Yellow Light Ahead of Nvidia Earnings

Goldman Sachs' Peter Callahan warns of a 'yellow light' for tech as semiconductors reach dot-com era levels of extension ahead of critical Nvidia earnings. Despite strong AI fundamentals, poor market breadth and extreme technicals suggest tactical caution.

Key Takeaways

• 1.The AI and Semiconductor trade is facing tactical 'yellow light' conditions due to demanding technicals and overbought signals despite intact fundamentals.
• 2.Market breadth is notably poor, with only 52% of S&P 500 constituents up on the year as investors concentrate in large-cap AI stocks.
• 3.Semiconductors are currently 60% above their 200-day moving average, a level of extension not seen since the dot-com era (1999/2000).

Table of Contents

• Bad breadth
• Sentiment
• Semis
• Tactical Micro
• Internet
• The Big Kahuna: NVDA earnings

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