Stocks were down yesterday leading into the after hours earnings release from Nvidia. Let's cut right to the chase; Nvidia reported, beat estimates, but it was a little short or just inline with the whisper number that was circulating, and that's not good enough. After losing 2% before reporting, it was down another 7 to 8% in after hours trading so that sets up an interesting day of trading today.
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As volatile as this stocks is, things could flip around before the closing bell, or at worst maybe the next quarter, but so many people want to own this stock that it wouldn't be a surprise if this pullback, assuming it holds in overnight trading, doesn't last too long. Of course on the other hand, the market could be looking for an excuse to sell off during the September swoon, and maybe it uses this.
Here's the chart of Nvidia from Wednesday, including the after hours trading. As we talked about earlier in the week, Nvidia is a major holding of the semiconductor index, and as goes the semis... Let's just say it's difficult for the stock market in general to go up if the semis are falling.
Above is the SMH Semiconductor ETF trading after hours, moving in a similar direction to Nvidia, and here's what that would translate into on the daily chart if these after hours losses roll over into today's opening bell.
That's a bit of a breakdown as it would fall below several key moving averages, but if it can manage to close back above 240, we could be yawning over this move.
The 10-year Treasury Yield and the dollar were both up off recent lows yesterday. That likely added a little pressure on the stock market yesterday.
We'll get the Q2 GDP estimate this morning, and then the PCE Prices inflation report on Friday. Here's the long term trend of the PCE, which has come down substantially from the inflation rich readings from a couple of years ago, but it's still meaningfully above the long-term average. It actually ticked up a bit last month, so it's important for this to continue to head lower or it could throw a wrench in the Fed's interest rate cutting plan for the rest of the year.
Administrative Note: It's time for the 2024 NFL Survivor Contest again. It's a very easy contest to do - just pick one winning team every week and you move on to the next week. As always, it's free and there are prizes awarded to the last survivors. The deadline to register and make your week one pick is the start of the first game this coming Sunday. More information
The S&P 500 (C-fund) came back from a deep intraday sell off to close down, but somewhere in the middle of yesterday's trading range. I would think the S&P would not have a great day if Nvidia remains down 7% or more on the day, so perhaps we'll finally see an attempted fill of the open gap by 5450.
The DWCPF (S-fund) lagged a bit and lost 0.75% and, as I highlighted in yesterday's commentary, it could be creating a right shoulder of an inverted head and shoulders pattern, as it digest the recent rally off the lows.
The EFA (I-fund) was down, although not too bad considering the 0.57% gain in the dollar yesterday. 82 is the support for now as it was the broken resistance line, but those open gaps are too concerning to ignore.
BND (F-fund) was down and continues to trade in a tight range, and for now, in a bullish cup and handle like pattern. Today's GDP and tomorrow's PCE data will likely make or break this bullish formation.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
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As volatile as this stocks is, things could flip around before the closing bell, or at worst maybe the next quarter, but so many people want to own this stock that it wouldn't be a surprise if this pullback, assuming it holds in overnight trading, doesn't last too long. Of course on the other hand, the market could be looking for an excuse to sell off during the September swoon, and maybe it uses this.
Here's the chart of Nvidia from Wednesday, including the after hours trading. As we talked about earlier in the week, Nvidia is a major holding of the semiconductor index, and as goes the semis... Let's just say it's difficult for the stock market in general to go up if the semis are falling.
Above is the SMH Semiconductor ETF trading after hours, moving in a similar direction to Nvidia, and here's what that would translate into on the daily chart if these after hours losses roll over into today's opening bell.
That's a bit of a breakdown as it would fall below several key moving averages, but if it can manage to close back above 240, we could be yawning over this move.
The 10-year Treasury Yield and the dollar were both up off recent lows yesterday. That likely added a little pressure on the stock market yesterday.
We'll get the Q2 GDP estimate this morning, and then the PCE Prices inflation report on Friday. Here's the long term trend of the PCE, which has come down substantially from the inflation rich readings from a couple of years ago, but it's still meaningfully above the long-term average. It actually ticked up a bit last month, so it's important for this to continue to head lower or it could throw a wrench in the Fed's interest rate cutting plan for the rest of the year.
Administrative Note: It's time for the 2024 NFL Survivor Contest again. It's a very easy contest to do - just pick one winning team every week and you move on to the next week. As always, it's free and there are prizes awarded to the last survivors. The deadline to register and make your week one pick is the start of the first game this coming Sunday. More information
The S&P 500 (C-fund) came back from a deep intraday sell off to close down, but somewhere in the middle of yesterday's trading range. I would think the S&P would not have a great day if Nvidia remains down 7% or more on the day, so perhaps we'll finally see an attempted fill of the open gap by 5450.
The DWCPF (S-fund) lagged a bit and lost 0.75% and, as I highlighted in yesterday's commentary, it could be creating a right shoulder of an inverted head and shoulders pattern, as it digest the recent rally off the lows.
The EFA (I-fund) was down, although not too bad considering the 0.57% gain in the dollar yesterday. 82 is the support for now as it was the broken resistance line, but those open gaps are too concerning to ignore.
BND (F-fund) was down and continues to trade in a tight range, and for now, in a bullish cup and handle like pattern. Today's GDP and tomorrow's PCE data will likely make or break this bullish formation.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.html
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
