Last Stand Hill

More jubilation from the AI crowd after NVDA's earnings report last night is seeing the semiconductors ramp higher this morning. NVDA itself is printing new highs, and a play like SMCI is all too happy to join in. 

Both NVDA and SMH are screaming back higher, punching up through their respective upper daily chart Bollinger Bands, indicative of overbought conditions once again.

Without question, we are living through something epic in terms of the speculative mania and total disregard for risk.

That said, there is at least one silver lining for bears: The Nasdaq Composite and QQQ ETF (for the top 100 Nasdaq names by market weight) have not made new highs yet. Small caps are also lagging the rally in the IWM, as is TSLA.

However, I view the Nasdaq/QQQ divergence as much more meaningful to bears in the near-term to see if they can force the issue and render today's NVDA/chips move the final blow-off. If they are to do that, then today ought to be a kind of "Last Stand Hill."

Elsewhere, natural gas is coming in after a sharp rally yesterday from deeply oversold conditions. If UNG recaptures $16 anytime soon I like the long side for continued relief.