BY ANDREW GIOVINAZZI
May 21, 2024
Yo Pit Crazies,
That was an actual statement from one of my students on Monday, why is everything an event?
The Fed
Inflation Reports
Earnings
Jobs Numbers
It seems like the last year the market has been waiting for news and then propels itself in one way or the other. A collection of events wrapped around news. I think trading has been like that since Beranke and 2010 when the Fed got over involved in trying to restart the economy post GFC 2008.
The Fed is simply too large relative to the economy and has an outsize influence. The same with government spending at this point. Too much of a good thing becomes a bad thing. They move markets big time. The question next is, “can one stock move the market?” Below is a chart of Apple Inc (Ticker: AAPL) post earnings.
3 month AAPL chart with 1 day candles
Can one stock move the whole market?
Let’s take a look.
Nvidia Corp (Ticker: NVDA) will move the market
10 years ago when AAPL was in hyper growth phase, it could pull the market out of the doldrums. Those rallies proved to be very correct. These days NVDA is the mover and shaker but AAPL can still bring it.
The Invesco QQQ Trust (Ticker: QQQ) rallied 20 points in 4 days post AAPL earnings. That was mostly on a big stock buyback and AAPL just keeping revenue stable but not growing.
NVDA and AI are the future. Those stocks have shown a propensity to moonshot on good news. The even of May 22, 2024 NVDA reports. I expect similar action to follow. Now if NVDA stubs its toe, we could see a 20-30 point dump in QQQ.
To Your Trading Success,
-AG
Andrew Giovinazzi
30-Year Trading Pro
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