August 26, 2026
Hey traders!
The market waited on NVDA — and went nowhere
This week, the market has been stagnant, and it appears to be going nowhere, waiting for Nvidia to report. For the last week, price action has been pretty sideways while the Nasdaq has waited for the next catalyst. The biggest question was whether NVDA would be the positive catalyst to send the Nasdaq higher. It has appeared that traders didn’t want to get aggressive in either direction until the numbers were out, just in case. At this point, it appears to me that, while NVDA beat EPS estimates, the report is unlikely to trigger a breakout to the upside given the muted move. Let’s break it down…
The Hot Zone: Before Earnings
This is the 2-year daily chart I used to analyze NVDA pre-earnings. NVDA came into tonight as a strong fundamental ticker, with 4/5 Five Star, 8/8 quarters in the history window, with the Hot Zone demonstrating a regular move of over 5% during the pre-earnings momentum time frame. The 21-day Earnings Hot Zone average was +7.4%, or about +$15.74. In other words, this stock tends to rally over the three weeks leading up to earnings. But, even though the ticker normally rallies going into earnings, the post-earnings moves haven’t been consistently bullish.
In fact, the post-earnings moves have been bearish on average over the last 2 years. Do you see the post-earnings momentum average on the chart? It’s -5.1%, or about -$10.91. Additionally, the post-earnings gaps aren’t positive, with the Hot Zone showing that the gaps over the last 8 quarters have been 4 up and 4 down, with the most recent gaps being 3/4 to the downside. This demonstrates the fact that the news has been priced in. The last few gaps were not the old monster green ones. They were small red gaps: -0.4%, -0.7%, -0.5%
Earlier in this bull run, we were getting those beautiful +2.4%, +2.8%, +5.5%, +5.1% gaps. That regime changed. The last several prints have been “beat the number, sell the stock.”
I quantify the post-earnings move by comparing the expected move in the options market with the actual move.
The expected move this quarter was:
- 1x = $12.21
- 1.5x = $18.31
- 2x = $24.41
So the options market was pricing a little over $12 as the standard swing. Anything inside that band is not a shock. It is the range the market already paid for. As of now, the stock is almost completely flat after the report.
The Post-Earnings Move: Priced In
Numbers are out. NVDA beat. $2.22 vs the $2.09 estimate, revenue $96.2B vs the roughly $92B Street number, and they guided Q3 to $108B ±2%. That is a strong print on paper. But the stock sold off anyway. On the 20-day / 1-hour chart, NVDA closed regular hours at $209.66, then after hours tagged a high near $211.50 and flushed to a low of $203.50, last around $205.34. That is about -2% from the close and -3% at the wick. Squeeze rolled over. Momentum flipped red. That is not a 1.5x or 2x event. It is a fraction of the $12.21 expected move, and the move reversed, returning to the closing price that day. At this point, it’s up about $8 post-report, which is still in the expected range. Things can still change overnight and into tomorrow, but as of right now, this is essentially a “nothing burger!”
This is exactly what “priced in” looks like. I said this on Fox Business and on my Schwab segments: the actual numbers and then the post-earnings move are two different beasts. Companies can report strong beats, and still sell off if expectations are too high. In the case of NVDA, there were far too many outstanding calls, demonstrating that the market was a bit too bullish. That could change *if* NVDA gaps up by more than $13 tomorrow, but preferably, more than $20, to demonstrate an actual strong, bullish reaction.
Does that mean the AI story is broken? No. It means that the market wanted even better blowout numbers, and the explosive moves in this stock may be a thing of the past. I still own NVDA, and I’m not selling it, but it appears the days of massive pre- and post-earnings moves are behind us.
If this follows the Hot Zone playbook, the 8-day post-earnings window still points toward that -$10.91 / -5.1% average, which, from the $209.66 close, keeps $198–$200 as the most critical support zone. This overlaps with the 200 SMA at $195, which needs to hold for NVDA to remain in a bullish trend. As we enter September with a lack of catalysts, hedging using the QQQs will likely be my next play, but I want to see how the market opens up and reacts tomorrow morning.
See you in the room,
Danielle
