It's the Reaction

As Michael Burry notes above, a stock at the epicenter of a roaring bull market/melt-up (or, dare I say, bubble) can easily top out for no rhyme or reason well before earnings ever show the slowdown. 

While bulls may understandably quibble with this logic, the reality is that markets often overshoot and then ruthlessly correct. In the case of a marquee stock like NVIDIA, the leader of semis, AI, the Nasdaq, and even the broad market of equities as an asset class, that is all the more pronounced as they overshoot for extended periods of time and then abruptly correct out of nowhere, possible for an even longer extended period of time. 

NVDA is down 5% as I write this despite beating earnings last evening and galvanizing AI bulls to declare that the AI revolution is alive and well. While it is premature to declare last October's highs in NVDA as being the top, this reaction to earnings certainly smacks of different price action than what we have seen out of NVDA for years at this point. 

Beyond that, in part because of NVDA's inclusion in the Dow in late-2024, we have the makings of a monthly bearish shooting star reversal on the first monthly chart, below, at the upper Bollinger Band (indicative of overbought long-term conditions). Of course, the Pam Bondi contrarian signal earlier this month seems to also be working, with the Trump/Bondi 50,000 pump now at risk of marking a local top, if not more. 

On the second chart we have Wheat bull-flagging nicely on the daily at the key $21.90 breakout level. Relatively cheap wheat has keep food prices from becoming obscene. But if that changes you can be sure the consumer will become even more squeezed as this year rolls on.