Nvidia plunges—Is the U.S. stock market’s AI bubble about to burst???
Nvidia $NVDA closed at $186 this week, extending its previous downtrend. This may signal that a monthly-scale correction is officially underway, with the entire cycle expected to take 6–12 months.
Looking at the downside, $150 is the first support level, but I don’t think it’s necessarily going to hold. The area around $100 is more worth watching and could become a major target in this deep correction.
The Nasdaq has not yet decisively broken below key support around 24,400, so a short-term rebound is still possible. But looking at the medium-term structure, I still lean toward the view that the uptrend will eventually be broken. That could happen in a few weeks, or it could take three or four months.
If the U.S. stock market’s AI bubble bursts in a systemic way, global risk assets could all face a liquidity shock, and gold, silver, and BTC are unlikely to escape entirely unscathed. However, I think the impact would be mostly short term. In the long run, the bursting of the AI bubble could actually strengthen the case for holding gold and BTC.
Going by the usual patterns of the U.S. stock market, it tends to have long bull markets and short bear markets. Generally speaking, a 20% pullback in an index from its peak is about as much as you can expect. As long as there’s no systemic crisis in the U.S. stock market, you can keep following this strategy. So I think that as soon as the Nasdaq pulls back around 20% from its peak, you can jump right in. Fortune favors the bold; the timid go hungry. Don’t lose your nerve when the time comes, only to kick yourself when U.S. stocks hit new highs again.
Nvidia $NVDA closed at $186 this week, extending its previous downtrend. This may signal that a monthly-scale correction is officially underway, with the entire cycle expected to take 6–12 months.
Looking at the downside, $150 is the first support level, but I don’t think it’s necessarily going to hold. The area around $100 is more worth watching and could become a major target in this deep correction.
The Nasdaq has not yet decisively broken below key support around 24,400, so a short-term rebound is still possible. But looking at the medium-term structure, I still lean toward the view that the uptrend will eventually be broken. That could happen in a few weeks, or it could take three or four months.
If the U.S. stock market’s AI bubble bursts in a systemic way, global risk assets could all face a liquidity shock, and gold, silver, and BTC are unlikely to escape entirely unscathed. However, I think the impact would be mostly short term. In the long run, the bursting of the AI bubble could actually strengthen the case for holding gold and BTC.
Going by the usual patterns of the U.S. stock market, it tends to have long bull markets and short bear markets. Generally speaking, a 20% pullback in an index from its peak is about as much as you can expect. As long as there’s no systemic crisis in the U.S. stock market, you can keep following this strategy. So I think that as soon as the Nasdaq pulls back around 20% from its peak, you can jump right in. Fortune favors the bold; the timid go hungry. Don’t lose your nerve when the time comes, only to kick yourself when U.S. stocks hit new highs again.
