“I winked at my own littleness, as people do at their own faults.” – Gulliver’s Travels

The giants have been hit hard, and we are reminded of the potential smallness of any stock at the right moment. I suspect the most intriguing part of the Nvidia (NVDA) (and Super Micro Computer (SMCI)) pullback was the rush of ever-higher share price targets in the days before the stock peaked.

Uptrend Intact

The uptrend is intact, and NVDA is quickly moving from extremely overbought to deeply oversold (see Relative Strength Index (RSI)). I suspect lots of new investors who chased the stock after the split (cost basis north of $120) are beginning to panic.

The selling has come in elevated volume, and the Rate of Change (ROC) has plummeted.

The following support points are the 50-day moving average and that big gap of around $95.00.

Growth sectors performed the worst during the session, although Communication Services (XLC) finished in the green.

There were no substantial winning factors, but seven of nine were in the green, which is refreshing.

Energy

Nine of the top ten advancers were all Energy (XLE) names.

There have been false starts, but the risk-reward favors Energy as a safe haven and a breakout (see trendline). It was the best session of the year for Energy.

Economic Data continues to swoon, but the Street is fixated on the “strong economy.” The Fed is too concerned with cutting too soon, but it's time to rally around Americans and avoid waiting too long, saving the market a lot of grief.

Today’s Session

All eyes are on Nvidia (NVDA), which dipped to $115.00 in after-hours trading. 

Fed heads are chiming in, and mixed signals are not helping the market.

Michelle Bowman

Bowman noted the possibility of a more restrictive approach to immigration, which has helped boost labor supply and bring the jobs market into better balance. But she also indicated the inflow of immigrants to some geographic areas could put upward pressure on rental costs, given low inventories of affordable housing.

Mary Daly

I know the illegal immigration housing issue is roiling.  My biggest worry for the Fed is they wait too long to cut rates.

Comments

The last part around housing should be a concern and needs explained further in my opinion. If the gov (at any level) is providing housing via hotel contracted stays, etc... Around how the job service sector/leisure/food service gains might be directly tied to it. Doesn't that alter, and inflated the job numbers, beyond the wealthy and well-set who can travel without care? Hope that makes sense. Terry Dowler on 6/25/2024 12:43:13 PM

YOUR Ltest two books are the best I'VE READ ON INEATMENT IN A LONG TIME. YOUR TWO RECENT BOOKS ON INVESTING ARE THE BEST I'VE READ RECENTLY ON INVESTING. SO GOOD,THAT I WILL BE INCORPORATING THEM AS REQUIRED READING IN MY GRADUATE SCHOOL CLASSES IN FINANCE, thomas shinick on 6/26/2024 5:39:12 PM

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