NVDA is the market

A good day for NVDA is a good day for "the market" but there's more to it. Using NVDA as a contrarian signal...

It's been an interesting summer and what I've taken from the last few months is this, there are only really two charts to watch:

‍

IWN (Russell 2000 EFT)

‍

and, get ready for it....

‍

NVDA

We have gotten to a point where NVDA IS the market, if the S&P or Nasdaq is up it's because NVDA is up. As boring as that sounds, and it's boring as drying paint, there are important things to pull from this data. For example, when was the last time the market was this concentrated? Over the past 100 years market concentration has always been a thing, most recent stocks that dominated the market concentration space were the likes of IBM, GE, ExxonMobile and so on.

So where do we go from here?

Here is a look at these charts with one day and 30 day performance:

‍

One day performance of IWM, SPY, QQQ and NVDA

Let's look at 30 day performance of those

Highly concentrated stocks of the past have mimicked global geopolitical powers, no one thinks they will lose importance but somehow they always do. Nvidia has a lot of momentum now and it's a great signal chart so while it's all the market cares about there are great ways of using it.

First off, a good day for NVDA (and therefore SPY, QQQ) is a bad day for IWM (Russell) and vice versa. So why not use these charts as contrarian indicators to one another? If you like small cap stocks you really need an overbought signal on NVDA before going after those with any real intention. The pulley system between the two is pretty lock step, it's rare to see IWM and NVDA rallying together. Earlier this year and certainly last year it was all about the 10Y yields, if the 10y was up the market was feeling the pain, this is very similar to the NVDA/IWM relationship.

‍

Stock market panic, what happens next?

Stock market panic, big selling, what comes next?

NVDA is the market

A good day for NVDA is a good day for "the market" but there's more to it. Using NVDA as a contrarian signal...

The Markets Are Screaming, Are you Listening?

Is the stock market waiting for more information or is the movement already underway? Let's examine...

Go Where They Ain't

How to find opportunity and surprising clarity in the stock market by simply thinking about things in a slightly different way. Listen to this discussion to see what I mean...

What Does This Mean?

Something is happening here, there's possibly a seismic shift in the works and we can be early on the train. Or, maybe it's just a blip on the radar. This feels big to me...

Union Hedge Fund Podcast Episode 1

Welcome to our first podcast! In this, our first episode, we tackle topics like election year trading, NVDA and where some of the best opportunities are in the stock market right now.