Nvidia’s upcoming earnings report will be a pivotal moment for the stock market, and particularly for Nvidia’s own stock (NVDA). The company’s guidance on Blackwell shipments, its next-generation system, will be a key factor in determining the near-term direction of the market.
The chart of NVDA stock reveals a recent rally after touching its support zone, followed by consolidation on average volume, suggesting a lack of strong conviction ahead of earnings. While the options market leans towards buying, the Arora Report’s VUD indicator, which measures net supply and demand, presents a mixed signal. The momo crowd, known for their aggressive buying based on momentum, is bullish on NVDA, aiming for a $150 price target post-earnings. However, institutions and hedge funds are cautiously trimming their NVDA holdings ahead of earnings, as they recognize the inherent risk associated with this event.
Whisper numbers, private forecasts shared by analysts with their top clients, suggest higher expectations for Nvidia earnings than consensus forecasts. The difference between these numbers and the reported figures will significantly influence stock movement. The potential delay in Blackwell shipments previously impacted NVDA stock, but analysts are now leaning towards a shorter delay of four to six weeks, contributing to the recent rally.
Beyond NVDA, the Magnificent Seven, including Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), Microsoft (MSFT), and Tesla (TSLA), are showing mixed money flows in early trading. Investors can gain an edge by understanding these flows, especially in major ETFs like SPY and QQQ, and by identifying when smart money is buying assets like stocks, gold, and oil.
Bitcoin (BTC/USD) has experienced a significant sell-off as whales unload their holdings to retail investors. This pattern is common, with whales capitalizing on retail buying momentum. Other factors negatively impacting Bitcoin include the arrest of Telegram founder Pavel Durov by French authorities, a crash in toncoin (linked to Telegram), and Russia’s potential use of crypto exchanges to bypass U.S. sanctions.
Looking ahead, investors should focus on long-term positions and consider implementing a protection band consisting of cash, Treasury bills, short-term tactical trades, and hedges. This approach allows for both upside participation and downside protection. A protection band of 0% indicates full investment, while a 100% band suggests aggressive protection through cash, hedges, or short selling.
The traditional 60/40 portfolio approach is less favorable for long-duration strategic bond allocation at this time. Instead, investors may consider focusing on high-quality bonds with shorter durations or utilizing bond ETFs tactically.
The Arora Report has a strong track record of accurate calls, including the recent AI rally, the 2023 bull market, the 2022 bear market, and other significant market events. Investors can gain valuable insights by staying informed about market trends and utilizing the tools and strategies discussed in this analysis.
