It’s not a good sign when they talk about an ‘everything rally’ | investingLive

The weird thing about trading is that one of the best indications you can get is from sentiment but it’s almost always better to go against it. So much of what you’re trying to do is gauge sentiment. When markets are complacent or fearful, it’s the best point to buy. When markets are euphoric, it’s better to sell.

Of course, often a few days or hours can make the difference so even if you get it right, it’s hard to execute.

That’s why a note like this one from JPM’s trading desk makes me worried, particularly on the day of Nvidia earnings.

“Given that there have not been any changes to the fundamental story, nor does our investment hypothesis rely on the Fed easing, we are dip-buyers. As we look at the two key events this week, (i) Sept’s NFP and (ii) NVDA earnings, when combined, this could set the stage for the next run to /through ATHS.”

Not only is that bold, it’s also odd. Nvidia earnings are a two-way risk and there are many examples of shares selling off the day after earnings, even in the incredible bull market in NVDA shares. Secondly, I can’t see what non-farm payrolls matters at all. It’s the report for September.

Buyer beware.