08/27/2024

Hey Trader,

The month of August finished up Leo season with a roar. The market recovered nearly 50 points in just 15 trading days!

Contrary to popular belief, trading recoveries can be simpler than expected. 

I keep reminding members: if the market acts bullish, trade it like a bull market! The bulls had clear control as we continued to break back into the volume profile and pushed above resistance levels. 

However, things will get tricky as we approach all-time highs. We are likely to see one of two outcomes: either we get rejected at the highs and start this whole dang thing all over, or we break the highs and upgrade to a corner office.

Here’s my take: The market looks ready for a breakout, and if it’s going to happen, it needs to happen like…now.

The only significant bullish catalyst on the horizon is NVDA’s earnings report this Wednesday evening. If they absolutely crush it, we'll wake up on Thursday to a blue-sky breakout in SPY at all-time highs.

If NVDA doesn’t crush it, I don't foresee a SPY crash just yet. But it will likely lead to a drawn out consolidation period. The longer we consolidate, the higher the chance to fumble the football.

If you are hyper focused on NVDA, watch for it to stay above 103 after earnings. Ideal buy points are 106 and 115 — use these as buy levels if reached. However, if it drops below these levels post-earnings, we could see a sell-off down to about 90.

Or if you’d like to join the pack and trade NVDA earnings with us, click right here to sign up for our Trade to Close Free Week!

Up next, Mark has a market update PLUS a spotlight on NVDA so keep reading!

Market Moves and Big Money Flow Spotlight: NVDA

By Mark Sebastian

The spread between equal weight and cap weight (RSP vs SPY) appears to be tightening.

Since mid-July we’ve noticed that RSP hasn’t dropped as much and has recovered almost as quickly.  

Historically, equal weight has OUTPERFORMED cap-weighted.

Technology could be reshaping the market dynamics.

I think the extremes we saw before the carry bomb are probably done.

NVDA earnings could change that.  If NVDA reacts strongly, the S&P 500 could outperform equal weight once again.

Speaking of NVDA earnings…  

We saw huge volume for this week's options — over 1.15 million contracts on Monday alone. Buyers are clearly engaged, and the NVDA straddle for Friday is now over 15 dollars.

While the expected move is much larger than usual, it's worth noting that in similar situations, most (though not all) of the actual price moves have been more muted, often leaning slightly lower.

Don’t miss out on our Trade to Close Free Week right here! We are trading NVDA earnings together live this week.

See you there!

Always be closing,

Olivia Voz and Mark Sebastian