Weekly Wisdom: NVDA, NVDA, NVDA

Greetings fellow traders and welcome to your February 15th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Now let's get to what we're currently seeing in these volatile markets and what we have our focus on going forward.

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Taking a look back on this week, February 19 - 23:

• Markets were closed on Monday in observance of Presidents’ Day.
• Data for the week began on Tuesday with a slight miss on the Conference Board’s leading economic indicators index m/m coming in at -0.4% vs -0.3%.??
• Wednesday’s FOMC minutes brought more of the same information we have been seeing from the central bank, with some members pointing out potential downside risks from maintaining an overly restrictive stance for too long, while others noted that progress on inflation could stall.?
• $NVDA reported earnings after the close Wednesday, beating expectations across the board. $NVDA reported Q4 EPS of $5.16 vs. $4.54 expected, revenue of $22.1 billion vs $20.3 billion expected, and guided for Q1 revenue of $23.5 billion to $24.5 billion vs $21.5 billion expected, giving a solid move higher into Thursday's session.
• Thursday’s weekly unemployment claims were a beat at 201,000 vs 217,000 expected. Flash manufacturing PMI was also a beat at 51.5 vs 50.5 expected, with flash services PMI missing at 51.3 vs 52.4 expected. Existing home sales was a beat at 4.00 million vs 3.96 million expected.??
• Friday, February 23 does not bring any meaningful data to end the shortened holiday week.?

Here's what we are eyeing next week, February 26 - March 1:

Level Highlights:

• $SPX futures once again made new all time highs this week with the help of another stellar earnings report from $NVDA.??
• Prior to the report, markets were stalling out after last week’s hotter than expected CPI stalled some momentum.??
• $NVDA fell from a high of 745 to a low of 663 before beating on earnings and then trading up to as high as 781 on Thursday to make another new all time high. This move gave the overall market a big boost higher.??
• $SPX futures have now traded to new all time highs of 5094 and continue to rise during Thursday’s session.??
• Bulls are looking for a measured move up to 5150 after breaking out of the 5050-4950 range put in throughout the past week.??
• After getting the potential measured move, market participants should keep an eye on a potential big picture $VIX / $VVIX divergence forming.?
• Despite the market continuing to make higher highs, the $VIX has been making higher lows on the daily chart since the bottom came in under 12 back in mid December.??
• The $VVIX is also working on making higher lows on the daily chart after double bottoming off the 75 level back in January.?
• Bulls may want to be careful adding too much long exposure once again should the $SPX keep making new highs without seeing any lower lows come in on the $VIX daily chart.?

Upcoming News:

• Monday, February 26 starts the week off with new home sales at 10:00 a.m. ET.
• Tuesday, February 27 kicks off with durable goods orders and core durable goods orders m/m at 8:30 a.m. ET. This is followed by the Conference Board's consumer confidence index and the Richmond Fed manufacturing index at 10:00 a.m. ET.??
• Wednesday, February 28 brings us preliminary GDP q/q, preliminary GDP price index q/q, the goods trade balance, and preliminary wholesale inventories m/m all at 8:30 a.m. ET.??
• Thursday, February 29 we’ll get weekly unemployment claims, headline and core PCE price index m/m, personal income m/m, and personal spending m/m at 8:30 a.m. ET. We’ll then see Chicago PMI at 9:45 a.m. ET, followed by pending home sales m/m at 10:00 a.m. ET.?
• Friday, March 1 ends the week and begins the month of March with final manufacturing PMI at 9:45 a.m. ET, followed by ISM manufacturing PMI, revised University of Michigan consumer sentiment / inflation expectations, ISM manufacturing prices, and construction spending m/m all at 10:00 a.m. ET.?

Here's Your Chart of the Week:

Via Morgan Stanley Research, Bloomberg: Fed Funds Futures have finally begun to push back the rate cuts they had been pricing in beginning in March, with the first cut looking to be coming in June now - however, this has not had any impact on the equities market yet

Source

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SPY Daily Update:

$SPY breaking out to new all time highs with the help of $NVDA. There is a measured move up to 513 from the 503-493 range made throughout the last week.?

SPY Weekly Update:

$SPY weekly chart broke the green streak last week but still managed to close with a solid lower tail, showing continuation potential which we are seeing this week. Bears should note the $VIX divergence of higher lows forming on the daily chart.

Want to Trade With My Team? Click here!

-Patrick Hawe

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Disclosures

Patrick Hawe's current positions:

*As of 2:27pm ET? February 22, 2024

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