I. Market Overview: Tech Rout, Cautious Sentiment but No Panic
On Tuesday, August 19, following a quiet consolidation session, all three major U.S. indices closed lower, with technology stocks taking the hardest hit. Semiconductor and software names led the declines, dragging the Nasdaq-100 toward its 30-day moving average. Investor sentiment turned cautious.
Key Data and Index Performance
- Nasdaq -1.5%, S&P 500 and Dow both down.
- Nasdaq-100 has surged 45% since its April low, creating mounting profit-taking pressure.
- VIX rose only 3.87%, a mild uptick that suggests no panic selling; traders hedged risks through protective put options.
Fund Flows
Some investors exited positions ahead of Thursday (Aug. 22), reflecting fears that Powell’s upcoming remarks could mark a “sell-the-news” moment.
Core Tensions: Policy vs. Valuation
- Powell’s Uncertainty: His remarks at Friday’s Jackson Hole symposium on the prospect of a 50 bps cut in September will set the market tone. A lack of dovish signals—combined with a potentially “priced-in” Nvidia earnings report—could spark a pullback.
- Valuation Risks: After a 45% rally since April, parts of the Nasdaq-100 are trading at extreme multiples (e.g., Palantir P/E at 214x). Profit-taking momentum is growing.
Institutional Strategy Divergence
- JPMorgan: Short Russell 2000 vs. Long QQQ—betting on rotation from tech into small caps.
- Others: Disagree, seeing potential broadening into laggard sectors. Some recommend structured put spreads on QQQ (buying Oct $570 puts and selling two $515 puts), with $515 as key long-term support.
Retail Takeaway
Cutting exposure remains the simplest hedge; complex option strategies are not suitable for most investors.
II. Stock Highlights: Tech Meltdown, Intense Bull-Bear Battles
1.Home Depot (HD): Missed Earnings but Shares Rebounded on Housing Data
- Earnings: Q2 revenue $45.28B (+4.8% YoY), EPS $4.68 (slightly below consensus), same-store sales +1% (missed 1.4% est.). Weakness driven by high rates delaying big-ticket projects.
- Positives: Improving sales trend, reaffirmed full-year guidance (total sales +2.8%, comps +1%). U.S. July housing starts hit a 5-month high, fueling optimism for demand recovery.
- Stock Reaction: Initially fell but reversed higher after management’s reassurance and supportive housing data.
- Outlook: Rate cuts could reignite home improvement demand and push the stock to new highs.
2.Intel (INTC): SoftBank Investment + U.S. Subsidy Shift, Stock Spikes Then Fades
- Catalyst: SoftBank to invest $2B in Intel (AI chip partnership). U.S. Commerce Dept. to grant CHIPS Act subsidy in the form of equity (non-voting).
- Price Action: Shares jumped >11% intraday but met heavy selling pressure near $26, closing with a long upper shadow. Stock remains trapped in year-long range.
- Key Variable: Needs fresh orders or breakthroughs to decisively clear $26 resistance.
3.Palantir (PLTR): Short Report Sparks 17.5% 5-Day Slide
- Catalyst: Citron called the stock “massively overvalued” at 214x forward P/E (10x broader market), suggesting fair value at $40.
- Reaction: Shares plunged >9% and extended a 5-day, -17.5% decline.
- Outlook: Short-term rebound possible at 50-day MA; longer-term buy levels only attractive below $120.
4.Nvidia (NVDA): Pre-Earnings Pullback, CEO Selling Raises Concerns
- Event: Aiming for $200 post-earnings, but CEO Jensen Huang sold 150k shares on Aug 14–15 at $180.8 average ($27.1M). Historically, his sales preceded corrections.
- Related Stocks: Nvidia-linked names (APLD, CRWV, NBIS) fell sharply. CRWV halved from $187 peak to $88.65, barely holding $90 support.
- Technical: CRWV could rebound toward $110 if $90 holds; a breakdown risks $80 or even $65 in a broader market downturn.
5.Oklo (OKLO): Five-Day Slide Exposes “PPT Company” Risks
- Action: Shares followed MicroStrategy (MSTR) lower, falling 5 days straight with <30% retracement from highs—shallower than CRWV.
- Debate: Business rests on “data center + nuclear” hype, but remains at PPT stage with no real earnings.
- Call: Better to avoid than bottom-fish; downside risk remains.
6.MSTR & Crypto Treasury Stocks: Dilution Fears Trigger Selloff
- Trend: MSTR broke below its 200-day MA. Peers adopting “equity issuance for market cap” model crashed as liquidity drained.
- Cycle Risk: These stocks thrive in liquidity booms but collapse in tightening cycles. Most will fade to penny stocks, with few survivors.
7Viking (VKTX): Obesity Drug Miss Sends Stock Down 42%
- Event: Oral obesity drug VK2735 showed 12.2% weight loss over 13 weeks, below bull-case expectations. 28% patients discontinued due to side effects.
- Impact: Undermines competitiveness vs. Eli Lilly and Novo Nordisk. Typical biotech volatility: sharp moves on data.
8.Salesforce (CRM): Software Sector Slump, AI Hype Fades
- Trend: CRM down 26% YTD; sector broadly weak.
- Driver: Rising concerns AI could disrupt traditional software, plus profit-taking in AI-related names.
- Warning: Momentum-driven “theme stocks” must be sold when sentiment shifts; otherwise, investors risk losses even in bull markets.
III. Market Takeaway: Policy vs. Valuation, Caution Ahead
The August 19 pullback reflects profit-taking in overvalued sectors and uncertainty over policy guidance. Despite the tech rout, the modest VIX increase shows investors opted for hedging, not panic selling.
Strategy Guidance
- Short-Term (pre-Friday): Reduce exposure to high-multiple tech (AI, crypto) to avoid Powell + Nvidia double risk.
- Medium-Term (rate cut cycle): Look for quality names in housing retail and semis after pullbacks.
- Long-Term: Avoid speculative PPT-stage and high-volatility biotech names. Crypto treasury plays should only be revisited once liquidity easing is clear.
Bottom Line: The market always offers opportunities—but protecting capital matters more than chasing gains.
