(MENAFN- Daily Forex)

• Nvidia dipped to $180 on Friday before staging a sharp rebound, reclaiming $190 ahead of Wednesday's earnings.
• With broad passive ownership and high expectations, traders are cautious but continue to favor upside momentum over shorting.

NVIDIA dropped initially during the trading session on Friday to reach the $180 region before launching. At this point in time, we have to ask the question as to whether or not we are going to continue to the upside, but the bounce is something that needs to be paid close attention to.

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Keep in mind that we have earnings at the end of the session on Wednesday, and that, of course, will have a major influence on what happens next. But I also recognize that Nvidia is in the passive investing vehicles of almost anybody who has a retirement account or has money managed by somebody else. Interestingly, we are just now breaking above the $190 level, and it does look like this has been one heck of a turnaround.

NVDA Looked Poor Earlier in the Day

At one point, it looked like Nvidia was going to threaten a breakdown, but the markets in general rallied mainly right around the same time we got word that the United States and Switzerland reached a trade deal. I don't necessarily think that in itself it is that big of a deal. And in fact, I don't even know how much trade the United States and Switzerland do with each other. But what it does suggest is that there are still deals out there to be made. So, people will take something like that and extrapolate it to China, for example.

I don't know about that, but I do recognize that any good news does send the market higher. But I also would be somewhat cautious with Nvidia due to the fact that we have that earnings report on Wednesday, and it will cause a lot of chaos. The bar for Nvidia is extraordinarily high at almost every earnings call. So, we'll just have to wait and see how that plays out.

Regardless, I don't have any interest in shorting this market because it's held widely. It's almost impossible to get short of, and it's just simply almost like the index, it's just not designed to fall at least not in this scenario.

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