We've Been Here Before

After an emotional post-NVIDIA earnings after hours session last evening we are seeing a broad market fade set in as we head into the New York lunch hour. While NVDA bulls are pointing towards bears' accusations of fraud as evidence per se of the pain trade being higher yet for AI, as I write this I see NVDA just flipped red, seen on the daily chart, below. 

The extreme enthusiasm from CEO Jensen Huang and his team on the conference call last night galvanized AI bulls. But we have been here before in history, despite how many are declaring AI to supersede the laws of gravity, human nature, and the long-term ebb and flow of markets. Simply put, just as it is always darkest before dawn at the end of a bear market, it is usually brightest before the sun burns out in a euphoric bull melt-up. 

In my nightly full market recap video for Members last evening I noted the $195.60 area (the highs from early-October) for NVDA would likely be the battleground today. And thus far bears seem to be prevailing. Also note if the $195.60 area holds as firm resistance now we have the makings of a bearish head and shoulders top, which I have highlighted in light blue. 

NVDA's numbers were great, but so were Cisco's twenty-five years ago as the dot-com bubble was popping. Then-Cisco CEO John Chambers is a plain vanilla understated executive compared to Jensen's showmanship and exuberance. But make no mistake: We have been here before and the ending is always the same.