Date: August 23, 2023

Reversals Abound – All Eyes on Nvidia

Friday’s reversal from early losses looks interesting on a chart for sure as you can see below in the S&P 500, but Tuesday also showed a less impressive reversal. This time it was to the downside. While I expected more from the bulls after Friday, perhaps I am being a bit too impatient. We will have to see.

In what has become the most anticipated earnings report in a long time, Nvidia reports after the close today. The chart is below. When a company reports off cycle, meaning outside the normal window, it can get far too much attention, like now. The stock has had an epic run in 2023, fueled by the AI craze.

We own a half size position in our Unloved Gems strategy. The position is smaller because we own a number of semiconductors and they are much more volatile than the stock market. I do not have strong conviction how they will report, but even less at how the market reacts which is the important part and what I will be watching most. Purely guessing which is not something I do with the money I am entrusted, I would think the company exceeds expectations. I would certainly not be a buyer on a positive reaction after such a run.

I should note that the banks are down 7 straight days and utilities have been very weak as interest rates have spiked. Yet, the stock market has only declined 5%, at least so far. That’s important to note and probably a good topic to discuss on Friday. The pullback remains intact, but stocks are currently bouncing as I discussed.


On Monday we bought GDX, NUGT and more EPOL. On Tuesday we sold MDYHX and some levered NDX.


Paul Schatz, President, Heritage Capital