NVDA's earnings report created the necessity for a market balancing act to take place over the next several days. That balancing act has everything to do with the fact that AI might just be in the middle of its 1st inning of growth, with Wall Street slowly but surely catching onto this fact, while the markets continue to struggle against some hefty overhead resistance in the NDX.
Additionally, the specter of higher rates lurking in the background is creating an environment that is rife for excess volatility.
The issue is that when coming against monster resistance at 18100-18200 on the NDX, the last thing you want to see is excess volatility. NVDA, interest rates and the inevitability of instability created as a result of focusing on economic data during the weeks ahead only exacerbates this.
There is going to be a lot of excitement during the days ahead as the markets will likely continue to march forward. However, there remains a case to be made for watching your risk now more than any other time thus far this year.
Let's see how the markets deals with key resistance during the days ahead.
This will tell us everything we need to know about the adjustments to make during the coming weeks.
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