Why I am hoping for an NVIDIA wipeout

Mid-week market update: I am publishing the mid-week market update early for two reason. I wanted to respond to the recent market turmoil. And I have a dental appointment just after the market close so this will be in your inbox early.

 

The markets have taken a sudden risk-off tone in the last few days. Growing concerns about valuation and skepticism about the AI revolution is feeding those worries. Bloomberg published an article with the catchy headline "Stocks Face Sell Signal as Cash Holdings Drop in BofA Survey":

Investors’ cash positions dropped below a critical threshold in a monthly Bank of America Corp. survey, triggering a so-called sell signal for equities at a time of rising doubts around lofty technology valuations.

The average cash held by global fund managers fell to 3.7%, something that has only occurred 20 times since 2002. Stocks declined and Treasuries outperformed in the following one-to-three months each time that happened, strategist Michael Hartnett wrote in a note.

The big sources of volatility this week is the NVIDIA earnings report Wednesday after the close, followed by the much delayed October Payroll Report Thursday morning.

As the market turmoil continues, I am hoping for a wipeout from the NVIDIA report, as that could represent the wipeout market low which represents a buying opportunity.

 

The full post can be found here.