Nvidia's AI rally continues as Trump's Powell move stirs markets
By : Sandhya
This article is about the big picture, not an individual stock. The chart of NVDA stock is being used to illustrate the point.
The chart shows NVDA stock broke out above zone 1. Zone 1 was previously resistance and is now support.
The chart shows on April 9 we gave a signal to buy NVDA stock naming NVDA one of the top stocks to buy on the dip. On April 9, NVDA stock traded in the range of $97.53 - $115.10.
Yesterday, NVDA stock made a new high. NVDA is trading at $156.80 as of this writing in the premarket. At its low after Liberation Day, NVDA stock fell to $86.62. The consensus in the market at that time was the AI trade was over. However, we remained steady fast in our conviction that the AI trade had a long way to go. As full disclosure, we gave signals initiating several trade-around positions, including one on NVDA as shown on the chart. Trade around positioning is a technique billionaires and hedge funds use to dramatically increase returns while reducing risks.
NVDA stock breaking to a new high shows that our call that money is to be made in AI all the way to 2030 is proving spot on.
The sentiment on Wall Street is already extremely bullish. You would think it is difficult to add more bullishness to extreme bullishness, but that is exactly what President Trump has accomplished. President Trump's actions aim to take away the Federal Reserve's independence sooner than expected. Here are the key points:
Powell's term expires in 11 months.
Traditionally, the president announces the pick for the new Fed chair three to four months ahead of time.
President Trump is planning to announce his pick as early as this summer or early fall.
The belief is that by announcing his pick so early, President Trump will make Powell miserable enough that Powell will do whatever President Trump wants.
Momo gurus are cheering that President Trump will take away the Fed's independence and the new Fed chair will be President Trump's puppet.
A puppet Fed chair will dramatically cut interest rates, running up the stock market much higher in the short to medium term.
As the momo crowd celebrates, prudent investors should make money from the short to medium term moves in the stock market but be very concerned for the long term if the Fed loses its independence.