Stock Market: Why AI Isn't Driving Markets Higher Anymore (And My Key Levels)

Welcome everyone to this market update. Honestly, the current situation is quite peculiar: we're getting a bit bored, aren't we? It's been two months since US indices have been treading water. We are stuck in what we call a "range," meaning prices are navigating between two boundaries without taking a clear direction.

Despite the buzz around artificial intelligence, the economy is stagnating. You're probably wondering why the Nasdaq isn't taking off when AI is everywhere? That's the paradox I'm going to explain, before giving you my precise levels to trade this situation.

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1. The Financial Truth Behind AI

In my view, we need to face the reality of the numbers. We're told about an ultra-dynamic revolution, yet stock markets are stagnating. The problem is structural:

1. Costs are colossal: Running models like ChatGPT costs a fortune in servers. For now, these companies are losing billions.
2. Profitability is pending: It’s an extraordinary model, certainly, but not yet profitable. Massive borrowing is needed to avoid sinking next year.
3. The concentration phase: Just like with automobiles at the beginning of the last century (we went from 90 manufacturers to a handful), many AI players will disappear or be bought out.

Basically, it's great, but it's not a money printer for investors yet. That's why tech is marking time.

2. US Markets: How to Play the "Range"

On the pure trading side, this stagnation gives us a fairly readable strategy, albeit a tedious one. On the Nasdaq and S&P 500, the scenario is identical.

• The context: We've been oscillating for two months. As soon as Donald Trump gets angry (geopolitical threats), we hit the bottom. As soon as he talks about tax cuts, we go back up.
• My buying zone: I'm carefully watching the 25,500 points level. It's a key pivot. If we return to it, there are many buyers ready to pay. It’s ideal for a small "scalp" (a quick round trip).
• The resistance: Around 26,000 points, it blocks systematically. There is a sort of glass ceiling that we can't seem to break through.

It's the same story on the Dow Jones. After a nice push in December thanks to investors fleeing overpriced tech, we are saturating.

3. Europe and the CAC 40 in Trouble

If you're barely holding it together, skip this paragraph. The situation in Europe is much heavier than in the United States.

• The DAX 40 (Germany): It's resisting a bit better but remains stuck in a bearish range. As long as we hold the previous month's high, we keep a little hope, but it's fragile.
• The CAC 40 (France): Here, it's a drop. We lost 5% recently, and the symbolic level of 8,000 points is a zone of intense struggle. Between threats of US taxes on our wines and the lack of political dynamism (pension debates vs. AI revolution), investors are skittish.

Concretely, the French index is bouncing off its lows, while Germany is bouncing off its highs. That says it all.

4. Safe Havens: The Great Divide

Finally, the current uncertainty has created a spectacular divergence between two often-compared assets.

• Gold (The true refuge): It is exploding to the upside, stringing together records. This is the classic reaction to fear and geopolitical tensions. We've gained almost 15% since the beginning of the year.
• Bitcoin (The false refuge?): Unlike gold, Bitcoin isn't protecting anyone right now. It's at its lowest for 15 days and is suffering shocks. If you were looking for immediate security, this wasn't the right horse these past few weeks.

Conclusion

To summarize, be careful. We are in "manic" phases dictated by current events and political statements. The market alternates between hyperactivity and total rest. In this context of waiting, prioritize key levels (like 25,500 on the Nasdaq) and don't try to anticipate a breakout that isn't coming. Discipline and patience above all.

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