1/22 US stock market review, after pulling back, it can still surge. Is it the main funds testing the waters or a bull trap!?

The annualized growth rate of U.S. real GDP in the third quarter of 2025 reached 3.7%, significantly higher than the long-term average. This indicates that the U.S. economy remains resilient under persistently high interest rates, with no signs of recession yet. The Trump administration softened its stance on tariffs, stating that no new tariffs would be imposed on European allies and expressing optimism about reaching a framework agreement on Greenland. This has removed a major external risk for the market, contributing to the recent strong rebound. The robust economic data suggests that the urgency for the Federal Reserve to cut interest rates has diminished, and high interest rates may persist for an extended period, putting pressure on high-valuation stocks.

SPY is currently hovering around the psychological barrier of 690-691, with key support at 686-687. As long as this level holds, the trend will favor further upward testing. If it stabilizes above 691 and confirms with a pullback, the next target range is 695-700. A break below 686 could lead to a retreat to 682 or even 676.

QQQ's key signal is strong buying interest around 618, with resistance at 622-624. If it stabilizes above 622, the target could extend to 632, with support at 618. A break below 618 may lead to a pullback to 615 or even 600.

The market currently has extremely high expectations for earnings reports. Simply "beating expectations" is no longer enough to drive stock prices higher. Focus is on high-quality, sustainable growth stories and management's outlook for the future.

The current market trend is driven by a decline in risk premiums, making it a "recovery rally" rather than a stable, low-volatility trend. It is advisable to follow the trend, avoid overexcitement, and capitalize on high-frequency intraday fluctuations. Investing should follow simple rules (buy low, sell high, control position sizes, and set stop-losses), but the challenge lies in overcoming emotional fluctuations and avoiding blind pursuit of mysterious indicators or chasing trends.

$SPDR S&P 500(SPY.US) 

$Invesco QQQ Trust(QQQ.US)