The Whole Truth Behind NVDA’s Hype
02/21/2024
Hey Trader,
For the first time in a while, Mark and I are at odds… since NVIDIA Corp (NASDAQ: NVDA) has everyone talking…
Will this stock make or break the market? Or will NVDA’s earnings be a nothing-burger?
I’m Olivia Voz, your volume profile extraordinaire, and joined by Mark Sebastian, my ally in gains, we run the full gamut today.
You're in for a treat with both of our breakdowns, trust me.
We might disagree about NVDA, but hey, we've both got receipts—and only time will tell who's got it right…PLUS find out how to join our live show for FREE this Friday…
Get ready for a curveball—I'm about to dive into NVDA but this is likely NOT what you’ve heard before.
February is historically one of the worst performing months of the market. So they say. But it flipped the script so far in 2024, leaving jaws dropping all around.
It is the month of love, after all, and looks like stocks are smitten in 2024 with record highs, not the opposite!
But hold up—Wall Street is fixated on NVDA as the market's last hope for a dramatic pullback. 💀 I find this laughable.
Seriously, are we that desperate? NVDA's dance has little to do with the broader market, as shown below…
Check out this chart between NVDA and the QQQ. NVDA is the yellow line. QQQ’s candles are flatlined at the bottom...I threw AAPL in there (teal line) to demonstrate how AAPL is the one with a grip on the market, not NVDA. And even so, AAPL reported earnings weeks ago and while it has been a little shaken, the market still chugs higher.
While single stock earnings can cause a knee jerk precaution or reaction to the general market, I'm more focused on the aftermath.
The only concern I have about NVDA is the lack of volume on its sashay higher. If investors sour on their earnings, this stock can freefall down to 522. But that's an NVDA problem, not mine.
And don't get me started on the media frenzy. Typically, this type of coverage ends up all bark and no bite—or already priced in.
What interests me is the fact we started the short week in the red. There is no news or data today to take the punch bowl away. I suspect that this is the market pricing in a bad NVDA earnings. A little precaution trading ahead of the event like we discussed earlier. If that's the case, the market should shake it off and continue its journey.
On top of that, trading isn't easy. And everyone pointing to NVDA gapping lower and crashing the market for the rest of February just sounds way too obvious. And you know what they say about easy trading—it’s usually a one-way ticket to disappointment.
For an alternative view, here’s Mark’s take…
Earnings Spotlight: NVDA
By Mark Sebastian
NVDA earnings are the most important event this week.
Heading into earnings the normal expected move is about 6.2%....it is currently around 11%...so they are looking for fireworks.
However there are other events that matter. Most notably, today on Wednesday the FOMC minutes are dropping.
There are also a ton of earnings coming up.
The next 24 hours could be the most explosive 24 hours for the next few months…I think it could be more important than even a FOMC meeting or CPI.
NVDA has dragged the whole market higher.
Yet take a look at the SPX straddle.
At 47 dollars…less than 1% of the value of the SPX….it moved more than that on Tuesday….WITHOUT a major event.
The near-dated selling almost makes premium buying too easy.
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See you Friday — if not before!
Always be closing,
Olivia Voz and Mark Sebastian