Sell The News Reaction

Please click here for an enlarged chart of NVIDIA Corp (NASDAQ:NVDA).

Note the following:

  • This article is about the big picture, not an individual stock.  The chart of NVDA stock is being used to illustrate the point.
  • The chart shows the spike up in NVDA stock when Jensen Huang said at the GPU Tech Conference (GTC) that Nvidia now expects $1T in orders for Blackwell and Vera Rubin chips through 2027.  As a reference, last year, Nvidia projected sales of $500B from Blackwell and Vera Rubin chips through 2026. The news was better than anyone expected, and that was the reason behind NVDA stock jumping to yesterday's high shown on the chart.
  • The chart shows the high did not sustain.  There was a sell the news reaction with aggressive selling in NVDA stock.
  • The chart shows NVDA stock is like a coiled spring.  There were high hopes that GTC would launch a strong rally in NVDA stock and break out of the spring formation to the upside.  Even though Nvidia GTC has been extremely bullish, the sell the news reaction is not unexpected.  We have been sharing with you that NVDA stock is over-owned.  When a stock is over-owned, the formation seen on the chart is common. 
  • As full disclosure, we are long NVDA from an average of $12.55.
  • Nvidia GTC was extremely bullish with a number of announcements.  Most notable was Nvidia launching space computing.  We previously shared with you that Elon Musk sees big opportunities for AI in space.  Many experts have dismissed Musk's space AI comments as unrealistic.  Now, Nvidia is focusing on AI in space by bringing AI compute to space data centers.  All investors should be open to new opportunities in space. 
  • A very important event ahead for investors in AI is Micron Technology Inc (NASDAQ:MU) earnings to be released after the close tomorrow.
  • The FOMC meeting starts today.  The rate decision will be announced tomorrow at 2pm ET and will be followed by a press conference from Fed Chair Powell at 2:30pm ET.  There are very low expectations of a rate cut due to the rise in oil prices from the Iran war.
  • President Trump has delayed his meeting with China's President Xi so that he can be in the U.S. to direct the Iran war.
  • Even though Wall Street expects the Iran war to end soon and President Trump keeps saying that Iran has very little left, Iran continues to fight defiantly.  Israel says that it has killed Iran's security chief Larijani.
  • After falling yesterday on hopes of the Iran war ending soon, oil prices are back on the rise.  As to many observers, the postponement of President Trump's visit to China indicates that the war may be longer.
  • China buys about 90% of Iranian oil and wants to capture Taiwan.  Prudent investors should note that for investors, the Iran war has significant geopolitical implications in the long run, especially related to China's ambitions to capture Taiwan.  A delay in President Trump's visit buys China more time.
  • In spite of the Iran war, rising gas prices in the U.S, fears of stagflation, the FOMC meeting, and the sell the news reaction in NVDA stock, stock market sentiment is very positive.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis.

In the early trade, money flows are positive in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and Nvidia (NVDA).

In the early trade, money flows are neutral in Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), Alphabet Inc Class C (NASDAQ:GOOG), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (NYSE:SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Gold

The momo crowd is like a yoyo in gold in the early trade, and this is reflected in gold ETF (GLD), silver ETF (SLV), VanEck Gold Miners ETF (NYSE:GDX), and Global X Silver Miners ETF (NYSE:SIL).  Smart money is inactive in the early trade.

Bitcoin

Bitcoin (CRYPTO: BTC) continues to see more buying on hopes of a quick end to the Iran war.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.