NVIDIA’s (NVDA) latest earnings were a blowout—revenue up 73% to $68.1 billion, EPS up 82%—but the stock reversed anyway, paring initial gains and closing flat to slightly down. Why? Because the daily chart was already screaming reversal, courtesy of market maker (MM) and option dealer manipulation. From a VPA perspective, this is a textbook case of anomalies trapping retail while merchants offload inventory. Let’s break it down.
The Setup: From Support to Resistance Trap NVDA rallied from $185 support (where the Quantum Volume Point of Control sits—a high-volume node signalling strong buying interest) to $196 resistance. But at the top? A narrow spread candle with an upper wick on above-average volume—anomaly alert. Effort (high vol) yielded poor result (tiny gain, wick rejection). This was the third test of $196—repeated tests are classic traps, where MMs lure FOMO buyers just to fade them.
High call volume at the $200 strike added fuel: Dealers hedged gamma exposure, pinning price high enough to extract liquidity from retail chasing the breakout. In VPA terms, this is distribution—merchants selling into strength while controlling the ceiling.
Post Earnings: High Volume vs. Spread A further VPA red flag: High volume relative to the candle’s spread. Price held despite the drop, suggesting underlying buying support. But why the anomaly? MMs are absorbing selling to manage the reversal without a crash—trapping shorts who expected a plunge. From the merchant lens, this is controlled distribution, akin to taking the crowd (retail) to the “woodshed”, thereby providing liquidity while prepping the next leg.
Moving Averages in Congestion: A Non-Signal. The intertwined 20/50 MAs confirm we’re in chop, not trend. MAs shine in directional moves but are useless here—they signal congestion, where VPA anomalies (like high-vol wicks) take centre stage.
Added VPA Layer: Distribution Signals Amplify the Trap Zooming out, NVDA’s rally shows classic distribution clues: Repeated high-effort stalls at resistance (effort not rewarded), upper wicks on rising volume (weak demand sold into), and the third test as a small upthrust. Merchants are quietly exiting while retail chases earnings hype. But anomalies are your early warning: Spot the disharmony, wait for confirmation (e.g., low-vol test holding support).
In summary, NVDA’s daily is MM manipulation 101: Great fundamentals ignored because the chart was primed for a pullback. VPA cuts through—effort-result anomalies reveal the intent. For traders, this is an opportunity: Buy the fear if absorption confirms; short the fade if distribution breaks lower.
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By Anna Coulling – Creator of Volume Price Analysis
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