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We've got Nvidia earnings after the bell this afternoon. The feeling I shared to my analysts today -- and they all agreed -- is that if Nvidia disappoints, the likely result will be a small speedbump for the overall stock market. But if investors cheer the Nvidia earnings results, then gas is going to get poured on this bull market.
The Russell 2000 Small Cap ETF $IWM does not have direct exposure to $NVDA, so our risks feel limited on the downside. However, in a resumption of the bull market, small caps have a good chance of ripping to and through new highs.
Our last trade idea post was titled "European Vacation." Today's trade is in a name that is most definitely in the vacation theme.
And if you've attempted to book a hotel room in the past year, you know that rates are soaring. This might be bad for budget-sensitive travelers, but it can be bullish for investors.
Looking at a basket of the fifty biggest names in Europe, we've got a clean level to bet against for a rotation higher. And a volatility picture that offers us an edge to play it.
I generally try to avoid that. Today's trade might be the simplest thing I do: follow a trend.
When a chart is going from the bottom left to the upper right, who am I to call a top in something like that? What kind of arrogance must I have to think I'm the one who can call the turn?
Let somebody else be the hero. I'm going to follow the trend until it ends.
During our Analyst meeting this morning, I observed the relative "calm" in the Chinese Large Cap ETF $FXI and how, while down for the day, it is still holding in a range it's been in for over three weeks now.
And we love how it's holding this range as a healthy consolidation from its late September breakout.
There's nothing about this chart that is bearish to me:
When I mentioned the relative bargain in long-dated call options in $FXI, JC said: "If we get rotation into China, this trade could make our year.
As we inch closer to the election, the "change-of-narrative" plays still hold interest to me -- both as hedges to my overall bullish positioning, and as alpha generators.
Today's trade is in a "junky" solar name that has gotten beaten down with the rest of it's sector as investors are pricing in a Trump victory that would be perceived as bearish for the Solar Industry.
But what if a Trump victory results in an inverse "sell the news" type of event and the selling pressure gets lifted from this sector? Or, better yet, what if the pollsters are wrong (it's happened before!) and Harris comes out victorious? Wouldn't that result in an immediate narrative shift for this sector? And if that happens, junky stocks like today's trade could potentially offer a tremendous amount of alpha.
Shoutout to my boy Kenny Glick. He's the man. And I feel like I'm channeling him a bit today. I recently saw him talking about how he's getting into a trade in a name that has failed on him so many times in the past. Yet, when there's a favorable setup, he has to step up and take another swing -- even though he's seen this movie before.
I'm going to do something similar today in a crypto miner. I've been beaten time and time again with these things. But one of these times it's got to work! Why not today?
Please forgive my tirade at the beginning of this episode about my short $MTB trade. I had to defend my honor...
But after that, me and Strazza get into the setup in MARA Holdings $MARA and how we arrived at what might seem to a lot of you (me too) a pretty high risk, but potentially huge reward trade: