I don't know that I would call this a correction so much as a bubble popping. The "AI trade" I think might be toast. Yesterday Nvidia (NVDA) released their earnings and as I expected: it was impossible for them to succeed. What I did not expect was how much a late session NVDA sell-off would drag down the entire tech sector.

I focus entirely in the tech sector where things turned red across the board.

The "Magnificent 7" turned every index red while they were sliding, almost 8.5% of a drop from NVDA which is insane. In the past few weeks Meta has bucked the downturns of the other "Mag 7" but even Meta/Facebook could not avoid the avalanche today, as they fell almost 2%.

The rest of the markets are also getting rocked by policy uncertainty.

Late Wednesday, Trump said he was considering 25% tariffs on imports from the European Union, targeting cars and other goods. He also said much-heralded measures against Mexico and Canada were still coming. Then in a social-media post Thursday, the president reiterated tariffs on Canada and Mexico would start Tuesday, and said another 10% levy on China would begin the same day.

My morning strategy was profitable, identifying opportunity with Amazon calls and Snowflake puts, which worked out well until the worm turned on Nvidia.

After things turned for the entire sector, my positions simply could not win. It's frustrating and disappointing. I have intentionally picked up some more "service" tech positions recently like Amazon (AMZN), Datadog (DDOG), Snowflake (SNOW), Fastly (FSLY), Atlassian (TEAM), or others. The goal has been to diversify away from my exposure to the hardware/semiconductor space (AMD, ARM, NVDA, TSM, etc). In previous slips on the semiconductor space I have seen inflows to these other tech stocks, but today that was not the case.

I haven't checked the fixed income markets yet as I'm writing this, but I would not be surprised if was a lot of money moving into bonds, gold, currency, and the European market.

Update: I checked the forex markets and the dollar dropped quite a bit in contrast to the Euro

I don't have a strategy for tomorrow, I'm holding some of today's losers hoping for a bounce-back, but we'll see!

Log

• Snowflake (SNOW) had positive earnings which was ripe for a few put positions which paid off well.
• The ebbs and flows were more predictable, which was helpful.
• Afternoon slide causing concern, might pull defeat from the jaws of victory today.
• I think Nvidia (NVDA) profit taking led to some panic selling, their sliding is dragging the entire market down. Oof!
• The entire tech sector that I monitor is red.