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NVDA Update: On the subject of the elephant in the room, the reaction to NVDA Earnings certainly is casting a huge shadow on the markets into tomorrow evening's report.From what I have been reading, for Jensen Huang and NVDA to clear the obligatory very high bar for Earnings, the company will have to excite investors with improvements in the forthcoming Rubin server rack that entail more compute, more efficient energy usage, and enhanced cooling ability embedded within each Rubin chip.
Micron has put investors in an uncomfortable position. The stock is trading near the richest price-to-sales ratio in its public history, and the forward cash flow estimates make it look inexpensive at the same time. Both statements are supported by the data. Neither one cancels the other.That is the setup worth thinking through before the next move decides it for you. The Sentiment Extreme Is RealMicron's price-to-sales ratio sits at 11.98. For context on what that means, the ratio spent most of the last twenty-five years between 1 and 3. The 2002 spike reached roughly 9.
In Case You Missed It…Volume remains on the low side. Despite a 145-point trading range over the past week, SPX closed little changed, forming a doji/indecision candle on the weekly chart.SPX tested the prior June highs from above on Tuesday, Sept. 1st (circled on the chart below), and as of Friday’s close it remains in a sideways trend above its June highs. Note that we also came close to testing the 50 day ema (pink line), which has been rising while SPX marched sideways.
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