The SPY gapped down on the big news of Jensen resigning at NVDA. It was back under the 21 ema but at the moment has recovered and the last 5 sessions have all been contained in last week’s massive candle down. I don’t know why everyone is so shocked this happened at Nvidia, I said he was probably out in the monday recap but I didn’t think it would be this quick. Can you imagine how bad everything must be looking for him to just quit without fighting for his role at the company he built? I know everyone wants to be a hero but this is likely just beginning. You’re talking now as cheap as NVDA was, the Jensen premium is gone and it will trade cheaper with a new CEO. The company can function well and the multiple still compresses. What news is coming out about Megaspeed that he just quit without seeing this through? Everyone is talking about their pristine balance sheet, well what happens if they’re found to be violating export restrictions? My guess it probably leads to some record fine from our Government that wipes out a good chunk of their balance sheet if Jensen knew. You don’t want to buy companies with question marks, there’s so many other places to waste time. Of course there will be big bounces, companies this size rarely decline 40% in a month. This is going to be a long and painful bottoming process with lots of headlines dropping out of nowhere. You don’t get a special medal for making 20% in Nvidia vs making 20% in any other name, so why waste time in what is sure to be a train wreck of epic proportions? I would only be a buyer of NVDA at or below the 200 week which right now is in the low 120’s. If you buy NVDA now you’re getting it for the same price it was in the March selloff and their most important employee is now gone. Seems silly to me.
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Here are today’s large cap momentum scans from the database, lots of names today, people find it hard to believe but the market outside of the ai trade is actually very fine. It’s just unfortunately everyone seems to be 90% long the ai trade.
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Trades I Made Today
