Chip Stocks Sag, But Will They Weigh on the Indices?

NVDA & AMD are under early pressure today

Technical Edge 

• NYSE Breadth: 79% Upside Volume

• Advance/Decline: 74% Advance

• VIX: ~$13.75

  • Traded a recent low of $12.73. That’s the lowest it’s traded since pre-pandemic in early 2020 (i.e. with stocks at ATHs)

Let’s see how the market absorbs the news about Nvidia and AMD (and other AI chip stocks) as the Biden Administration weighs AI chip sales to China. The news is weighing on the group, which by itself isn’t a big deal. 

However, NVDA & Co. have been a major catalyst for the market. So if these names start to unravel a bit — and keep in mind, Market Caps Matter and Nvidia is sitting at the $1 trillion mark — we could see further weakness this week. 

Also keep yesterday’s MSFT and TSLA setups in mind. 

S&P 500 — ES 

• Pivot: 4400

• Upside Levels: 4420-4430, 4445-4450, 4467-70

• Downside levels: ~4370, 4345-50

SPX