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Nvidia After the Close Today
www.oneoption.com
This tech giant will impact the overall market.
PRE-OPEN MARKET COMMENTS WEDNESDAY – Yesterday the market inched closer to the 100-day MA. It looked poised to test it, but news that Saudi Arabia would invest $1T in the US stopped the bleeding and the market closed off of its low.
Nvdia will report earnings after the close today. Much of the recent rally has been driven by AI and crypto stocks. Both use GPUs and we’ll see if the earnings are strong enough to justify current valuations. Mega cap tech stocks like META, MSFT, TSLA and AMZN have been weak recently and only AAPL and GOOG have been strong. There seems to be “risk off” at current levels and that is unusual during a period of year-end seasonal strength.
Retailers are reporting and the reactions have been negative (HD and TGT). Consumer confidence if very low and WMT reports tomorrow.
The FOMC Minutes will be released today and we will be able to gauge if Fed officials are leaning towards a rate cut in December. I believe they are. Powell said that a rate cut is not a given and that’s a far cry from saying that there would not be one. The shutdown is going to impact economic growth and the Fed’s overnight repo facility has been active signaling possible liquidity issues. I believe that the Fed will cut rates and err on the side of caution.
Tomorrow the Bureau of Labor Statistics is going to release the September jobs report. Conditions were softening before the release, but I don’t think we can trust the number. We haven’t been able to trust the jobs number all year so I am not going to guess the level or the reaction. This is a crap shoot as far as I am concerned. Know that we have binary risk between the close today and the open tomorrow. Adjust risk.
I believe that the market is going to test the 100-day MA during this drop and it could happen this week. The bounce off of the 50-day MA two weeks ago produced a lower high and the market fell right back through it this week. Buyers are passive and the selling has come on heavy volume. We are also seeing late day selling and that is bearish. The SPY is within striking distance of $SPY $650 and it will act as a magnet. Financial stocks have been weak and XLF closed right at the 200-day MA. This is not a good sign and credit issues are brewing.
I am managing some bullish swing trades. Some of them are in good shape, some of them are not. I have been able to make money hedging with the stocks and futures. I am making money, but not a lot. I don’t plan to add to swing positions until the SPY tests the 100-day MA. The price action down to it needs to be sluggish and I need to see the market fly off of it instantly. If I see that I will take some bullish swing trades. If the move down to it is brisk and we spend time there, I am going to hold off.
This is a great time to day trade. The intraday swings have been wide and once they start the move tends to continue for an hour. You can trade either side, just make sure to take gains when the momentum stalls. We have pending news so this could be a day of rest.
Support and resistance are the range from yesterday.
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