The Bears Last Line Of Defense

Over the last three weeks, the markets have displayed an impressive bull run not seen since 2021. Not only has the market recovered over four months of losses, but it also pushed names like Microsoft MSFT to all-time highs. When the market moves in one direction aggressively, it typically continues until a significant level is reached. Fortunately for the bearish investors, the market has finally reached the level. Although none of the catalysts throughout this week (CPI, PPI Weekly Jobs, etc.) have been able to give bearish investors the upper hand. In fact, the Consumer Price Index (CPI) not only came in under expectations but also lower than the previous month, sending the markets even higher. 

There’s also no meaningful economic data reporting next week that could catalyze a pullback. While things look bleak for the bear case, there is one scheduled event next week that could send the markets plummeting. Nvidia NVDA reports earnings next after hours, and as a major contributor in the run-up, it could be the very reason bears get their pullback. Shortly after trapping bears in late October, when it broke its primary support level of $400.00, it quickly rallied to test its all-time high at $502.66. Regardless of current price action and complications with federal government restrictions on selling certain products to China. Analysts believe $NVDA will have a positive earnings report.

As the last line of defense for bears, for their sake, the analysts are wrong in their assessment, and for our traders out there, it is our opinion (not financial advice) to tread lightly until after NVDA earnings report. 

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