NVDA | Earnings vs The Chart —Fundamentals vs Technical AnalysisGood morning, happy labor day for those in the US.
I guess most people reading this are in the US.
We have this situation, we have "the earnings" and "the chart."
This is the great fight that has been going on for decades when it comes to approaching the markets. What's the best approach to the market; using which tool.
➖ Fundamentals (FA) vs technical analysis (TA).
I am of the TA group but please read, this might make sense even to you.
➢ The chart (TA) is saying down while the earnings (FA) are saying up.
The reason why you see this and other stocks go up each time is because we are in a bull-market. You see the release of the CPI, the earnings and everything else and each time the stock valuation tend to rise. The stock is not rising because of positive news, company growth or favorable fundamentals, the stock is rising because we are in a bull-market. Everything has been rising for years. You can confirm this by looking around. We are in a fiat bubble bull-market but the bull-market is of course real.
Now, the bull-market doesn't last forever. There are periods when the sentiment changes and we enter a bear-market. When we are in a bear-market the stock valuations will drop regardless of the news. Short-term there can always be fluctuations and volatility when "the earnings" are released, but long-term the stock will follow the market trend.
If the CPI, the earnings and the rest are bearish or bullish this will be of no consequence to the stock. If we are in a bear-market it is going to drop.
That's why you can see bad CPI numbers yet valuations grow.
That's why you can see negative fundamentals and yet, everything grows.
The chart is saying down while the earnings are saying up.
Let's say we reached the end of the bull-market, therefore we are entering a bear-market. You can have good earnings, good CPI, cut rates and all the rest and yet prices drop.
The only way to know if we are in a bull or bear market is by looking at a chart.
Namaste.
