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Stocks finished the day lower as implied volatility surged ahead of Nvidia’s earnings. The VIX 1-day jumped to roughly 19.5, significantly higher than yesterday’s level of 13. There’s not much more to add, except that volatility is likely to drop sharply tomorrow, potentially providing a slight morning boost to futures. However, I wouldn’t expect this to result in a significant market move.
I could see the index rising to or above the 5,920 level, given that we saw that sell-off into the close.
In terms of Nvidia, it was a messy quarter with plenty of “could-haves” and “would-haves.” Only in the stock market does one get rewarded for that, because in real life, when we say we could have done this or that, it’s usually because we didn’t, and the outcome wasn’t favorable.
If I could only sing, I would have been a rock star. If there were no export exemptions in China, we could have had more revenue in the second quarter.
The after-hours market is focusing on these hypothetical scenarios and what might have happened without restrictions. For now, the critical point is whether the bulls can hold the $140 level, which is the call wall. IV will undoubtedly drop significantly tomorrow, causing many calls to lose considerable value.
I’m not sure if the stock will hold above $140, as it’s currently trading at around $140.50. If it breaks below $140, we’re likely looking at a potential decline below $130. Unfortunately, we might not have clarity on this until tomorrow’s close.
There is a sizable gap to fill at $131, and below that, there is essentially no support until you reach the gap at $116. So in my view, $140 is of the utmost importance. Nobody is suggesting that anything happens in a straight line or all at once, but rather a destination over time.
More importantly, at this point, the results probably don’t change any of the main themes in the market that I have been focusing on.
Finally, I don’t think President Trump is a fan of TACO Tuesday, now that he knows investors are laughing at Trump Always Chickens Out.
We will see what happens tomorrow.
-Mike
Terms By ChatGPT
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Implied Volatility (IV):
The market’s forecast of how much the price of an underlying asset (such as a stock or index) might fluctuate. Higher IV indicates greater expected volatility and typically raises option prices.
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VIX 1-day:
A measure of the expected volatility in the S&P 500 index specifically for the next trading day. A higher value suggests higher expected market volatility.
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Call Wall:
A significant price level in the options market characterized by a large concentration of call options. This level often acts as resistance, as market makers hedge positions, influencing stock price movement.
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Export Exemptions:
Specific regulatory exceptions allowing a company to sell products internationally despite broader trade restrictions or tariffs.
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Gap (Gap Fill):
A price range on a chart where the asset trades significantly above or below the previous trading session’s high or low, leaving an unfilled area. Markets often “fill” these gaps later by moving back into the gap area.
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Support:
A price level where a stock historically stops declining and begins to stabilize or rise again due to increased buying interest.
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After-hours Market:
Trading activity occurring after regular stock market hours, often following earnings announcements or important news events, typically characterized by lower liquidity and higher volatility.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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