Don here...
The semiconductor index is on the verge of its highest daily close in history. That move is happening one day before NVIDIA reports earnings after the bell tomorrow.
Gianni Di Poce just broke down what this setup means and why the next 24 hours could define the direction of this market.
He is sitting at 90% cash with hedges on. He still wants to see a bit more downside to shift sentiment into true fear territory. But he made one thing clear: he is ready to pivot back to fully bullish on a dime.
The reason comes down to structure. NVIDIA has been trading in a 30 to 40 point range since July of last year. Gianni argues the stock has corrected through time instead of price, which opens the door for a blowoff rally if earnings deliver.
Last week brought the first real sign of life from growth sectors in months. The communication sector XLC emerged as the top performer on a weekly basis. One week does not make a trend, but Gianni sees it as a step in the right direction.
The currency market is adding fuel. The yen is today's biggest loser, which suggests the carry trade is back on in the near term. That dynamic has historically been a tailwind for tech, and Gianni points to it as a likely driver behind today's strength.
Bonds are cooperating too. The flight to safety that started at the January 20th low has pushed yields lower, and that backdrop is exactly what the tech sector needs to find a floor.
Here is what Gianni is watching in tonight's video:
-
The semiconductor index needs to close above 192.51 to post its highest daily close since January 29th, which would give bulls real momentum heading into NVIDIA earnings.
-
The Magnificent Seven PE premium has backed down to levels not seen in nearly a decade, making it hard to argue these names are overbought.
-
AMD rallied over 9% today while Broadcom held above support, showing pockets of strength underneath the broader tech weakness.
-
Apple is seeing a sharp rally, raising the question of whether it won the AI arms race by choosing not to play.
-
Software names like Palantir, Microsoft, and Coinbase remain under heavy pressure, with Coinbase taking out its low from last April.
The bulls are down but not out. Everything hinges on what NVIDIA delivers tomorrow after the close.
Click here to watch Gianni break down the key levels and his plan heading into NVIDIA earnings
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
Post a Comment
Post a Comment