tastylive: Today's Assignment

In this episode of Engineering the Trade, host Jermal Chandler and guest Errol Coleman discuss recent market volatility across multiple sectors. Gold dominated conversation, with both traders noting its unprecedented nine consecutive weeks of gains—a streak that has never reached ten weeks in history. Chandler maintained a short gold position using MGC contracts, expressing caution despite the metal's strong momentum. He employed a strategic approach by selling GLD put spreads during dips while maintaining his overall bearish stance on gold. The discussion shifted to quantum computing stocks, particularly IONQ and RGTI, with both traders noting significant volatility in these names. Coleman pointed out that RGTI's CEO recently sold shares, questioning the sustainability of current valuations in the sector. Both traders observed unusual market conditions with "bubble" discussions across multiple sectors simultaneously—from quantum computing to energy, AI, and precious metals—creating both opportunity and caution signals for experienced traders.

TSM reported strong earnings with optimistic AI outlook, though stock price movement remained underwhelming. This exemplifies the current pattern with chip stocks - stellar results but muted price reactions. TSM's positive guidance boosted related companies like NVIDIA, AVGO, AMD and Apple. CoreWeave announced a first-of-its-kind AI object storage service, positioning itself as a potential dark horse in the AI space. Regional banks Zions and Western Alliance warned of credit loan losses, signaling potential consumer struggles. This concerning trend, coupled with employment market issues, contributed to falling two-year yields as markets anticipate additional rate cuts. Gold and silver continue their meteoric rise, with gold approaching an unprecedented tenth consecutive weekly gain. Market participants are currently favoring precious metals over other investments including Bitcoin, cash, and bonds.

OpenAI continues its strategic expansion through a new partnership with Broadcom (AVGO) to design custom chips, marking another major alliance for the $500 billion company that's influencing tech giants. Bloom Energy (BE) announced a $5 billion partnership with Brookfield Asset Management for AI infrastructure using their fuel cells, representing nearly 20% of their market cap. IonQ reported significant advancements in quantum chemistry simulations, contradicting earlier claims that quantum computing applications were years away. The news boosted related stocks including QBTS and QUBT. Rare earth metal stocks are surging after China announced export restrictions, with companies like MP Materials, LAC, USAR, and TMQ seeing substantial gains as investors target critical materials essential for technology manufacturing. AI-related investments continue accelerating, with JP Morgan pledging $10 billion toward companies deemed essential to national security.

In today's episode of *Engineering the Trade*, host Jermal Chandler and guest Gus Downing discussed their market positions amid a market pullback, emphasizing long Delta exposure and their strategies for managing risk. Both noted that instead of hedging, reducing long positions can be more effective. They highlighted the psychological benefits of having some green trades amid losses. The conversation also touched on VIX trends and potential market movements as they anticipate a bounce back, with a focus on confirming a market bottom before further positioning.

Rare earth metals and minerals stocks moved higher as China appears to be limiting supply. MP Materials, LAC, and TMQ all showed early gains before pulling back. China dominates rare earth production, critical components for electronics manufacturing. Costco jumped on strong monthly sales data, with digital demand driving growth. The retailer's positive performance comes despite broader consumer spending concerns, suggesting potential for further stock appreciation. DoorDash announced a partnership with sidewalk robot developer Servrobotics for deliveries in Los Angeles, signaling expansion of automation in the delivery sector. The dollar strengthened in a four-day rally, approaching par ($100) on the DXY index, pressuring currencies, gold, stocks, and oil.

AMD shares surged on a new partnership with OpenAI, highlighting how the still-private AI company continues to move public markets. Similar deals have recently boosted Nvidia and Oracle, demonstrating AI's lasting market impact rather than being a passing trend. Fifth Third Bancorp announced an all-stock acquisition of Comerica, creating the 11th largest U.S. bank by assets. The merger represents ongoing consolidation in the regional banking sector as institutions position themselves for potential interest rate cuts. Tesla teased a new product launch coming within 24 hours, with speculation focusing on a lower-cost vehicle model. The stock rebounded after falling last week following monthly sales data, with options volatility spiking ahead of the announcement.

In this episode of Engineering the Trade, host Jermal Chandler welcomes guest Errol Coleman to discuss the implications of a longer government shutdown on the financial markets, particularly focusing on the S&P 500 (SPX) and its recent performance. They analyze volatility in various sectors, and individual trades such as a SPY diagonal spread a Jade Lizard in UNH and a short strangle in natty gas. The conversation emphasizes market patterns and the importance of risk management amid fluctuating market conditions.

Tesla reported strong global deliveries amid the expiration of the $7,500 EV tax credit, yet shares fell 4% in a classic "buy the rumor, sell the news" scenario. The stock bounced off its 10-day moving average at $438.10, potentially creating an opportunity for short-term call options. Warren Buffett, already a major Occidental Petroleum (OXY) shareholder, purchased the company's petrochemical unit. Surprisingly, OXY shares declined despite the asset sale, which management intends to use for share buybacks. Fair Isaac (FICO) is disrupting credit reporting by providing scores directly to lenders, bypassing traditional agencies like Equifax and TransUnion, whose shares weakened on the news.

CoreWeave continues its aggressive funding streak, securing a $4.2 billion cloud infrastructure deal with Meta. The company, which rents out NVIDIA-equipped data centers, previously inked deals with OpenAI ($6.5B) and Oracle, positioning itself as a key infrastructure player in the AI boom. The August JOLTS report came in slightly higher than expected at 7.2 million job openings, providing limited support for rate cut expectations. Markets remained quiet as traders await the non-farm payroll report, which may not be released if the government shuts down. DraftKings (DKNG) shares weakened on emerging competition from Robinhood's prediction markets. Despite near-term pressure, the sports betting platform may represent a buying opportunity given the temporary nature of these competitive concerns.

Cannabis stocks, led by Tilray (TLRY) and Aurora Cannabis (ACB), are experiencing an uptick amid ongoing discussions about potential marijuana reclassification. Netflix (NFLX) is rumored to be entering a bidding war for Warner Bros. Discovery, indicating a shift towards consolidation in the streaming industry. Additionally, the looming government shutdown raises concerns, though historical trends suggest that the market may not necessarily decline. A strong jobs report is anticipated on Friday, influencing market volatility and trading strategies.

In this episode of "Engineering the Trade," Jermal is joined by Errol to discuss the latest market movements influenced by a flat Core PCE report, suggesting potential for rate cuts. They emphasize the importance of volatility and the trading environment, with hosts sharing their strategies on shorting volatility in stocks like IBM and Oracle. They also touch on positions in Chinese stocks such as Baidu (BIDU) and Alibaba (BABA), noting significant upside activity. The conversation includes insights on managing risk in trading, particularly regarding options strategies.

Amazon (AMZN) is facing challenges after agreeing to pay $2.5 billion for deceptive practices related to Prime subscriptions, impacting its stock price. Meanwhile, Starbucks (SBUX) is restructuring amidst rising coffee prices, considering store closures and job cuts, and leading to questions about potential trades. IBM (IBM) is experiencing a surge in stock value due to recent developments in quantum computing. Volatility is increasing in the markets, fostering potential trading opportunities.

On today's Engineering the Trade, we explore the ongoing market rotation from tech stocks to small caps as interest rates are poised for cuts. We discuss Amazon's recent business challenges and Zero Hash's significant funding round that reflects increasing cryptocurrency acceptance. Additionally, we unpack the current volatility trends indicated by the VIX and what it means for traders. Tune in for insights on how these elements impact trading strategies in today's evolving market landscape. Don’t miss it!