Russia Threatens Nukes – Nvidia The Focus
The major stock market indices are within a solid day or two of all-time highs. From now into January is the most seasonally strong period. On Monday and Tuesday the war in Ukraine escalated with Russia threatening a nuclear response. Although the market fell quickly, buyers rushed in and the bulls had a big day as many scratched their heads. Remember, it’s not what the news is, but how markets react. This story doesn’t appear to be over and more volatility is likely to come.
While the stock market could have seen a short-term low on Tuesday, I see the real risk is to completely unwind the post-election rally which is another 2-3% lower. Nothing has changed in mind thesis that the quarter will end up higher by at least 5% and there should be another rally to new highs before year-end.
What has been deemed the most important stock in the market, Nvidia reports earnings after the close today. I am not sure who annointed Nvidia, but I am sure Apple has some hurt feelings. I have absolutely no idea what Nvidia will report and even if I did, gauging market reaction is more challenging. As I usually do, a huge rally tomorrow will have me considering some pruning of our position from the piece we added on August 5th. A large decline will need more time for action.
On Monday we bought GDX, NUGT and GMNV . We sold RMQHX, UWM and some QQQW. On Tuesday we bought MQQQ, MTUM, XSMO, UWM and more QQQW. We sold IJS, SPLV, SPHB and some TFLO.
