Financial News vs. Noise
Happy Thanksgiving to those who celebrate. The news of the day was NVDA earnings after hours but it looks like that was a dud so far. The stock is down 72bps in premarket trading and the markets are slightly in the green. Anyone who bought NVDA options ahead of earnings is going to get crushed this morning so it will be my top watch to see if we get some sort of playable move. Sales pitch for levered and inverse ETFs right there :)
The soap opera continues:
As expected, a bit of weakness in the market yesterday with the SPX failing to even test 4500. Rates continued to come down, which is bullish. Nothing has changed my sense that the path of least resistance is higher into year end, just don’t think they are going to make it that easy and we need to consolidate these gains. Unless NVDA starts a meaningful move I don’t think the rest of the week is going to tell us very much.
Speaking of NVDA that $500 level ought to be important for shorts or longs. A break either way could trigger a trade, with $500 as a stop. Watch the open as retail investors are likely to pile into the options to play the IV crush.
I had noticed the other day that the precious metals miners didn’t move up as you would have expected so they made up for it yesterday. Continue to think this is the most attractive way to play a lower rates, lower Dollar scenario.
Other areas that could be attractive based on my theme of buying things coming off bottoms vs. buying things breaking out to new highs are: Airlines, China names (currently in BABA), Solars (currently in RUN), biotech, and oil.
AI is a volatile name I added yesterday. I like the setup and it could be somewhat of a sympathy to NVDA, assuming NVDA goes red to green. You also saw an attempt to run the highly shorted names at the open which eventually failed, but they may try again
.On the short side we went back into RILY and AX yesterday and the regional banks look like they are setting up again.
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News vs. Noise
Nvidia Crushes Earnings on Soaring AI Chip Demand. The Stock Is Still Slipping.-Barron’s
Nvidia’s revenue was up 206% in its latest quarter, beating Wall Street’s expectations. The chip maker also provided a revenue forecast for the January quarter handily above estimates.
But the stock’s huge 2023 gains left investors wanting even more. Shares wavered in after hours trading.
Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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