Hedge Fund Deleveraging Drove Last Week's Drop, and Nvidia Earnings Set Up the Bounce

As seen on the 24/7 Wall St. homepage on November 8, 2026.

Financelot @financelancelot Quote post

If last week's drop was forced hedge fund selling, the bounce window closes fast, and Nvidia's earnings is the catalyst traders are positioning into.

Noel Smith is expecting a market bounce too because the panic this past week was a hedge fund deleveraging event. He also points out the anticipation for Nvidia's earnings should drive markets upward. This aligns with the August 2024 scenario in my chart below, with a short https://t.co/zOS8Zu4Ymp https://t.co/TgFE62K15L [Quoted @FinanceLancelot]: Since the 2018 and 2020 patterns no longer match the current selloff, I started looking back at other scenarios. It's amazing how similar our current situation looks to August 2024. Not only that, but the narrative surrounding the August 2024 selloff is very similar. "A global https://t.co/DYwN7Py7u7 https://t.co/lNveMaQ2Yf
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Noel Smith reads last week's selloff as a forced deleveraging event among hedge funds rather than an organic market breakdown. Deleveraging-driven drops tend to reverse quickly once the selling pressure clears, leaving a narrow window for traders looking to position on the other side.

Financelot echoes that view and draws a specific historical parallel: the current setup resembles the August 2024 selloff in both price behavior and the narrative that surrounded it. The 2018 and 2020 patterns, which had been the earlier reference points, no longer fit the shape of this decline, which is what pushed both analysts toward the August 2024 comparison.

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The near-term catalyst traders are pointing to is Nvidia's upcoming earnings report. Anticipation around that report is seen as a driver pushing markets higher ahead of the release, making the timing of any bounce closely tied to how sentiment around Nvidia builds in the days leading up to it.

The bounce window, if the deleveraging thesis is correct, closes fast. Forced selling unwinds on its own schedule, and once the pressure is absorbed, the entry opportunity that follows tends to be brief. That urgency is what gives the August 2024 analogy its teeth for traders watching the setup now.

Sources

Mentioned: NVDA

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