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  • As NVDA Goes Up Again This Actually Looks Like A Good Spot To Buy Gold

As NVDA Goes Up Again This Actually Looks Like A Good Spot To Buy Gold

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On Wednesday, NVDA had another up day rallying another 5%, ahead of its coming stock split. It’s all they are talking about on TV and if you want to hear about it all you have to do is turn on CNBC and wait a few minutes and a fund manager will come on telling you it is going to go higher. I was telling people I turned bullish on the stock market back in January of 2023 and thought NVDA would be the new market leader.

I have nothing to tell you about it that they won’t and buying it now means chasing something going up parabolic, which is something I never do or tell others to do. That doesn’t mean it won’t go up more, but I believe in buying and investing with a real strategy and not just buying something, because someone has posted a meme about it or that they are predicting it will keep going up on TV. Maybe it will, but I only care to get involved if it matches my own strategies.

Today, I see a better buying entry point today in gold!

Gold had a dip last week and has really been going sideways now for about six weeks. It’s oversold, in terms of its daily stochastics, now below 20, which now gives it a good entry point on the charts. One could buy the GLD ETF, and put a stop loss on it on yesterday lows, or right below the month of May, and have a good entry point.

It’s trading near it’s 50-day moving average.

In terms of the price per ounce, that May low is right around $2300 and it closed yesterday around $2350.

Really, gold has not dropped at all off of its highs.

It’s held strong - and yes I continue to hold my gold and silver and have not sold any during this recent dip when gold made all-time highs last week.

People trading are more and more speculating and more of them are trying to day trade than ever before. As I wrote the other week, there are now more options being traded than shares of stocks. According to a WSJ article this morning, “Nineteen out of 20 of the most actively traded options tied to Nvidia that traded on Wednesday expire by the end of this week, Cboe Global Markets data show. That is a sign traders are placing short-term wagers on the stock's next move.”

What is more, “Options activity tied to Nvidia has been through the roof. On Tuesday, around $283 billion worth of Nvidia options traded, compared with $18.7 billion for Apple, according to David Boole at BayCrest Partners.”

I prefer to buy something I don’t have to worry about selling and can hold for at least the rest of this year. If you sell something 12 months later you can pay long-term capital gains, plus it’s just easier in the long run. That’s why I rarely buy options. Plus 90% of them expire worthless.

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I've taken a trip back to when I first started to trade in the markets, going back and reading the very first books that I read when I first started.  I am going back to when I began and this journey is going to happen on this email list.

Much of my thinking in markets formed from my reading of the Jesse Livermore novel, Stan Weinstein's book, and interestingly I realize, from a collection of trader interviews in the Market Wizard's book by Jack Schwager.

In one interview, in that book, the trader Ed Seykota makes this remark:

"Win or lose, everybody gets what they want out of the markets.  Some people seem to like to lose so they win by losing money."

In the 2000's, I knew several people personally that got into the markets like I did and became winning traders.  A few I helped, but in the end they were the ones that did it for themselves.

In 2020, I knew a bunch of younger people that got into the markets for the first time, many via the Robinhood app.  I tried to help a few of them, but every single one of them failed and not a single one of them is trading today.  I'm talking about over two dozen of them. 

They did not want to lose money, but there was a huge difference between the people new to the markets in the 2000's and the people new to them after 2020.

The first group of people saw trading as something they needed to learn to be good at, and realized that they didn't know much about it when they started.  So, they read books.  They read the Weinstein book among others.  They watched market action, they studied charts, they lost and they learned from losing and won.

The second group, though, simply watched Youtube videos and looked at social media.  They didn't see trading as a skill, but more like a get rich quick scheme, as that is what the memes and gurus promised them.  I told them to read a few books, but none of them read a single book. Not one! One said that if he bet and lost it didn't matter, because he had to gamble to win enough money to make life worth living and he didn't have the money yet so he had to gamble.

It was the first statement in person I ever heard of someone express of pure financial nihilism - and the mood of so many people today is one of overall passive nihilism.

And most of the gurus and Youtube people, the Cathie Woods of the world and the crypto slime - they crafted messages to appeal to that mentality.  The algos deliver it as that is the dominant mode of thinking among the masses in the market now, as it is the mood of an entire generation. They programmed them and then created a circular feedback loop in the algos.

When James Altucher ran ads with his eyes as crypto coins he appealed to these people and the gurus told them this was the way to go.

Of course, it wasn't, and millions of Robinhood traders lost their money and wiped out in 2022.

They didn't get what they wanted.

But in a way they did.

They didn't want to put the work in to be a winner, so they went for the only other alternative - wild gambling - and gurus like Cathie Wood - or ones mimicking her phrases - became their avatar and continue to dominate Youtube.

When I started, and those I knew in the 2000’s started out, we all read magazines, newspapers, or books at one time or another.

We started before Facebook, Twitter, and social media even were created.

The memes treat trading like gambling and promise easy winnings.

They tell the people the game is easy and they want to believe it.

You can't just pick up a baseball bat and expect to play MLB without any training or work at all, and few that try can make it to that level.

The only way people who lost in 2022 can win at trading, if they decide to try again, may be to get off the internet and the apps completely for a period of time and focus and reinvent themselves.

Watching videos about trading IS NOT ENOUGH.

They have to turn all that off and read books.

And the answer is not to try to gamble in options now or meme stocks again, because “Roaring Kitty” is back.:

If you are someone who got into trading in 2020 and lost it's ok.

Don't get mad at this email

Just get to work, read the books, and I’m going to mention three to start with tomorrow.

Seykota also said this:

"Systems don't need to be changed.  The trick is for a trader to develop a system with which he is compatible."

This is the real reason I am going back to these books.

Refining things.... because I am more excited now about the markets than I have been in years, with what looks like the start of new big bull markets in precious metals and commodities, and a coming cycle shift in the stock market at some point, probably next year.

If you haven’t done so yet upgrade your subscribe and level up your trading:


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