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🚨 Market Headlines This Week
And we’re back! What an interesting week it’s been so far in the markets and we have a lot to get into in this weeks stock market article so buckle up and let’s dive in!
The story this week is Netflix ( $NFLX ( ▼ 0.37% ) ) which a big swing and a miss on earnings, Crude oil rallying again with Russia sanctions, Subprime lenders making noise again and finally quantum stocks.
On top of all of the the SP500 and Nasdaq have been trying aimlessly to find some market direction this week but with these major earnings in Netflix and Tesla missing we may just see them start to roll over a bit to end the week. For readers of the recent issue of The LongVol Report we talked about this but we also talked about other ideas this week which is great — that’s a benefit to this report, we don’t have to always talk about SP500 and every 15 min candle move it has or (and worse) become your local guru who sounds like a 🦜 parrot always talking about “this time is it!” (It’s not).
The $SPY ( ▲ 0.49% ) is not that bearish - at least just yet We might be at a double top but it’s really the key support at $660-$665 that is going to matter coming into today and into the end of this trading week — below that area then things might get shifty so that is my key spot to watch to step on index shorts that I already own as of this week.
4H SPY CHart
Then Trump is speaking today at 3PM - so we’ll see how and what he has to say this time but interesting that we’re getting it a day before options expiry.
Speaking of options - check out this data below from Barchart. Pretty wild. I have been talking about the cause and affects of this for sometime and this is a doubled-edged sword that only exacerbates moves.
✅ Options Flows w/ Trader X
If you missed it. This week was the first week of an old mentee of mine “Trader X” and his new service where he gives you his 3 Best Trade Ideas each Sunday as well as market posts — he’s already done two this week and is showing his real trade logs for transparency. Personally, I like that he’s doing that because every guru out there loves to talk about their macro and market calls but very few of them actually trade the risk.
💰Netflix Earnings: A Swing and A Miss!
Netflix reported third-quarter adjusted earnings of $5.87 a share, missing analyst estimates of $6.96 a share.
Shares of Netflix dropped 5.6% in after-hours trading following the release of its third-quarter earnings report.
Netflix’s stock has risen approximately 40% this year and 61% over the past 12 months despite recent declines.
In situations like this I like to let the implied vols settle down a bit and then start to look for continuation moves, especially on this big of a move.
🔔 How am I trading it?
The stock on the daily chart broke some key technical support levels which means my target now is the 50% fibonacci retracement down there at $1,080s or so - now keep in mind - this is a general area and not an exact target. I think many alleged technicians are more obsessed with the exact targets and I could care less as long as we have a general are of where price is going — so today into end of week I am looking to trade this short.
💰Crude Oil Futures Rally
For those new here I started my career on a futures desk trading index futures and WTI crude so whenever I get the chance to trade WTI futures I jump at it (which has been rare this year). We also flagged one of my favorite price-action patterns with Crude last week in the report so we were already looking to be buyers of this market and we’ve got a great move there.
🔔 How am I trading it?
WTI Crude Futures or WTI Crude Calls: I prefer this because it’s the direct way to trade the idea and the leverage on the futures is preferred. Sometimes pairing that with WTI Crude oil futures options is a move too and I know some readers did this on this exact idea this week.
USO: direct equity or DITM options - for those who do not trade futures or want less volatility in the trade the $USO ( ▲ 4.21% ) ETF is the other direct way to play it and you can spice the trade up with some DITMs (Deep In The Money) calls to give you a bit of leverage.
💰Subprime Lenders - Issues Unfolding
This is something a bit more complex in the world of Wall St. right now but many of these subprime lenders are experiencing issues with the latest one, PrimaLend filing bankruptcy yesterday. Now, we could take the direction here on this website and regurgitate this article or try to confuse you a bit more like the rest of these charlatans but we’re here to take this info and generate ideas from it — so let’s focus on that!
Shares of major subprime-exposed lenders and fintechs have faced sharp sell-offs amid fears of contagion. For instance, Ally Financial ( $ALLY ( ▲ 0.84% ) ) dropped 13% in recent trading sessions due to its heavy subprime auto loan exposure, while Upstart Holdings ( $UPST ( ▲ 3.43% ) ) and Pagaya Technologies ( $PGY ( ▲ 3.91% ) ) fell over 20% as investors reassess credit risk in alternative lending models.
Auto retailers and suppliers are also under pressure: Asbury Automotive Group ( $ABG ( ▼ 3.02% ) ) and Carvana ( $CVNA ( ▲ 0.16% ))have seen volatility, with warnings of softer used-car demand as financing dries up. First Brands' bankruptcy highlighted tariff-related strains on auto parts, contributing to a 5-7% dip in sector ETFs like the Consumer Discretionary Select Sector SPDR Fund $XLY ( ▲ 0.16% ) as well.
🔔 How am I trading it?
Carvana - some of you remember this name who read the report for years because in March 2022 I released a short-report on it talking primarily about their cash balances and other nefarious issues. The stock then traded from $150 to sub $5 before that Apollo deal. Today, the trade is different and it’s predicated around their ABS, the amount of revenue it represents for their entire firm and a few other issues regarding their balance sheet.
LEAP Puts: I love LEAPs because they give you optionality and leverage on ideas and in certain stocks I own like $SWK ( ▲ 1.14% ) I own them because it’s a turn around play but Carvana may take time - at least that’s the thought so leaps fork.
Day Trade It: This stock is having wild swings right now so day trading it works for those skilled enough to do it. Big ranges, big dollars if you get it right.
One thing to remember is in situations like this is that it’s important to get away from the “I called that” or the “I told you so crowd” - anybody can do that - actually making money from the ideas is what matters. I think many investors (myself included) can get caught up in information that clutters the idea and takes away from execution. We already know they have issues present, especially those readers here since 2022, so what more do you need to know? It’s time to trade it, not talk about it so let’s do that until this thing is down to $150.
💰 Quantum Stocks: Stairs Up, Elevator Down!
Quantum stocks are all the rage the last few months and while many of them are trading at valuations that are insane, they’re moving. Anytime I log on to X I see the usual crowd arguing about the valuations and the trades on them and that’s just standard operating procedure — again, most like to talk about investing, very few are actually doing it.
These names below were the names allegedly on the radar from the government — so from death and destruction yesterday and the past few days to a revival overnight.
🔔 How am I trading it?
Honestly, I don’t know that I am. I was short $IONQ ( ▲ 4.62% ) with some long-dated puts as a portfolio tail-risk trade but the issue I have personally with these names is that there’s too many eyes on them now — now this might be good for the day traders out there who can use that volume to trade large blocks of shares but I’m not a day trader. Second, the implied vols on the options chains on all of those is too elevated for me to take directional trades and my approach is not to be a seller of premium just for the sake of it — I am happy to wait on other ideas to trade which is also one of the reasons we have +35 stocks in The LongVol Report: I don’t have to chase things just for the sake of chasing them.
🔔 Conclusion
In closing, we are still in the heart of earnings season so I don’t expect too much here to happen in the broad market but that’s ok for those of you that read the PDF report because we have other ideas!
Crude is in play and today is key
$CVNA ( ▲ 0.16% ) is on the hot-seat to end the week so let’s see where that closes
Trump at 3pm today, let’s see what Don Taco has to say!
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