NVDA Really Matters to Market Returns!
I can't believe it has been ONE MONTH since I posted here about the Nvidia saga.
Suffice it to say, my tweet above on August 24th got a few million views, a large number of interview requests, not to mention many direct messages in X with intel or offers of collaboration. I also spent a good deal of time going down the rabbit hole myself the weeks following - not to mention having to deal with a mass-media smear campaign (luckily not by name), but nonetheless being labeled by Bernstein via Morningstar AND Marketwatch a "twitter rando".
Let's just say I didn't back down. I doubled down.
Nobody Special 3-Part Video Series is Must Viewing
One interview I accepted was from Jack Gamble at @NobodySpecial. I resembled that designation handle having never been at the maelstrom of such a highly-public media conspiracy debate! I genuinely found his search for price discovery and protection of retail traders to be well-intentioned. He ended up doing a stellar 3-part series that will help to unpack, just a little, the concern in the question I raised:
"Is NVDA end demand real?"
Seriously, that was THE question I asked that received massive pushback - online and off. I was even attacked publicly by Martin Shkreli! The beat simply didn't smell right:
"And you thought $NVDA pulled forward demand on Biden’s new China policy…
CoreWeave takes out massive loan 3 wks ago => its total mkt cap to “buy”$NVDA H100 chips, collateralized by those same chips that happens to = NVDA’s data center beat
PE “asset-based” financing at its finest!"
August 24th, 8:22am
Now fast forward a month, and I am not only questioning if end demand is real, I'm asking investors to care about "the company Nvidia keeps: Coreweave, Magnetar, Novogratz, Tether and many of their shell companies.
Ironically I was talking with my Discord Community members just this Friday and mentioned I had no inkling Nvidia might be 'gaming' us until day after earnings Aug 24th when the hair stood up on the back of my neck and it hasn't gone down since.
Now, a whole month later: Nvidia reminds me of either:
the Valeant Scandal and/or
a giant crypto ponzi scheme: Bigger than SBF and FTX.
Institutional Investor Aligns.
Thank gawd I wasn't alone in my questioning of the AI hype bandwagon:
"The move from crypto to artificial intelligence has fueled the markets this year, but some are questioning how much of it is real." INSTITUTIONAL INVESTOR AUGUST 29TH
So many good takes - about AI growth getting pulled way early to questioning how it is used as a ponzi scheme:
“It turns out every scammer in America is trying to buy H100 chips right now so that they can say they own them... In 2021, scam companies put Bitcoin on their balance sheets — now the scams have shifted over to putting $40,000 H100s on the balance sheet.” Koppikar
IT TAKES A VILLAGE.
Our very own #graphcall-macro-education contributor found very strong transactional data to cast a very suspicious eye on CoreWeave.
“CoreWeave has a history of dumping GPUs on the market” and he shows how!
See his docutalk research connecting #Sysorex #CoreWeave
Then an anonymous blogger went all out and made his own expose on Nvidia (which later triggered yet another media smear campaign):
NVIDIA – THE RED FLAGS: No Smoke without a Fire
followed by:
NVIDIA – DON’T BELIEVE THE HYPE: This time is different...not.
Ironically, these publications were featured in a hit piece by InvestorPlace:
NVDA Stock Alert: Should You Believe the ‘Conspiracy Theories’ on Nvidia?
NVDA Stock Alert: Nvidia Addresses Coreweave Rumors at Citi Conference
Fast forward: InvestorPlace editor-in-chief just yesterday appeared in my email to ask me for an interview! Ha. I think not!!
Seriously, if you follow me closely on X, you know all of this unfolding drama. Luckily for members, I do not discuss any of this in my live trading room. Just the levels for my recommended short on NVDA of which stock price is down 20% on the underlying since my analysis went viral.
Pressing NVDA Short.
So far so good! From recommended Chase short day after earnings from $502 to $470 price target - all recorded live in my trading room and even featured on our YT channel - I still believed firmly that the market, and especially NVDA, were priced for perfection leading into their EPS.
I posted my NVDA roadmap under the #swing-ideas channel soon after when $468 was about to break giving it a $400 as price target before a likely strong bounce. So far it has touched $410. I am very confident it will see hourly gap fill of $395 very soon.
Even if my timing of when NVDA would tag $400 wasn't perfect (09.15.23), this advanced option play that I recommended (to those who know how to handle margin/defend against if wrong) was for October and it has worked extremely well:
COST: Roughly one nickel to SELL the OCT 500X550 call spread to BUY the OCT $400P.
CURRENTLY: UP 25,000% ROI
But there are many ways to play this explosive stock - in both directions against multiple timeframes! And given its importance to market sentiment AND returns, it's a really good proxy for risk.
And given Nvidia is the biggest stock winner in the past 10 years - up 10,000% with a CAGR of 60% per year - I will continue to press my thesis that at a minimum NVDA is Too-Good-To-Be-True, Priced for Perfection (with ties to Potential Ponzi), and to quote my favorite saying over the years when my 6th sense firmly takes hold: OUTLIERS REVERT WITH VELOCITY.
My bet: Nvidia will be no exception.
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