SPEAKERS
Justin Nugent, Andrew Brill
Justin Nugent 00:00
This is a bold bet, right? I am making my winner for the week
Andrew Brill 00:10
Welcome to next week on the trading floor. I’m your host here on wealthy on and we’re here to help you
keep and grow your money. Next week on the trading floor was developed to explore current trading
ideas, market trends and opportunities to watch. It’s real time insight to help you make informed
decisions in the ever evolving financial markets and in conjunction with market rebellion will give you
stocks to watch that will help you in the week ahead. Now I’d like to welcome in just a new agent of
market rebellion. Justin’s an analyst, he’s responsible for rebel roundup three and three and all that
good all the information that market rebellion gives you. That’s Justin. And that’s why we have him
here. So Justin, welcome to This Week on the trading floor next week on the trading floor.
Justin Nugent 00:58
Thank you so much, Andrew, it’s an honor to be here.
Andrew Brill 01:01
So let’s get right to it. Good financial information. I guess that came out this week, the PPI came out the
CPI, which is what the Fed really keeps an eye on slightly lower. Look, let’s face it, the inflation has
been a little bit stubborn, but it was slightly lower explained to us the ramifications of it coming in slightly
lower.
Justin Nugent 01:20
Yeah, you know, it’s funny, the CPI didn’t come in and say we’re great inflation is over. It just wasn’t a
disaster. And so that means we’re gonna rally, you know, we’re back to all time highs in the s&p, the
NASDAQ and the Dow. We’re going to talk more about that later. But at the end of the day, when PPI
came in, people got a little bit scared. And then we revised down March and they said, Okay, let’s wait
for the CPI CPI comes in and it shows that inflation is still here, but it is starting to abate. This is data
that the Fed likes to see the initial jobless claims came in. And we got that that often said Goldilocks
number where it’s a little bit above expectations, but a little bit less than last week. That’s good as well.
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So it’s not surprising that we rallied a bit. The other exciting news of the week, part of the exciting thing
to see is his mean stock madness is back guys. GME went from you know, $10.94 on the first of May,
up to 60 something and all the way back down to 20. Again, AMC made a similar move to 91, all the
way up to $6 and change and down and suddenly across the whole market. All of these stocks that are
highly shorted and very beaten down, are starting to rally on no news. Why? Because a gentleman by
the name of roaring kitty on Twitter has begun posting again. Is he posting some really in depth market
thesis on why these stocks should go up? No. He’s posting memes. They’re cryptic memes. He’s
posted about 100 of them. That’s all it took. And, you know, just as soon as the stock started to rally,
we saw them start to come back down. Because people are starting to see he’s not posting anything
other than means and there are rumors. These are unsubstantiated. I don’t know what the ramifications
of these rumors are, how true they are that, you know, maybe this isn’t the same guy. That’s not what
I’m saying. That’s what’s starting to propagate across social media because there’s been no YouTube
presence, which he had posted on very frequently before there’s no Wall Street beds presence, which
is a forum that he had used to propagate the first squeeze in GME or to draw attention to it. All right. So
this is starting to look like maybe the meme stock madness might be subsiding. But one thing I just
wanted to draw quick attention to is that at market rebellion, we focus on following the smart money.
These are very large, unusual trades in the options market underneath the surface of where people are
normally buying shares. There are big players whales who are buying very large bets that a stock might
go up or down and before GME ever popped off on April 24, we started noticing some very large
unusual options activity in GME calls, those are bets that GME is going to go up and we saw it again
and again and again five separate times. With the stocks still in the 10 and $11 range between April 24
and may 1, these are options going for 20 cents, that at the top of this rally traded up to $52.80 this is
just a sign that sometimes these big moves in the market. Somebody knows what’s going to happen.
Andrew Brill 04:55
Yeah, it seems that way and I will be the first to admit that I had no idea what a guy leaning for We’re in
a chair with a game controller, what if it was a game controller? What that meant one of our viewers
actually said means he’s back in the game, Keith Gill is back in the game. Now, like you said, we don’t
know if it’s actually Keith Gill, or maybe it was someone who actually bought those options and said,
Look, I’m going to try and get in on this action. And, you know, polls that mean, but like you said, there
was more memes, stock popped, and AMC pops as well. But look, you know, if you follow the smart
money and do it that way, you have a much better bet of doing well with those options. And it’s a, it’s
nice to see him back, I guess. And we’ll see where it goes from here. And there’s gonna be a little you
know, roaring kitty one, we’re in kitty two, and there’s gonna be a lot more people on Twitter, or Reddit
or whatever it is, with some a similar name, maybe with a letter spelled or turned around. And, and, you
know, trying to try and make a stock pop here or there. But let’s get into our predictions from last week.
And pretty good.
Justin Nugent 06:01
We had
Andrew Brill 06:03
Citi Group, which did pretty well, I think that it was it was a it was a good bet, right there. Yeah,
absolutely. And
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Justin Nugent 06:10
what we’re seeing in the options market, which is where we originally called out this move in city, which
is up about a percent this week, right, is that they’re rolling and staying with this trade, that means
they’re going out to the next expiration, they’re staying on it. In some cases, they’re actually adding
money to this trade, because they think it’s still going to keep going. So
Andrew Brill 06:29
just in the unusual options, activity you saw in city, you saw that it started to go up, explain to us when
you say you know they you can roll it or exit it. Explain to us what you mean by that. Yeah,
Justin Nugent 06:43
maca rebellion, we really believe in keeping our discipline about us at all times. So when you start to
see money growing in this trade, you have two choices, you can roll it in order to lock in some of that
profit while remaining in that trade. And by the way, that’s what the smart money did. Or you can exit
that and move on to the next trade. Now, as I said, what they’re doing here is that they are rolling this
trade, that means they’re selling this option that we identified, and simultaneously buying another option
at a later expiration at a higher strike at a cheaper price, so that they can take the difference, put that in
their pocket, and then keep some exposure on this trade in case it keeps going up. So that’s awesome
that we went to one of our picks from last week, which was app loving, app love and didn’t do as well as
we thought it would. Yeah, Apple oven. It’s an interesting thesis because I think we all believe in the
data center, tailwind, right. But after you see a stock pop as hard as Apple lovin did after earnings, it’s
natural to see some profit taking these are people who maybe entered the trade ahead of earnings and
are exiting now because that was their whole thesis. And that’s okay, and maybe people who are
already invested. And then after earnings comes out apple up and pops hard. And they perform the
same type of discipline that we were talking about in city, they take a little bit of profit off the top. I don’t
think personally, that this past week, where they’re down a couple of dollars really invalidates the longer
tail wind of data and data centers. As Mark said last week, you can’t bet against big data. So I still like
Apple loving here, maybe not as a weekly trade, but certainly as an investment and perhaps as a
quarter we trade as well.
Andrew Brill 08:37
Now, that brings me back to a trade that I think John told us about was Cameco, which you know,
originally kind of stayed where it was, but now is starting to creep up again. So that’s a that’s a perfect
example of look, you know, if you hang on to these things, even though they may just go sideways for a
little bit, they’re going to eventually go back up. So chemical I think was a good trade up about $3. As
we record this, the stock in the penalty box was air b&b Mark thinking that the summer travel season
might not be as robust as we thought. And initially, you know, the stock when everything else was doing
really well hit 149 but dropped under 146. So wasn’t entirely wrong there. Absolutely.
Justin Nugent 09:21
Yeah. When you see underperformance in the wake of everything hitting all time highs and highly
shorted names, just a ripping dozens of percent, and you see a stock trading flat or letting go of some
gains. It’s not a great sign. I think the same story from App lovin is true about Airbnb, were those
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headwinds that Mark identified particularly those regulatory headwinds? Those still exist for Airbnb. But
after you see a stock fall from 164, down to 145, it’s natural that you maybe see some people starting to
take a bite. Maybe they like Airbnb as a disrupter to the hotel story, man Maybe they just want to see if
they can buy the dip, catch the falling knife a little bit, whatever have you. I think it doesn’t invalidate the
potential headwinds that are are facing Airbnb. And I think there could be more downside to go from
here and that name.
Andrew Brill 10:16
So actually, last week wasn’t a bad week, even though some of some of the numbers didn’t, you know,
didn’t pan out as good as we thought it wasn’t entirely a miss on the week, we actually had city group
that did well, app love, and we missed a little bit. But on the long side, we may end up seeing that grow
and come back, and Airbnb still facing those headwinds, as you say, so let’s get into our next week.
And we’re turning to AI for one of the winners for the week. Yeah,
Justin Nugent 10:44
absolutely. So this is a bold bet, right? I am making my winner for the week in video. Now. This is very
binary. They report earnings next week. And we’ve seen a pretty fickle earnings season over this past
quarter. All right, that means you can say, hey, I did great this past quarter. But you also need to say
my guidance for next quarter. It’s better than you thought it was. I think despite the China headwinds
that NVIDIA is going to do that. And let me explain why. So SMH obviously, that’s the semiconductor
ETF. They drove the market for a while at the start of March, they really got hit, they fell about 17%.
from peak to trough. They stay in a downtrend for about nine weeks. On the technical side, they broke
out of that downtrend on May 6. And now they’re looking right in the face of those all time highs again,
and no doubt in Vidya is controlling the car for whether or not we get there. Okay. Why do I think video
is going to report solid earnings more than solid? Let’s start with the fact that four of the largest
companies on the planet Apple, Microsoft, Mehta alphabet all come out this quarter, and they say,
we’re going to increase our spending on AI. And that’s not going to stop anytime soon, we’re actually
doing that even more next quarter. And the quarter after that, guess what, still increasing our spending
on AI. You look around and you say, Who’s the beneficiary of that AI spending? Maybe it’ll be spread
out across all the big AI chip companies. Here’s the thing, we’re starting to see some earnings from
some of these AI chip companies. And we’re seeing AMD and we’re seeing Intel and we’re seeing
some other companies, and some of them are doing good and some of them are doing bad, but
nobody’s coming out knocking it out of the park, right? AMD comes out and they say if we’re just okay,
we’re not increasing our guidance in some crazy way. We’re not announcing a mass of new orders. So
who’s left at this stage? It’s in video. The creators of the most powerful chip on the planet, which is also
incredibly expensive and so sought after that it’s actually sold out in several places, reportedly until
2025. Nvidia CEO Jensen Huang recently said, even if our competitors sold their chips for free, they
would still be too expensive because our chips are that good. those are fighting words. Alright. The
elephant in the room here is that, you know, a lot of people hate to acknowledge this, but it’s very
important from a trading perspective, which is the possibility that invidious splits its stock, we know that
this does not increase the intrinsic value of invidious stock. But Nvidia has a history of rallying on these
announcements and if it comes on the back of a very solid earnings, that could definitely mean
something. Jensen Huang recently gave an interview back in March where he teased the concept
saying he likes us stock splits that are good for employees that he wants to take care of those
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employees. You know who else stock splits are great for momentum traders? All right, I said the last
time that invidious split stock, they rallied How much 35% from the announcement date to the split date.
That’s a lot. The very last thing of note is that back in March on the same day that NVIDIA got crushed,
we identified a massive dip buyer dropping nearly a billion with a B dollars on Nvidia June expiring 820
strike call options now that’s, that’s a pretty short term bet. To bet a billion dollars on that’s, that’s a lot.
Alright. Since then, with the downtrend in place, you might have thought they sold those they didn’t,
they actually did what we talked about in city, they rolled about half of them up to the 880 strike, that
means that they think that in video is still going to go up and they left the remaining position down at the
820 strike. Both are still worth hundreds of millions of dollars. And they added capital in that role. They
added money they doubled down to this day in all of invidious options chain. These are the highest
open interest options that exist. So my winners in video
Andrew Brill 14:49
and video right now trading over 900. So those those options look pretty good at this point. So let’s look
at the loser at this point. And we We head over to I guess, lucid group. And I believe they’re carmaker
Is that correct?
Justin Nugent 15:07
Exactly. Yeah. Evie? Yes. Ah, so this is a lot simpler and I took a lot of time within video. So I’ll make
this quick. Meme stock madness looks like it’s at the end of its next chapter but shorting GME and AMC
in any form, it’s kind of a recipe for disaster because the you know, shorting them, they’re very hard to
borrow the options very pricey. It’s big roll the dice. You never know, if Keith Gill roaring kitty, whoever it
is, is going to come out and they say something that inspires some people to fight back against the
hedge funds once again. But what about all these names that were beneficiaries on the side? You
know, the loosens the highly shorted names that started to pop simply because other short names were
starting to pop, but didn’t have any news. I think these are going to begin there move back to the
downside as traders who entered these positions who enter these stocks are starting to see okay,
maybe the squeeze isn’t what I thought it would be. Let me take my profit. Let me take my loss,
whatever that is. So I think looses a beaten down name, which is probably going to get more beaten
down this coming week.
Andrew Brill 16:19
So unusual options, activity. I know that you guys, this is what you guys do. It’s how you guys make
your trades and what you watch for. And one of my favorite stores target is on that list this
Justin Nugent 16:31
week. Yeah, absolutely. So if you notice, yesterday, Walmart came out and they smashed earnings.
They said, We beat our EPS, we beat our revenue, we’re drawing in higher end consumers, we’re
keeping our lower cost consumers and we’re upping our prices. And that’s not hurting us. So we’re
looking good for next quarter. And we looked good last quarter were great. That has a lot of people
saying, okay, who’s kind of like Walmart, that’s reporting earnings. How about target and other big box
store, they’re reporting earnings on the 22nd, somebody came in and bought a very large quantity of
call options, that’s a bet that target is going to go up. And these call options expired on May 31, that’s
nine days after they report earnings. All right, these were in the money at the 155 strike. So they’re
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really putting a lot of cash. And a lot of due diligence, a lot of discipline on these options. They’re
protecting themselves from the potential of what’s called IV crush on earnings, which is where maybe
the stock goes up a bit, but not enough to justify the options, that’s not a thing for them. They’re saying
we know what we’re doing, we’re betting a lot of money. And we think that target is going to come out
with earnings that were similar to Walmart, and they’re gonna go up quite a bit. As a last note, Target
has topped out twice in 2023. And in 2024, at about $180. If you were going to look at a price target for
target, that’s where you might consider looking. So
Andrew Brill 18:08
those are those are your stocks for the week Nvidia and Nvidia also comes out with earnings on
Wednesday the 22nd. So target and Nvidia. The two winners of the week pretty much are both
reporting on the same day, and lucid group is there in the penalty box as John would say. So let’s take
a look real quick at the the indexes, the s&p, the Dow, the Nasdaq ALL intraday highs at one point this
week. So, you know, recession way off in the distance, so to speak, or maybe the stock market is just
saying, You know what, we don’t care about that talk. We’re just going to keep rolling. Yeah,
Justin Nugent 18:45
you know, Bloomberg recently reported an interesting divergence where people are feeling increasingly
more negative on the economy, but more positive on the stock market. This is something we’ve
reported in the past. And it makes sense, you know, because a lot of people don’t really get that. The
reason why the economy is under pressure, in part is because the Fed is putting it under pressure. But
by seeing some of these negative headlines, they might signal that inflation is beginning to abate, and
maybe the Fed takes its foot off the economy, and that allows everything to go hunky dory. One thing
that I would note last week in the rebel Roundup, I said that the retaking of the 50 day moving average
in all four major indices, the Russell, the s&p, the NASDAQ, and the Dow, all on that Monday,
combined with a bullish cross of the eight and 21 day moving averages. Were a sign that we were
going to all time highs pretty soon that’s exactly what happened. Why does that matter? Why should
you maybe consider putting that on your chart? From November all the way through April? The 8021
day moving averages stayed crossed bullishly. That means the eight is above the 21 and it was a sign
a signal to buy in. We went from about 435 And the spy up to about 510 in the spy without them ever,
uncrossing. Now they’re crossed again, in my opinion. All right, and I’m a lot more bullish than I think a
lot of people out here are, I would stay long the spy and the Q QQ, as long as that eight and 21 day
moving average is crossed bullish Lee. And as long as we’re above that 50 day moving average, that
allows you to tighten your risk, and allows you a pretty big reward. And that’s what we like to see as
traders and market rebellion.
Andrew Brill 20:32
And if you want to see those averages and how they cause you can go over to rebel research and take
a look, because that’s where I know that’s where you guys get a lot of information. It’s your own
package and your own your own statistics. And that’s how you can find out about all that stuff. Justin,
thanks so much for joining us here on next week on the trading floor. It was informational. And I think
that look, we’ll take a look at the stocks. We’ll know better on the 22nd when some of these earnings
come out for Nvidia and target and we’ll see if these picks are going in the right direction. Yes, sir.
Thank
Justin Nugent 21:05
you so much.
Andrew Brill 21:07
Thank you for watching next week on the trading floor. We hope you enjoyed the insights and forward
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