SGT Chart Book: AI and Nvidia Focused Week

sgt_chartbook

Nvidia mania gripped markets this week. Last week saw a record day with MAG7 stocks (Microsoft, Amazon, Nvidia, Apple, Tesla, Alphabet, Meta) adding over $500Billion in market cap, with Nvidia adding a record USD277 Billion in market cap, after reporting strong quarterly earnings.

Stock-market gains continue to be heavily concentrated among the so-called Magnificent Seven. That is prompting concern that indexes are vulnerable to the swings of just a handful of companies - and optimism that there is more room to run, depending on whom you ask.

The equity markets in US, Europe and Japan hit new all-time highs.

All three major U.S. equity indexes added gains of over 1% for the week, marking six weekly gains in the eight weeks of 2024 so far. The Dow rose above 39000 for the first time.

After solid gains in 2023 for US equities, we are getting more of the same in the first 2 months of 2024. The S& P 500 and Nasdaq are both up roughly 7% so far this year. Some investors are optimistic because the current rally appears to be driven by strong earnings reports, rather than expectations for interest-rate cuts.

Hope that the Federal Reserve might begin slashing interest rates as early as March helped drive stocks higher last fall. Fed officials have all but taken a March rate cut off the table. The “no need to rush” message was reinforced again this past week, both with the release of the minutes from the Fed’s last meeting and in statements from Fed officials.

Market participants will be closely watching the coming week’s release of the personal-consumption expenditures index, the Fed’s preferred gauge of inflation, for a look at price pressures and clues on the Fed’s path forward.

For now, the focus is on artificial intelligence. Analysts were widely bullish on the trend and stocks in general after Nvidia’s report helped confirm that there is huge demand from tech companies for AI chips.

Treasury yields ended the week, with the yield on 10year note falling to 4.258%.

USA30

New highs. Bearish divergences (Does anyone care?).

USA500

Same as above.

NVIDIA

A picture is worth a thousand words.

US10YEAR RATES

Pushing back up towards the broken trendline. Keep an eye out this week for data releases, for more clues.

EURUSD

Broke back above a short-term downtrend line. Bigger picture sideways trading.

XAUUSD

Hourly chart shows last week’s price action, starting last Sunday at the blue vertical line, XAU end the week with its best day in February.

XAGUSD

Range bound, looking for break out.

USOIL

Trading up toward the top end of recent ranges. Looking left we see a number of previous tops and close to the 200-day MA.

BTCUSD

Last week saw BTCUSD mostly sideways to down after recent gains. Is this a breather or S.T top?

ETHUSD

Short term overbought.

Happy trading,
SGT Trading Desk

trading@sgt.markets

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.

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