5/25 Recap

Sending this out a 2nd time, substack didn’t include the charts on the first one, sorry

Nvidia saved the market. As I mentioned yesterday the last 3 breakdowns of the SPY happened to be minutes before the market was rescued by Microsoft, Meta, and Apple on separate days. Yesterday’s breakdown was followed by NVDA posting a 53% guide up which led to a $750B company rising another 30% today in one of the most fascinating moves I’ve ever seen. I don’t think it was the guide in particular but the 70% gross margins which NVDA has never seen before. Either way it’s not a common occurence to see $200b of market cap added in 1 session. It could be argued NVDA is actually not expensive and trading somewhere in the 30-35x next year’s earnings range. Still, today’s move is around the entire market cap of AMD which was also up 11% today in sympathy. Remember AMD was one of the top trending names this week as well. Just a bonkers move in tech. Everything is weak but tech, breadth is horrible, but it’s irrelevant because these big tech names are the bulk of the weighting in the market and how they move, moves everything.

The move is only coming in large caps, the IWM remains weak, look at ARKK, it is hammered down 3% and putting in a large bearish engulfing candle. Let’s look at some charts

The SPY, below, is teetering on that trendline, it’s too early in the day to know how it goes, but it’s fighting to get back over the 8 ema. Impressive strength into the long weekend where we were told the politicians already went home with no debt ceiling discussions to take place. You figure there might be some panic into the long weekend, if it’s coming it hasn’t shown it’s face yet.

The IWM,below, is the Russell 2000, and it’s breaking below all the key moving averages today and showing clear weakness. In bull markets, these names usually lead the way so this is an odd move we’re seeing.

ARKK,below, which is a good barometer of retail sentiment is down 10% in 3 sessions. Today’s candle is ominous if it can’t make a big move. The irony here is this is the ARK Innovation fund and they have all these horrible growth names and less than a 1% stake in NVDA. They literally have a man named Brett Winton who has the title of “Chief futurist” and he somehow missed this AI trend.

Trends

WTD

2 Week

1 Month

Today’s Unusual Options Activity & What Stood Out

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