All Eyes On Nvidia:
Earnings season for the most part is behind us, but a blockbuster on Wednesday after the CLOSE from NVDA has investors on edge. The last time it REPORTED it had a massive impact on the SMH as seen below on the daily chart on 5/25. The WEEKLY chart of the SMH recorded a nice cup base breakout, however, it fell apart rapidly, often an ominous scenario. The best breakouts tend to work right away and act well POST the breakout too, so this is just the opposite of what bulls want to see. Of course, NVDA can change things quickly. The daily chart of the SMH below has the look of a bearish rounded top pattern, and it has advanced just 4 sessions in all of August thus far. At the top of the pattern, there was a bearish engulfing candle on 7/19, then a doji and 2 spinning top candles between 7/28-8/1 that suggested its long run was tiring. NVDA itself found a mild bounce at the very round 400 number and recorded a bullish engulfing candle on 8/14 and a bullish hammer on Friday. There is no need to be a hero and it is best to wait until after the report which should dictate the move until the end of September when the bearish seasonality concludes.