🔥NVIDIA / SNOW Miss.GDP Tomorrow!

Earnings after the close this evening led to weakness across the indexes and major sectors. The major indexes sold down after NVDA and SNOW released earnings that missed expectations and gave weak guidance. Specifically we saw weakness in the semiconductor and cloud sector. This put pressure on the entire market. As for good news, WSM, William and Sonoma beat earnings and raised guidance. We are seeing the higher end retail names holding their own. Ralph Lauren and Nordstrom both had good earnings. Nordstrom is even buying 500 million dollars of its own stock back in this environment which is commendable.

In regard to NVDA earnings here it is in a nutshell.

The issue lies in the 6th paragraph down. “second quarter revenue to come in at 8.1 Billion versus 8.45 Billion” No one wants to hear that the leading semiconductor company in the world is cutting revenue projections. Couple this with Snow earnings which were good but not great. Companies want to see cost cutting and SNOW did not show that. This coupled with its insane price to sales ratio of 35. To put this into perspective Stern business school did a study of historical average P/S of the software space. The average is 8.10

This could easily get cut in half again and will now be placed on the perma short list list with COIN UPST CVNA PTON and SNAP.

The next big hurdle for us is the GDP data due out tomorrow at 8:30 am. We are projecting -1.3%. This would be the second quarter in a row of negative GDP growth which technically is a recession. Anything worse than the estimate and the market will sell off. We continue to focus on Energy names as longer term hold and have done quite well with them and will continue to hold those names. Small caps are getting interesting and I review the Index in detail below with NVDA SNOW and WSM in the video linked below. Until this settles down Energy will be the focus and I will continue to short the rallies in tech. Let’s get to it!

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Subscribe and turn on notifications. There is a new daily video after the market Monday through Thursday! It’s called the Top 5 in 5. It consists of the best five ideas for the next day and I condense it into 5 minutes. It’s loaded with actionable ideas. It’s worth your time. It is hyper specific and actionable. Tonight’s includes Longs and Shorts. When you subscribe turn on ALL notifications so you are notified of the daily Premarket live shows ,Top 10 Weekly Buy List and educational videos. Also, Once subscribed you will receive private content on YouTube make sure all notifications are turned on so you receive it. The video below is the Top 5 from tonight and focused on NVDA SNOW WSM based upon the Earnings Reports tonight and the moves tomorrow. Pay close attention to what is said about the IWM, Small Caps, and how the TNX, 10 year, will affect stock indexes.

As always all investment decisions need to be made by the individual. We all have different risk profiles. No two people trade the same. Understand the buy points, stop losses, trims are suggestions. You need to develop your own process. I am willing to help. If you have questions email me Arete@Aretetrading.net. For example, to stop losses, I like to see them close. That does not mean that fits everyone’s risk profile.

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