Nasdaq 100 Braces for Nvidia Earnings, Jackson Hole and Volatility

The next major test for the AI trade and Nasdaq 100 arrives after the close on Wednesday, as Nvidia (NVDA) reports fiscal Q2 earnings.

Wall Street expects another sharp increase in revenue, driven predominantly by demand from Nvidia’s data centre business. But with expectations already elevated, the reaction to guidance could matter more than the headline numbers themselves. Traders will pay particular attention to commentary around Blackwell, Rubin and AI infrastructure spending.

With Nvidia earnings historically producing a sharp rise in volatility, and Fed Chair Kevin Warsh due to speak at Jackson Hole on Friday, the Nasdaq 100 could be in for a lively end to the week.

 

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Nvidia Earnings and Jackson Hole Put Nasdaq 100 Volatility in Focus

Nvidia (NVD) Technical Analysis

While the longer-term charts show a clear uptrend for one of Wall Street’s favourite stocks, which threatens to break to new highs in due course, it has met some resistance in recent months.

A gravestone doji formed in June, and the subsequent selloff in July could mark the third candle of an evening star formation. If August closes around current levels, Nvidia is also on track to form a shooting star reversal beneath its all-time high. A bearish engulfing candle marks a lower high on the weekly chart, further underscoring the potential for a pullback over the coming weeks or months.

That said, Nvidia has fallen for seven consecutive days — its most bearish such sequence since March — which suggests a bounce could be incoming. Also note the slight bullish divergence on the daily RSI (2) in its oversold zone. A positive earnings report could provide the catalyst, although traders also need to factor in the Jackson Hole symposium, with Fed Chair Kevin Warsh speaking on Friday.

But with bearish clues on the weekly and higher timeframes, Nvidia may need to break above the August high, or even its record high, to dispel concerns of a deeper pullback.

Source: NASDAQ, TradingView

 

 

 

 

Nvidia Earnings Signal Higher Volatility, but Recent Returns Turn Bearish

Nvidia earnings have historically produced a sharp increase in volatility, with the average post-earnings daily range rising to around 6% and several sessions exceeding 10%. Average returns are also positive on the first full session after earnings, although the median is much lower, showing that a handful of outsized rallies have lifted the mean.

More recently, however, the pattern has turned bearish. Nvidia has fallen on the first full trading day after each of its past four earnings reports, despite the longer-term average showing a positive bias. That makes the current setup particularly interesting: history points to elevated volatility, but recent price action warns against assuming that another earnings beat will automatically translate into a higher share price.

Source: NASDAQ, LSEG

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Nasdaq 100 Futures (NQ) Technical Analysis

We cannot really talk about Nvidia without considering its impact on the Nasdaq, given their tight correlation. The two markets have a strong relationship, with positive correlations above 0.9 over the 10- and 290-day periods, although that relationship has been less stable in recent months, with the 60-day correlation dropping to 0.47.

Their weekly and daily charts also look strikingly similar, which makes the Nasdaq 100 another market to watch when assessing the broader Nvidia theme.

Source: LSEG

 

Nasdaq 100 Technical Analysis: Bulls Eye 30k, Bears Watch 28k

The daily chart of Nasdaq 100 futures shows the monthly pivot point at 28,721, which could provide potential support. The same bullish divergence is also present on the RSI (2) in the oversold zone. Prices are respecting the weekly S1 pivot for now, so perhaps a low has been seen, although the monthly pivot is also worth keeping in mind below.

A potential near-term upside target for bulls sits around the weekly pivot point and high-volume node (HVN) near 29,600, a break above which brings 30k into focus just beneath the weekly R1 pivot and prior swing highs.

But if bears are lurking — and I suspect they just might be — these resistance levels could also provide areas to fade into. If they get their way, the 28k area could come back into focus near a historical weekly VPOC.

Source: ICE, TradingView