Strykr Analysis
BearishStrykr Pulse 43/100. Market internals are deteriorating, rotation out of tech is accelerating. Threat Level 3/5.
If you thought a flat Nasdaq meant a calm market, you haven’t been paying attention. Under the surface of that 23,114 print, the tectonic plates of risk are shifting in ways that should make even the most jaded trader sit up straight. The index is doing its best statue impression, but the rotation out of tech and into whatever passes for “value” these days is accelerating. The Dow ekes out a +0.4% gain, while the Nasdaq slips -0.2% and the QQQ ETF can’t decide if it’s $610.62 or $611.41. This is the market’s version of a poker face, expressionless, but with a twitch in the corner of its eye.
The news flow is a parade of warning signs. US private sector jobs came in at a laughable 22,000 (ADP, via WSJ), less than half the already pessimistic consensus. Car sales cratered to a three-year low, and the only thing moving faster than AI hype is the rotation out of last year’s market darlings. Schaeffer’s Research points out the S&P 500’s 1.4% January gain is supposed to be bullish, but the market isn’t buying it. Instead, we get a market where the big indices look placid, but the internals are screaming “risk off.”
Here’s the context. The last time the Nasdaq went this flat for this long was Q2 2023, right before the infamous “AI unwind” that vaporized $800 billion in tech market cap in three weeks. Back then, everyone thought sideways meant safe. It didn’t. Today, the setup is eerily similar. The AI trade is looking tired, with software and chip stocks stalling while old-school industrials and defensives suddenly find buyers. The macro backdrop is no help. The labor market is losing steam, the Fed is boxed in, and nobody wants to be the last one holding the bag when the music stops.
What’s really happening is a stealth de-risking. The big money is quietly rotating out of tech and into sectors that can survive a slowdown. The Nasdaq’s flatline is a mirage, masking a market that’s anything but calm. The volatility isn’t showing up in the headline index, but it’s everywhere else, single-stock dispersion is spiking, and sector correlations are breaking down. This is the kind of environment where complacency gets punished, and fast.
Strykr Watch
Technically, the Nasdaq is at a crossroads. The 23,100 level is critical support, with multiple failed breakdown attempts in the past two weeks. Resistance is clustered at 23,250, a level that’s capped every rally since mid-January. The QQQ ETF can’t get above $611.41, and the 50-day moving average is flattening out. RSI is stuck in the mid-50s, signaling indecision. Breadth is deteriorating, with fewer than 40% of Nasdaq stocks above their 20-day moving averages. If you’re looking for a tell, watch the semiconductors, if they break, the whole index could follow.
The risks are mounting. A deeper labor market miss or a hawkish Fed pivot could trigger a swift move below 23,000, with little support until 22,600. The AI trade is on life support, and if the rotation accelerates, we could see a sharp unwind reminiscent of 2023. Don’t be fooled by the calm surface, the real risk is under the hood.
On the opportunity side, this is a market for nimble traders. Fade the extremes, play the rotation, and don’t marry your positions. If the Nasdaq breaks below 23,100 with volume, look for a quick move to 22,600. If support holds and breadth improves, there’s a window for a relief rally back to 23,400. Just don’t overstay your welcome, this is a trader’s market, not an investor’s paradise.
Strykr Take
The Nasdaq’s flatline is a trap. Underneath the calm, the market is shifting in ways that will catch the complacent off guard. Stay nimble, respect the rotation, and don’t assume sideways means safe. The next big move is coming, and it won’t be gentle. DatePublished: 2026-02-04 15:45 UTC.
Sources (5)
Car sales sputtered in icy January. Poor weather wasn't the only problem for auto dealers and the U.S. economy.
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US private employers add 22,000 jobs in January, far below estimates: ADP
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This is a developing story.