Good morning, traders…
So … what happened yesterday?
After Nvidia Corporation (NASDAQ: NVDA) handily beat earnings on Wednesday afternoon, the market initially rallied.
Futures were up, bulls were in control, and sentiment was high.
And for the first 90 minutes of trading on Thursday, that trend looked to continue.
Until it didn’t…
In a murderous rug pull, the Invesco QQQ Trust (NASDAQ: QQQ) dropped 3% in 90 minutes.
It tried to stage some comeback bounces in the afternoon, but couldn’t hold any of them.
The index closed down 2.3% in a tape that left many traders in a state of shock and awe.
This is how most traders viewed the possibilities heading into yesterday:
But there was another path (Nvidia beats, market still tanks) that 99% of traders weren’t even considering.
It’s yet another reminder that you must be prepared for anything the market throws at you.
Personally, I wasn’t so shocked. I knew this was a possibility.
That’s why I’ve been stressing the importance of hedging, selectivity, and relative strength over the past month.
The need for those warnings just got even louder.
The market just got sketchier.
My watchlist just got narrower.
I may sound like a broken record here, but I don’t care…
In a market as volatile as this one…
I’m ONLY trading Smart Money setups.
Let me repeat: I’m ONLY trading options contracts that institutional traders are betting enormous amounts of money on.
And right now, the Smart Money’s hammering these 5 contracts harder than any others…
GOOGL December 5 $300 Calls
GOOGL is a relative outperformer in a brutal tape for tech stocks.
The daily chart still looks gorgeous despite the down market.
Don’t ignore that kind of relative strength. When everything else is breaking down and one name holds its structure, you pay attention.
Another major catalyst: Warren Buffett taking a huge stake, for the first time.
The Smart Money worships Buffett (and will likely follow him).
When he makes a move this size, it creates a floor under the stock that attracts more buyers.
GOOGL has the setup, the catalyst, and the chart in its favor.
WMT December 5 $106 Calls
WMT is another relative outperformer.
It was green on Thursday. That’s the kind of divergence you want to trade.
This is a great counterplay with more defensive positioning.
When tech gets hammered, money flows into safer names like WMT.
Better yet, the company just dropped some banger earnings.
Walmart’s US sales increased 4.5%, it saw an uptick in customer trips to stores, and shoppers spent more when they visited.
Real consumer demand is showing up in the numbers (in an economy where consumer sentiment is struggling).
Walmart also raised its sales and profit guidance, signaling it expects a strong holiday shopping season.
Perfect timing, as the December $106 Calls position you for continued strength into the holidays.
TJX November 28 $149 Calls
TJX has a similar story to WMT.
Discount retailers make sense in the current economic environment. When consumers feel pressure, they shop at cheaper stores.
Solid earnings have bolstered this narrative.
The daily chart shows a beautiful, steady uptrend.
No wild gaps. No violent reversals. Just consistent higher lows and higher highs.
When fundamentals and technicals align like this, the setup becomes high probability.
CIFR December 19 $13 Calls
CIFR is breaking out of a long-term downtrend.
The stock spent months grinding lower, building a base, and now it’s reversing.
The chart shows CIFR sitting on a shelf at $14 with near-term upside to $17.50.
You’re buying at support with a defined target above.
When a stock breaks a long-term downtrend, the first move can be explosive. Shorts cover. Momentum buyers pile in. The move feeds on itself.
The December 19 $13 Calls give you about a month for the breakout to play out.
RIG January 16 $5 Calls
RIG has been in a steady uptrend since April.
The chart shows consistently higher lows building over months.
This is a low-priced name with cheap options that can move quickly.
But the technicals alone aren’t why I’m intrigued…
The Smart Money is betting BIG on RIG. There’s an INSANE amount of open interest on this strike.
132,000 contracts, with 89,500 of those recently added. That kind of institutional positioning doesn’t happen by accident.
The January 16 $5 Calls give you about 2 months for the setup to work. You have time for the trend to continue and for the open interest to drive price action as expiration approaches.
One more time:
When the market gets sketchy, follow the Smart Money.
How do you think I bagged these massive peak gains last month?
- +159% in 2 days on MRK*
- +49% in 1 day on GOOGL*
- +64% in 2 days on EOSE*
- +244% in 1 day on PYPL*
And turned $50 into $1,260 in just 2 months?*
We’re about to cover that (and more) in my 2-Day Simpler Options Bootcamp…
See you there.
*Past performance does not indicate future results. Not typical.
