NVDA So Far So Good
NVDA is gapping higher on strong earnings, and the broader market is coming along for the ride. We are also seeing strong gaps higher in CRM, CRWD, OKTA, and VEEV, so tech is having a very strong post-earnings reaction across the board.
It is possible this is the momentum we have been waiting for to finally break us out of the sideways malaise and push QQQ and SPY back toward new all-time highs.
I have been bullish and buying in this recent dip over the last several days of sideways action, patiently waiting for this next push higher. As long as QQQ can hold the current gap above the range of the last five trading days, I think we should continue moving higher, with the unfilled gap at 729.27 as the next major target.
It is possible we reach that level this week or early next week, especially if Friday’s Jackson Hole Summit is favorable for equities.
QQQ Daily Chart
I have to admit that NVDA is the king of the gap and crap.
We really want to see follow-through tomorrow to eliminate the risk that this gap higher simply becomes exit liquidity for the bulls. A strong earnings reaction is great, but if buyers cannot maintain control once the market opens, this could quickly turn into another failed gap.
NVDA gapping above $215 is a good start, but the bulls need to show strength on Thursday and avoid completely giving back the move. If NVDA gaps up into $224 at the open, that will be an important resistance level to watch.
I will be watching the price action closely to determine where I want to take profits on my post-market trade that I featured in the Swing Trade Room. I bought NVDA at the 100-day SMA in the post-market session once price had stabilized, so now the focus is on managing the position and seeing whether the bulls can turn this gap into a sustained move higher.
NVDA Daily Chart
Jackson Hole Is the Next Big Test
In my opinion, Jackson Hole could be just as important as Nvidia’s earnings, if not more important.
Liquidity is critical for a raging bull market, particularly when it comes to growth stocks. We need to see that the Fed remains willing to support favorable liquidity conditions and is not preparing to tighten.
If we get a favorable message from Warsh on Friday, that could provide the additional fuel the market needs to finally break out of this extended sideways consolidation.
For now, the setup remains bullish. We have the catalyst, we have improving momentum, and we have a market that is already positioned near all-time highs. The key now is seeing whether buyers can maintain control and turn this breakout attempt into a sustained move higher into new all time highs.
SPY Daily Chart
SOXX and the AVGO Setup
SOXX is also trying hard to gap back above the 100-day SMA, which would be a bullish development for the semiconductor and AI trade.
Meanwhile, AVGO has been absolutely slaughtered over the last several days, nearing earnings with nine consecutive bearish candles. Interestingly, I can see AVGO potentially setting up similarly to what we saw with MSFT during its last earnings report.
AVGO is pushing into a new low following a massive decline that already took out previous lows. The fact that it is below the 200-day SMA and essentially below every major support level on my chart is not ideal. The one major level still standing is the Anchored VWAP from the 2025 low at $331.68.
If AVGO drops into that area, it would create some very interesting confluence with the gap from early March 2026. That would be a zone where I would be interested in looking for bullish action.
If that level fails, the next major area I am watching is the 100-week SMA around $295, which continues to creep higher.
I would actually love to see AVGO reach the 100-week SMA. From an Elliott Wave perspective, it would create a symmetrical correction where the A wave is approximately equal in length to the C wave, potentially signaling the end of a much larger corrective structure.
All in all, AVGO is a stock I want to keep a very close eye on. There could be opportunities for both short-term trades and longer-term positions if it reaches these key levels and gives us the right price action.
AVGO Daily Chart
