Micron Earnings Will Determine Course Of AI Rally, Apple’s Europe Problem,

To gain an edge, this is what you need to know today.

Course Of AI Rally

Please click here for an enlarged chart of Micron Technology Inc MU.

Note the following:

• This article is about the big picture, not an individual stock. The chart of MU stock is being used to illustrate the point.
• Micron earnings will determine the course of the AI rally. Micron earnings will be released Wednesday after the close.
• The chart shows a gap up after earnings release last quarter. Bulls are expecting a similar gap up this time. However, prudent investors know that earnings is a risk event and the results can go either way. Consider starting with Arora Second Law of Investing and Trading, which states, “Nobody knows with certainty what is going to happen in the markets.” Consider following with Arora’s Third Law, which states, “Making investing and trading decisions based on probabilities is the only realistic and profitable approach.”
• The chart shows that in June, MU stock accelerated away from the trendline.
• The chart shows last week MU stock traced a bearish engulfing candle. This is a negative pattern.
• The bearish engulfing pattern in Micron coincided with a bearish engulfing pattern in NVIDIA Corp NVDA. Please click here to read more.
• High bandwidth memory is essential for AI data centers. As we have previously shared with you, Micron is sold out of high bandwidth memory for the rest of the year.  
• Consensus earnings estimates for Micron are $0.48 and $6.6B for revenue.
• Whisper numbers have been creeping up and are now at $0.55 in earnings and $7B in revenue.
• Stocks move based on the difference between the reported numbers and whisper numbers. Whisper numbers are the numbers analysts privately share with their best clients and are often different from the numbers the same analysts publish for the public.
• The fate of the AI rally, and in turn the fate of the entire stock market in the near term, depends on Micron earnings, projections, and the commentary. Historically, Micron’s CEO tends to be very bullish. 
• Nvidia (NVDA), the king of AI, continues to go lower in volatile trading after tracing a negative technical pattern last week. Of note is that there was a rally attempt around 8am ET, but the rally attempt failed. If a rally attempt succeeds, it will move the entire stock market to the upside.
• Prudent investors should note that NVDA stock has drifted down in spite of massive buying by the technology ETF Technology Select Sector SPDR Fund XLK. XLK has about $72B in assets. Last week, it increased NVDA weighting from about 5% to over 20%.  XLK compensated by reducing AAPL’s weighting from about 21% to about 5%.
• The European commission has told Apple Inc AAPL that preliminarily, Apple’s App Store is in breach of the Digital Markets Act (DMA). Investors are ignoring it because in the past, Apple’s violations of regulations have resulted in only slaps on the wrist. However, prudent investors…