The Magnificent 7 Sell-off and What It Means Ahead of Earnings

by | Oct 24, 2024

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Wednesday’s market action gave us a heavy tech sell-off — but it’s exactly the kind of setup I’ve been waiting for. 

Names like Nvidia (NVDA), Apple (AAPL) and Tesla (TSLA) all took big hits — before Tesla reported earnings! — but that doesn’t mean it’s time to panic. In fact, it’s an opportunity to position ourselves smartly ahead of their earnings next week.

Tech stocks, especially the mega-cap giants — Nvidia, Apple, Tesla and others — have been leading the market for a while. But with rising Treasury yields putting pressure on growth stocks, we’ve seen a notable pullback. 

This is important because it gives us a chance to assess how much of this sell-off is truly warranted, and how much is just the market overreacting to rising rates.

Now, when we look at Nvidia, for example, we’ve had one of the most aggressive runs we’ve ever seen. The stock’s performance this year has been fueled by AI hype, but remember…

Hype alone doesn’t sustain stocks long term. 

Earnings expectations for Nvidia have been through the roof, but the company’s growth is starting to slow down. That’s why this pullback is significant. It’s a chance to see if the market has set realistic expectations, or if we’re in for another leg down.

Apple (AAPL) tells a similar story. 

This is a stock that’s benefited from broader market strength, but rising yields are taking a bite out of its momentum. Apple’s earnings next week will be a critical point — I’m watching the $200 level closely. 

If we get there, I’m looking at a potential bull call spread setup. 

And Tesla, wow… What a move!

I’ll probably go more into detail in my Tesla spread trade at 3 p.m. ET today during “Final Hour”!

The key takeaway from all this? 

The tech sell-off isn’t a signal to run for the hills — it’s a signal to prepare. We’ve got earnings next week for these mega-caps, and if you’ve been waiting for a pullback to position yourself for some potential upside, this could be the moment.

For now, I’m keeping an eye on the charts, watching for key levels to hold — and, as always, managing my positions with smart risk control. There’s opportunity here if you’re ready to act.

I’ll see you in the markets. 

Chris Pulver
Chris Pulver Trading

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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

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