Nvidia’s Overhang End – NASDAQ 100 Still Vulnerable – Volatility Percolating
Summer doldrums are likely to end today with Nvidia reporting earnings. People ask why I am sometimes hostile to the media. Case in point. This morning, Sorkin made some stupid comment that this may be the most important earnings report ever. I think he added that it was “bigger than the markets”. I mean, come on. Give me the break of all breaks. Good thing hyperbole hasn’t entered.
No one on earth believes the report won’t be eye-poppingly spectacular. The question comes on future guidance, pricing and back orders. The stock bounced on Tuesday, but remains weaker into the print after the close. My thesis is to add to our position on a big gap down tomorrow. Short-term risk seems to be in the $180s. I think the stock makes a new high in Q4.
The NASDAQ 100 will be hard pressed to make meaningful headway without Nvidia. And it’s been months since I drew that blue arrow and said that you can’t be excited unless there is either a close above 30,500 or so, or a decent pullback and new bullish set up. Neither have come yet, but they should in the next five weeks.
Volatility has been really tamped down this month. Of course, it could be the start of a multi-month rally. However, I still think that before the market takes off again, we need to see the VIX spike well into the 20s. The set up is there.
Some folks have asked for comments on the national debt now that it hit $40 trillion. They’re coming shortly. Just know that both political parties are to blame. They both spend insanely beyond their means, just on different things.
On Monday we bought FAUG, PCY, more DLR and more XBI. On Tuesday we bought EMB.
