On the heels of last Friday’s nearly 1,000 point rally on the , whatever go get ’em bear mojo I had has exited Stage Left. Well, that’s not entirely true. I’ve got twenty-one short positions.
However: (a) they are all relatively small (b) they are all straight shorts, as opposed to aggressive options plays (c) I’ve balanced them out with two very large long positions. My cautious stance virtually guarantees a huge collapse in the near future.
Having presented my meekness, let’s thumb through a few index charts as we count down the hours at this point to the most important earnings announcement in human history: Wednesday afternoon event.
Simply stated, there’s almost nothing bearish about any of the index charts. In one form or another, almost every index has muscled its way higher, showing virtually no sign of breakdown, weakness, or hesitation. Here we see the near lifetime highs.
The Dow 30 has completed an inverted H&S and seems poised for another blast higher, particularly with NVDA as its biggest component.
The is just below its own lifetime highs. Just one good “kick” from NVDA on Wednesday evening would vault everything to new lifetime highs.
Small caps, too, have been leading the way higher lately. This is not to say there isn’t any success at all in bear-land. My only point is that it’s an awful lot like swimming upstream, particularly if the stream is a torrent.
Of course, the semiconductor index will be especially at the mercy of whatever NVDA doles out. It’s entirely possible that Nvidia blows the doors off. After all, they’re kind of the only game in town when it comes to what AI firms need. The day WILL come when they falter, and that might be Wednesday, or it might be years from now. With the trillions of dollars at stake on AI, it could well be that NVDA is continuing to print money since they have a near monopoly.
The charts are so consistently bullish as to be almost tedious. The , just like everything else, doesn’t have a single molecule of bearishness to its setup.
Thus, with all this going on, volatility is barely even hanging on to the teens at this point. We are scraping around the lowest levels seen in years.
The only teeny-tiny, teeny-weenie breakdown is happening in crypto-land, as seems to be in a state of true lethargy (relatively speaking!).
Of course, my fondest dream would be for NVDA to crap its trousers, but let’s just say I’m not getting my, umm, hope up. Thus, I’m playing things fairly safe.