Nvidia Closes Unchanged!!! Nasdaq Smacked
Nvidia was way up in after hours trading near $515 but by NY open at $502 it was all sellers and the chart as we noted yesterday, looks abysmal:
We warned of this FOMO trade and deteriorating underlying fundamentals and thus we aren’t shocked by the massive reversal. Traders long this better hope JPowell saves the day tomorrow, because another nasty close lower in the Nasdaq will make for a very interesting open come Sunday night.
As far as the Nasdaq futures, we are just going to say it, our downtrend channel began in Mid July and it is the dominating theme right now putting sellers in control of this market. We highlighted 14949 for some time now and we are back below it now. The 0.382 fib is now some 1000 points lower, that is where we suspect the target and support is for now, with flows expected to see up days sold into:
As far as the SP500 and much like the 21p Vwap and 50p Vwap on the Nasdaq chart they both are about to put in a DEATH CROSS. Major rejection move today and we have seen moves like this get taken back the very next day so tomorrow is key:
As far as the Nikkei, we keep highlighting this as it too is exhibiting major top formation status:
Here is where the day settled out, we are getting used to these sea of red days aren’t we?
As far as the GFBP only one change to the futures sentiment tracker the reversal day took the Russell 2k flat (QR):
As far as the MEGA8s well they took back yesterday’s move and then some, and as noted yesterday the 375 QQQ call hedge negated the Trackers loss. We continue to believe that this tracker if it has indeed put in the highs, then the selling of calls every week should benefit the expected downward trajectory of the MEGA8s:
This tracker will cover that option on a move down below 0.20 which has been our target for most of these options. We will then resell on another up move if we can get one in the next few days ahead.
Alright Jackson Hole is here, let’s see if J Powell hints at pausing…one of our key pillars to fall next and we know what Powell is thinking, if he hints at a pause the market will continue to get pounded, because that means the data is so bad, and the outlook has deteriorated to the point where the only next move will be an emergency rate cut. We know the fundamentals on levered balance sheet is abysmal and that corporations over the next year will see massive increases in their WACC. We do not believe the equities are reflecting this risk but they are slowly about to catch on.
Hopefully you guys read our earlier post, we actually enjoyed writing it, its something we will continue to do in regards to conveying what we have learned over the last two decades of trading these markets. It is tough mentoring individuals in this algo driven financial market place, yet we also know that there isn’t a holy grail of algos that all can use to exploit, its a finite world. So we would rather share some of our experiences in hopes of influencing some of you to think non linear and outside the box. As we said in our earlier note, we owe it all too each other to share what we have learned, to pass our experiences on and that is what we intend to do.
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