“Read books. Care about things. Get excited. Try not to be too down on yourself. Enjoy the ever present game of knowing.” – Hank Green
Here we go, once again, talking about post-earnings follow-through on a tech name earnings miss and lowered guidance (NVDA). As we have repeatedly said since NFLX broke back in July; we have seen as good as it gets in this cycle and the market will have to reprice. As ludicrous as it may have seemed to newer participants, we discussed the fact that we expected most of these names to give back up to 50% of their price… nothing new if you are a student of markets and price history.
We would like to remind readers that we expect a lot of volatility and continued two-sided action into year-end and well into 2019. We are at key inflection points across the board with a lot of overlapping dynamics in play > equity repricing, rates, usd, cnh, crude, etc… As always, it is important to try and take advantage of the opportunities that the markets are presenting but it is also important to understand the nature of the current context and to adapt to the new environment. One can’t simply trade it as if we were still in the low vol equity grind higher regime. Furthermore, don’t forget that we are likely going to continue to get the usual fake tape-bombs, especially if markets continue to trade heavy… again, these tactics usually end in tears.
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