NVIDIA DOJ Investigation Shakes the Market: Key Levels to Watch and Trading Strategies

Today’s market was dominated by the news of NVIDIA facing a DOJ investigation, sending shockwaves through the entire semiconductor sector. This surprise news led to the SOXX Index experiencing its largest drop since March 2020, creating a domino effect that hit major tech stocks hard. In this blog post, we’ll break down what happened, the potential implications, and how traders can navigate the current market environment.

NVIDIA and the DOJ Investigation

The DOJ’s investigation into NVIDIA caught many by surprise, causing a rapid sell-off that spread throughout the market. While these types of probes are not uncommon for large companies, they often trigger knee-jerk reactions, leading to significant volatility. Long-term, this may turn out to be a “nothing burger,” but in the short term, traders need to be prepared for increased market turbulence.

Market Impact and Key Levels

• The SOXX Index dropped 8%, marking its worst decline since the pandemic-induced crash of 2020.
• Key tech stocks like NVIDIA, AMD, and Qualcomm saw significant selling pressure, with many breaking below critical support levels.
• The QQQ dropped twice its average true range (ATR), highlighting the severity of today’s selling pressure.

What to Watch For Tomorrow

To determine if today’s action was a one-off event or the start of a larger trend, keep an eye on how key stocks and indices react around their critical levels. A relief bounce back into previous ranges could indicate that the market is shrugging off today’s news, but further downside would suggest deeper issues.

Game Plan for Traders

• Focus on Key Levels: Watch for a remount back into previous support levels. If these levels hold, today could be a fugazi event.
• Be Ready to Short: If major stocks like NVIDIA fail to bounce, look for opportunities to short as they test new lows.
• Watch for Relief Rallies: Relief bounces can provide quick trading opportunities but be cautious of potential fake outs.

Conclusion

The market’s rapid shift from breakout to breakdown has put traders on high alert. Stay nimble, focus on key technical levels, and be ready to adapt as more information about the NVIDIA investigation unfolds. For those looking to refine their trading skills and strategies, don’t miss our Labor Day Sale for exclusive deals on our training programs.

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Watch the full video here for an in-depth breakdown of today’s market action and the game plan for tomorrow.

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