Finally found a viable edge this week to enter the market. Hope you the reader have been trading well.
The big news on the deck this week was NVDA 0.00%↑ earnings. NVIDIA the AI juggernaut holds approximately 80% of the global market share in GPU semiconductor chips and since we are moving towards a world of AI NVDA 0.00%↑ is a big deal.
They did not disappoint. Earnings blew estimates out of the water and the indices promptly shot up in the overnight hours - the NQ over 200 points. Those of you that traded the ON hours should’ve done well, I was tempted to, but I resisted breaking my personal rules. The ON hours are almost always a bad trading session for me because of the thin volume - mostly.
Once the market opened I was cautious of what the price action could be like. I am hesitant to take positions on massive gap up/down days postulating maybe all of the action has happened overnight but then again this is flawed logic. I don’t know what the market will do, all I need to do is execute my edge when it presents itself not relying on any predictive powers of my own.
Price formed my edge perfectly on the ES at 9.35 a.m. - orange bubble - but I did not take that trade as we had semi-important econ data 25 minutes later and I wanted to see how price would behave in the first 30 minutes.
S&P PMI flash and Existing Home Sales came in stronger than expected continuing the trend the US economy is humming and I immediately started to look for a long entry into the market. The ES continued to bounce off the ONH - overnight high for the next 45 minutes or so and when I realized the ONH was a strong enough support today I entered the NQ and let it run and hit a profit target of R2.25 for the day. The strong earnings from NVDA 0.00%↑ gave me confidence that we could continue to go higher today even after the massive run up overnight.
Some days the market gives you an easy trade - well, easier than most days. These are days when the breaking news is so obviously in one favor that the seasoned trader almost is certain it is going in that favored direction. Today was such a day because of the blowout earnings from NVIDIA. Although in the beginning I was still wary because of the massive gap up.
I have seen this happen so many times before, run up huge in the ON hours and then continue that rally as everyone gets into in the RTH - regular trading hours. But this kind of instinct only comes after years of seeing this kind of price action. Something to keep an eye out for and take notes on.
Light day for econ news tomorrow but let’s see what it brings.