Thank Nvidia (NVDA) for today’s uptick in the stock market. The stock accounted for nearly 70% of the day’s gains in the Bloomberg 500, a proxy for the S&P 500. Interestingly, the equal-weight RSP ETF declined today.

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Tomorrow is a significant day, as the market will closely watch Nvidia report its earnings after the close. Unfortunately, I couldn’t devote as much time to my analysis today due to personal matters. However, a few aspects seem unusual as we approach Nvidia’s earnings tomorrow.

Notably, options volume—especially call volume—has been lower than usual over the last two trading sessions. This is unexpected on the eve of an earnings report and is something to watch throughout the day tomorrow.

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Implied volatility levels appear notably lower heading into tomorrow’s earnings results than in the past.

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It was also unusual that the stock surged nearly 5% today on fairly average volumes and below-normal call volume.

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This situation marks a departure from previous trends in earnings results, which might indicate a shift in investor enthusiasm. It’s uncertain, but it could be that all the speculative positions have already been established. However, it is clear that the notional gamma values at the $150 strike are double what they were during the last report in August at the $130 strike. In August, the gamma at $130 for 8/30 expiration was around $50 million on the day of the results, with an implied volatility (IV) of 152.

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Today, the gamma at the $150 for 11/22 strike price exceeded $100 billion, with an implied volatility (IV) of 94%. The notional gamma value at the $155 strike is more significant than what was observed at the $130 strike price last quarter.

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The accumulation of gamma suggests that $150 may act as a significant level of resistance, mainly as implied volatility (IV) decreases following the results, prompting call holders to sell their shares if prices fail to surpass $150.

Nvidia’s influence on the market is well-documented, and if it exceeds expectations, causing its stock to rise, the broader market could follow suit. Conversely, if Nvidia fails to surprise the market, it could pose problems for the overall market.

Interest appears to be subdued currently, and the likelihood of the stock advancing tomorrow could be challenging without any significant surprises. Given the company’s beat by $2 billion, guide higher by another $2 billion, it seems the secret is already out.

The final piece tomorrow will be the VIX1D. In August, it surged to 21.4 on the day of Nvidia’s results, and it closed today at 11.6. That 21.4 level is a good barometer of how nervous the market is heading toward results after the close, and the IV crush that is likely to follow in the S&P 500.

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