Dow Jones Hits All Time High But Semiconductors And AI Stocks Get Hit Ahead Of Nvidia Earnings
Portfolio Pulse from The Arora Report
The Dow Jones Industrial Average (DJIA) reached an all-time high due to a rotation into cyclical and interest rate-sensitive stocks, while AI and semiconductor stocks, including Nvidia, faced selling pressure ahead of Nvidia's earnings report. The options market anticipates a 9% move post-earnings, with the momo crowd expecting a significant upside. Money flows are negative in major tech stocks and ETFs like SPY and QQQ.
August 27, 2024 | 4:45 pm
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NEUTRAL IMPACT
The SPDR Dow Jones Industrial Average ETF Trust (DIA) reached an all-time high due to a rotation into cyclical and interest rate-sensitive stocks. However, the breakout lacks conviction with low volume and overbought RSI, indicating potential vulnerability to a pullback.
DIA's all-time high is driven by a sector rotation, but technical indicators like low volume and overbought RSI suggest the move may not be sustainable, leading to a neutral short-term outlook.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Nvidia faces selling pressure from hedge funds and institutions ahead of its earnings report, despite aggressive buying by the momo crowd. The options market is pricing in a 9% move, indicating high volatility expectations.
Nvidia's stock is under pressure as smart money reduces risk ahead of earnings, countering the momo crowd's optimism. The expected 9% move post-earnings suggests high volatility, leading to a neutral short-term outlook.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Invesco QQQ Trust Series 1 (QQQ) sees negative money flows as investors move away from tech stocks, highlighting market caution ahead of Nvidia's earnings.
Negative money flows in QQQ reflect a broader market rotation away from tech, indicating potential short-term downside risk, especially with Nvidia's earnings on the horizon.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
SPDR S&P 500 ETF Trust (SPY) experiences negative money flows as investors rotate out of tech stocks, reflecting broader market sentiment ahead of Nvidia's earnings.
Negative money flows in SPY indicate a shift away from tech stocks, suggesting potential short-term downside pressure, especially with upcoming Nvidia earnings.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70