundreds of billions for AI in 2026 BUT: Concerns about circular investments among concentrated tech firms Market wants evidence AI spending is paying off What to Watch: Revenue and earnings beat/miss AI capex guidance for 2026 Data center demand outlook Commentary on AI ROI and customer spending Any concerns about overspending or circular investments Competitive landscape (AMD, custom chips) Market Impact: Strong earnings + guidance = NDQ breakout to $25,300-$25,900 Weak earnings or guidance = NDQ retest $23,800 or lower Nvidia's performance will set tone for entire tech sector S&P 500, Mag 7, and Nasdaq all watching closely GDP Miss & Inflation Concerns GDP Data (WEAK): Q4 GDP: 1.4% vs 3.0% expected (MASSIVE MISS) Government shutdown impact (43 days) Softer consumer spending Federal spending subtracted 0.9pp from headline Personal income excluding transfers only +0.1% annualized BUT: Real-time indicators suggested 3%, so 1.4% is disappointing Market initially dropped but recovered (resilience) Inflation Data (STICKY): PCE (Fed's preferred gauge): +0.4% vs 0.3% expected Core PCE: +0.4% vs 0.3% expected Year-over-year: Core at 3.0% (above Fed's 2% target) Inflation bottomed in April, slowly moving higher Fed can't cut aggressively (only 2 cuts expected in 2026) First cut expected June Combination of lower growth + higher inflation = not good for stocks Market Reaction: Nasdaq futures initially dropped -0.43% But market recovered and ended higher (resilience) Tech less sensitive to GDP (AI spending continues) Focus on temporary shutdown impact Sticky inflation = Fed patient (no cuts, but no hikes either) AI Investment vs Overspending Concerns Bullish AI Investment: Big Tech earmarking hundreds of billions for AI in 2026 Meta plans to DOUBLE AI capex buildout Meta-Nvidia deal signals continued demand U.S. manufacturing output biggest gain in 11 months (AI infrastructure) Strong import data (AI equipment) Philadelphia Fed business survey 2x forecasts Bearish Overspending Concerns: Circular investments among concentrated Big Tech firms Nvidia close to $30B investment in OpenAI (its customer) Limited evidence AI spending is paying off New AI breakthroughs causing existential worries (software, wealth managers) High valuations without clear ROI S&P 500, Mag 7, Nvidia all red YTD despite AI hype Private credit concerns: Blue Owl -6% (software sector AI damage) Blue Owl selling $1.4B assets, halting redemptions Contagion risk to other private credit firms (KKR, Apollo) Supreme Court Tariff Ruling What Happened: Supreme Court struck down Trump's global tariffs (6-3) Ruled he overstepped authority under emergency powers law Removes legal uncertainty (initially bullish) Potential $175B in tariff refunds BUT: Trump IMMEDIATELY imposed NEW 10% global tariff for 150 days Also initiating Section 301 investigations Uncertainty returns despite court ruling Market Impact: Initial rally on court ruling But Trump's new tariff brought volatility back Market ended higher despite chaos (resilience) Tech less tariff-sensitive than other sectors My Game Plan Cautiously bullish scenario (50%): I'm CAUTIOUSLY BULLISH with a BIG caveat - it all depends on Nvidia earnings next Wednesday. The setup shows consolidation at resistance, and the support at $23,800-$24,200 is holding. The AI investment theme is still alive (Meta doubling capex, Meta-Nvidia deal), and the market showed resilience despite weak GDP and sticky inflation. If Nvidia delivers strong earnings and guidance, we could break $24,800 and run to $25,300-$25,900. The manufacturing data and import surge suggest AI infrastructure spending is real. Bearish scenario (50%): The risks are REAL. Tech is under pressure YTD despite AI hype. GDP missed badly, inflation is sticky (Fed can't cut aggressively), and there are growing concerns about AI overspending with limited ROI evidence. The private credit situation (Blue Owl) could spread contagion. Nvidia is close to a $30B investment in OpenAI (its customer) - circular investment concerns. If Nvidia disappoints or shows weak guidance, we could retest $23,800 or lower. High valuations need to be justified. Key catalyst: NVIDIA EARNINGS WEDNESDAY. This is THE event. Strong earnings = breakout. Weak earnings = retest or breakdown. Everything else is noise until then. The Bottom Line I'm CAUTIOUSLY BULLISH on NDQ with a HUGE focus on Nvidia earnings next week. The setup is interesting: Bullish factors: Support at $23,800-$24,200 holding AI investment continuing (Meta doubling capex) Strong manufacturing data (AI infrastructure) Market resilience despite bad news Tech less sensitive to GDP weakness Nvidia earnings could be catalyst Bearish factors: Tech under pressure YTD GDP miss, sticky inflation AI overspending concerns High valuations, limited ROI evidence Private credit concerns (Blue Owl) Circular investment worries The $24,800 resistance is KEY. Break above = long to $25,300-$25,900. Reject = retest $23,800. But EVERYTHING depends on Nvidia earnings Wednesday. That's the catalyst that determines direction. What do you think? Breakout or retest? Drop your take! 👇 If this helped, smash that 🚀 Boost button! Not financial advice. DYOR.