Weekend Market Report
All indices I track (Dow, Nasdaq, Russell 2000, and S&P500) closed higher this week. That’s not to say there were bumps along the way as investors eagerly awaited Nvidia’s earnings. Nvidia’s earnings came in higher than expected, but for some reason, shares sold off. Has AI peaked or is this just a case of “catching our breath?”
In this week’s short Labor Day issue 📨 :
- Nvidia’s Technical Analysis - 1 Week Later
- My NVDA and SNOW Call Option Fiasco
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Nvidia’s Technical Analysis - 1 Week Later
Nvidia (NVDA) came out with earnings this week and were to the upside. That should be good news for the share price, right? No, instead traders and investors decided to sell.
That reminds me of what I said about Nvidia in last week’s market report.
“The price action doesn’t bode well for NVDA and it needs to close higher in the days before earnings or we’ll have a post-earnings selloff.”
It exactly did that. Nvidia never closed higher than the magic technical analysis line (see below). Although earnings were great and better than expected, it wasn’t enough to keep the hype going. Traders and investors did what they normally do, they sold the news.
What’s NVDA going to do now? Who the hell knows? It isn’t making all-time highs and having trouble breaking that upper channel line. Even after a good earnings beat it appears to be heading lower for the time being.
My Nvda And Snow Call Option Fiasco
There’s one more quote from last week’s market report that I want to highlight about NVDA:
“The reality is that we don’t know what’ll happen but what I will do is make sure to follow my rules. I will close out my call options right before the market closes on the day before NVDA posts earnings.”
Welcome to a review of my dumbass mistake(s). Did I close out my NVDA call on the day of earnings? Nope. Why? Because I got high on hopeium. I would’ve made a profit closing them the day of earnings but I didn’t because I thought the price action would turn higher after good earnings.
That was the usual pattern for NVDA but this time, it didn’t happen.
So what happened instead?
A selloff started the next day and I obliterated my positive option winning a balance of $1,300. I turned my option’s account into a loss of $3,600 for the year. How did I do that? Mostly because of my NVDA trade but also because I held SNOW calls through their earnings the week before.
I broke my rules with SNOW too by not closing my option positions on the day of earnings. I would’ve made money on SNOW too if I followed rules.
The moral of the story, stick to your rules you assbag! Sell on the day of earnings!
Now, back to selling premium…