Nvidia’s Impact on the Stock Market and What to Watch For
Nvidia (NASDAQ: NVDA) played a significant role in yesterday’s stock market uptick, accounting for nearly 70% of the day’s gains in the Bloomberg 500. As the market eagerly awaits the AI giant’s earnings report after the close, there are a few key aspects to keep an eye on.
Unusual Trends Before the Report
– Options volume, particularly call volume, has been lower than usual over the last two trading sessions, a surprising occurrence on the eve of an earnings report.
– Implied volatility levels heading into tomorrow’s earnings results appear notably lower compared to previous reports.
– The stock surged nearly 5% today on average volumes and below-normal call volume, indicating a departure from typical earnings result trends.
Significance of Gamma Values
– Notional gamma values at the $150 strike are double what they were during the last report in August at the $130 strike, suggesting $150 may act as a significant level of resistance.
– The accumulation of gamma at this level could prompt call holders to sell their shares if prices fail to surpass $150 following the results.
Market Impact and Potential Scenarios
– Nvidia’s influence on the market is well-documented, with the potential to lead the broader market higher if it exceeds expectations.
– Conversely, if Nvidia disappoints, it could pose challenges for the overall market.
– Interest in the stock appears subdued currently, making it challenging for the stock to advance without significant surprises.
Key Metrics to Watch
– The 1D, a barometer of market nervousness, surged to 21.4 in Nvidia’s last report in August and closed at 11.6 yesterday.
– This level could indicate how the market is feeling heading into the earnings results and the potential IV crush in the S&P 500 that may follow.
Final Thoughts
– Nvidia’s upcoming earnings report is highly anticipated, with the market already factoring in positive expectations based on previous guidance.
– The stock’s performance following the results could have broader implications for the market as a whole.
In conclusion, Nvidia’s earnings report is a key event to watch, with potential implications for both the stock itself and the broader market. Stay tuned for updates on how Nvidia’s performance could shape market sentiment moving forward.