The chips stocks all look threatened to a certain extent, as the jobs number has caused a lot of selling pressure. At this point, the markets are going to have to stabilize before we get a move to the upside.
The Nvidia market has gapped lower and really fell apart, as about an hour into the session we are down three and a half percent. This isn’t actually a Nvidia problem. This is more a general reaction to the jobs number being horrible. So, with that being said, I think we have a situation where there are plenty of buyers underneath and I’m just waiting for some type of bounce that forms a V on a short term chart, and I’ll buy that bounce. I do believe Nvidia continues to go higher, but it may have been a little frothy. It may have been a little overdone and that’s fine. $165 would be a great place, I think, to see a bounce, followed by the 50 day EMA.
Intel looks like it’s racing to the bottom of the same range it’s been in for what seems like a lifetime. And therefore, I think it’s worth thinking about trying to find a bounce that we can take advantage of. It will be interesting to see how this plays out, but I think you’ve got a situation where value hunters might come back in.
After all, we’ve been stuck in this range for a year. And if we break down below the $17.80 level, then things have changed. But right now, I think you’ve got a situation where, despite the bad earnings, there is a major technical floor in this market. And although Intel is not the leader, chips are definitely going to lead the way over the next several years.
AMD also has gapped lower, and it looks like it’s going to drop pretty significantly. But we have earnings on Tuesday, so that could change everything. Remember the market’s got a very short memory. The jobs number may start have people look into the idea of looser monetary policy. We’re already seeing that in the Fed funds rate. That’ll be good for tech companies. So, we’ll have to wait and see. I think if you’re patient, you will get a buying opportunity, but it might not be until next week. We’ll just have to wait and see.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.