Nvidia CEO Talks His Book

Please click here for an enlarged chart of Direxion Daily Semiconductor Bull 3X ETF (NYSE:SOXL).

Note the following:

  • The semiconductor mania is in full swing and driving the overall market.  For this reason, the SOXL chart is important.
  • The chart shows that on Friday SOXL fell 30.5%.
  • The chart shows SOXL fell into zone 1 (support).
  • The chart shows that volume was heavier than usual on the drop.
  • RSI on the chart shows SOXL is not yet oversold, even after Friday's drop.
  • The chart shows that this morning in the early trade, SOXL is seeing significant buying and has now moved above zone 1.
  • Prudent investors should watch if the buying in semiconductors in the early trade sustains through the rest of the day or if it fizzles out.  There was significant pumping by momo gurus over the weekend to buy the dip.  Once the buying from the weekend pump is exhausted, then will come the true test.
  • This morning, there is aggressive buying in semiconductor stocks, in big part, triggered by NVIDIA Corp (NASDAQ:NVDA) CEO Jensen Huang saying the selloff is a buying opportunity.
  • Nvidia’s CEO is the godfather of AI and a brilliant person.  He appears to believe in what he is saying.  At The Arora Report, we have been telling you since 2022 our high conviction call that money is to be made in AI all the way to 2030.  Huang's statement is in line with our analysis of the long term.  However, in the short term, it is a different story.  Prudent investors need to note that Huang is talking his book.  It is his job to run up AI stocks, and when they slide, to say something to stop the slide.
  • The bullishness is so pervasive that yesterday Iran firing missiles on Israel for the first time since April did not derail buying in Nasdaq futures.  This morning, more buying came in when Iran said it had concluded its military operation against Israel.  For context, Iran fired on Israel in response to Israel bombing Beirut.  Investors are gaining confidence knowing that President Trump is trying to rein in both Israel and Iran.
  • Adding to the bullishness this morning is that Marvell Technology Inc (NASDAQ:MRVL), a semiconductor stock, was added to the S&P 500 after the stock market closed on Friday.  Also adding to the bullishness is upgrades by analysts of Micron Technology Inc (NASDAQ:MU) and SanDisk Corp (NASDAQ:SNDK).
  • Apple Inc’s (NASDAQ:AAPL) WWDC starts today.  There are high hopes that Apple will announce its AI plans, and this time the AI overhaul will be successful.  Apple Intelligence was first introduced at the 2024 WWDC, but Apple Intelligence has turned out to be disappointing.
  • Excitement continues over the SpaceX (SPCX) IPO.  One of the cross currents from the SpaceX IPO is many investors selling tech stocks and speculative stocks to raise money to buy SPCX stock.
  • Consumer Price Index (CPI) will be released on Wednesday at 8:30am ET, followed by Producer Price Index (PPI) on Thursday at 8:30am ET.

Magnificent Seven Money Flows

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 (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Oil

Oil is giving up its earlier gains on news that Iran has finished its military operations against Israel.  

Bitcoin

Bitcoin (CRYPTO: BTC) is range bound.

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.