The ONLY Indicator You Need to Trade Nvidia (NVDA)

Corona Del Mar, CA

Howdy Friend!

Thursday's gap n crap was an epic reversal.

It's as if everyone turned on Ai all at once.

Steadfast bears like Ed Dowd said it would be really bad if Nvidia gaps up significantly and then closes in the red.

Is it?

Since we're evidence-based traders that don't just live in our head, let's see what happens after a big gap up that closes below the previous day.

Unfortunately, there were only a handful of occurrences since 1982.

So I relaxed the rules a bit to a 1/2 percent gap up. There were 35 samples. Here are the results:

Clearly there's a bullish bias over the next month.

I wouldn't trade this though. Not enough samples for statistical significance. It's not a trading strategy.

But I do find it interesting considering folks said it was a bad omen. As usual, they're wrong because they don't put in a few minutes of work. They create a story in their head about what the market will do next.

This comes as no surprise to me because many years ago, I did the research, and noted how price action completely changed in 1982.

That's when S&P 500 futures were introduced. The crazy leverage creates more mean reversion than trend.

Here's what happens when you buy a 20-day low and sell a 5-day high. From 1926-1982, it resulted terrible returns. Now the market tends to reverse after a “support” break.”

The old farts I still follow from the 90's never changed their tune. They're still drawing lines on charts. Still yapping about stuff they learned from Edwards and Macgee 50 years ago.

You know…a really amazing thing happened this year. After six years of R&D and millions spent…

…we finally figured out a way to not care about the markets.

It's very liberating.

We figured out exactly what kind of strategies work well together so bad days doesn't sync up.

It's called the Outlier Method.

And yes, it did a bunch of selling into Thursday's gap up.

At a later date, I'll talk more about the formula behind it (Hint: It's NOT Pearson's correlation), and why we ended up running 9600 tests across 400 stocks with a market cap greater than $10 billion. I'm scared to see our next compute bill. lol

For now, I just want to remind you that if someone isn't providing you statistical evidence…

…what they're telling you is useless for trading. It's just information overload.

P.S. Even the “funnymental” guys are completely useless as researchers. I keep hearing about how Nvidia inventories are rising and how Ai is one giant fraud. That's retarded.

Of course inventories are rising because sales are going through the roof! And much of what is counted as inventory is actually raw materials and unfinished chips.

Here's the ratio of inventory to revenue so you can compare apples to apples:

Make sure to follow me on X for more raw and unfiltered updates:

https://x.com/PortfolioBoss

Trade smart,

Dan “Prince of Proof” Murphy

Government required disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.

What happens after gap n crap days?

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