One Stock Is Holding Everything

追加: 2026-06-02

[00:00:00]Hello folks, Brandon Chapman with Zeo Trade today. It's our June 1st video and boy, the S&P's higher but barely. If you look at the uh performance today, it's only technology and energy which are uh really performing better than the S&P, keeping us in the green. And when you look at the top performing stocks here in technology, it comes down to Nvidia, nearly plus 6% right now, was up over 6% at one course one point during the day, uh fading just a little bit. Of course, the news well, yes, we're going to partnership with uh Microsoft. So, MSFT, we're going to make they're going to make a uh PC uh powered by Nvidia, you know, basically having an AI on your own desktop or the capability to do that sort of compute.

[00:00:44]Whatever it whatever it takes. At this stage, as we look at the S&P 500, SPY, if we go to a weekly chart here, we've had what? 1 2 3 4 5 6 7 8 9 consecutive weeks in the green.

[00:01:00]And you'll see we're just barely poking above today. Again, all backed by the news for Nvidia and virtually everything else is in the red. Of course, utilities really getting slammed today. And this is a point is that uh we saw really, you know, back on uh um back in March, a rotation from the S&P, sorry, from the XLU back to the S&P, that's done fairly well. It's actually April 6th, that week right here, uh where it said, "Hey, rotate back, sell XLU, buy SPY." And that's really done well as XLU is dropping today. And then when you look at bonds, TLT for example, this is a 20-year bond fund, we gap lower, we rallied here. Uh one of the biggest threats to bonds is probably the fact that dollar yen is pushing towards 160, but it does it today, we're not seeing that reversal, we're not seeing the intervention, but we're edging closer and closer to a point where they might.

[00:01:54]And this could create a lot of issues for the market generally and namely bonds, right? Bonds sell off here if the Bank of Japan, for example, if they got to sell treasuries, US treasuries to raise dollars, convert it to to Japanese yen and somebody say it again.

[00:02:09]Converting it to yen, we're going to see the dollar weaken relative to the yen and we could see again assets tied to that kind of carry trade unwind.

[00:02:19]We'll have to see. There's a lot of stuff kind of really kind of affecting the market and we just take it just takes these big announcements every day just to keep the market riding higher and the breadth is deteriorating day by day by day. Fewer and fewer stocks participating. Most stocks in the S&P 500 are below their their 5-day, their 20-day, their 50-day and 100-day and 200-day moving averages are at least 50/50 at best. There's not a lot of breadth to this rally. Now again, people say, "Well, what does it matter? The market's going to go higher." Yeah, I guess so. If you can fuel enough movement in stocks like Nvidia and technology, these mega cap stocks, yes, the market can move despite it. As we look at DSPX, dispersion broke out big on Friday. We're seeing it continue today. And today's a perfect reflection of that dispersion where basically it's buying calls on Nvidia and just selling options on the S&P 500.

[00:03:16]That is the one way trade right now and we'll see how that how that does until we hit the SpaceX IPO coming up here in a little bit over a week. Man, so many changes to traditional rules. I mean, they're going to really push that to be able to see funds have to invest, passive funds, as it's going to be listed after 5 days, the lockup date number of days has diminished to like the first earnings announcement. Just so many firsts in that SpaceX IPO that really just centers the risk on the retail trader and those that are invested in passive funds. So, it's just not an amazing thing. But, we look at banking institutions like KRE, there was significant put activity last week on KRE. Uh we took a trade trying to get out of it today. Uh was up about 40% we're kind of backing off it at the moment. We'll probably carry it another day, but what you're seeing is that traditional lending as we look at Visa.

[00:04:08]I mean Visa had a nice down day today.

[00:04:10]We tried to break out the other day, popped up, faded yesterday on Friday rather. You should look at MA for example, we're not really angling that well. I mean think about this, right?

[00:04:20]These companies they make money based on the dollar amount of what you buy.

[00:04:24]Higher inflation shouldn't affect them.

[00:04:27]But the reality is consumers are pulling back cuz we look at the Walmart for example. Walmart after its earnings down significantly, very overvalued up and we're seeing it come back down to earth at least a little bit. But the point being is that the consumer is not strong in this. And as you look at a lot of consumer credit companies, uh you look at Walmart, it just shows that there's strain on the consumer. And really the stocks that are performing well are the companies that don't actually make anything like Nvidia. They basically what? Design stuff, have somebody else manufacture it. And to the extent those higher costs get passed through, I'm not sure. And obviously Nvidia and uh we have uh uh um you know, with Elon Musk, I mean their marriage there, I mean you have the Michael Burry stuff coming out. There's so many stuff happening right now that could move the markets. But at the moment, if you think this market is about really positive news kind of driving stuff, understand there's also other stuck stuff impacting the market.

[00:05:28]Namely, we talked about gamma exposure.

[00:05:30]The key level today 756, we're pinning there. I laid out a strategy earlier today during my session in the main chat room on TheoTrade. We're looking for a break above the opening range high for example, a pullback and a higher low. We just never attained that. We ran, we pulled back, we caught a bounce right there. I took a long trade, was able to close in Sorry, took a long trade there on the bounce and breakout here.

[00:05:55]Um was able to get out in the strength for a 50% gain on that move. And guess what? The next major node was a 760. Notice how we're breaking down from that point at this moment. It just shows that a lot of the structure for the S&P is holding. Yes, Nvidia is able to move it off its market at 756, but only carried it back to its its gamma, you know, kind of call wall at 760 that we're now backing off at the moment. We'll see if we can gap above 760 tomorrow. Is there going to be a news new set of announcements, other news come out that's going to pop us above, or do we start to break 755?

[00:06:34]And boy, you start to break 750 right now, we start to really start to crack a crack open the downside volatility risks of the market. Now, a lot of people are talking about the lack of hedging that's going on right now.

[00:06:47]You look at the skew index, it's actually picking up to 144 as the VIX is declining. We're We're trading We're trading below 16. We're trading at 16 today.

[00:06:58]So, we are starting to see the drop in the volatility causing skew to rise, which represents the tail risk of the S&P, but also that incremental just buying that you see, the steady drip of upside as puts are being bought, and it just drives the market up incrementally.

[00:07:17]So, remember, the skew has two sides.

[00:07:19]Yes, crash risk, but on the other side of it, the mode is greater than the mean. You have above average days, high frequency of those days. We keep seeing the market grinding higher to an apex here. So, phenomenal moves, unprecedented levels of activity happening right now. And again, when is this going to come back to Earth? We'll see. And again, so so you know, Elon Musk and SpaceX, they've been able to land those rockets, but we'll see whether the rocket that is SpaceX is going to be able to land post IPO.

[00:07:49]They're doing everything they can right now to spread the risk around, provide an the lockup of those that have been invested in SpaceX cannot divest themselves. That's being you know, they're going to be able to get out of those positions earlier than normal after the first earnings announcement.

[00:08:05]So again, there's a lot of stuff happening that are unprecedented that are trying to keep the market engine going. And so far so good for parts of the market. You still see higher beta names SPHB generally moving higher. I mean, some of those today that that were in a block hunters RXRX. You just like, "Okay, I decided to take profits today."

[00:08:26]Why? "I wanted to roll this thing." The problem is the $4 calls were so expensive relative to 350s that there was not an advantageous roll.

[00:08:36]So I'm like, "Look, why put square pegs around hole? Why not just take profits in RX for near for close to 100% gain in let in about a week." So that's what we did today. I mean, the realities of the market is that areas are becoming increasingly more hostile to be able to take risk. Intel, that was exactly what happened back here on the 8th of May.

[00:08:58]The same type of situation. And so we're sitting back right now again. Do you keep trying to ride the wave of stuff like Nvidia that's up 6% right now? And boy, you know, you look at the amount of activity today. You come down here to option statistics. We're double the 5-day average. We're seeing a slight buying of calls, slight selling of puts bias.

[00:09:21]But again, you reach a point where it becomes really, really hard to speculate and buy calls in names like Nvidia. And we may analyze that tomorrow in the main chat room, but this bounce today purely driven by what? News? And now And again, what kind of benefit is it going to really provide for Nvidia?

[00:09:39]Again, at this stage it's just about the news cycle that's driving things. And despite stronger oil prices today, we're looking at 4/CL, we're catching a bounce. You saw an institutional rotation on Friday into oil-related names. You're seeing a continuation of that today in XLE. Yes, we're kind of fading from the high, but there were some big trades in XLE today.

[00:10:03]Big prints, block trades, buying the 63 calls, buying the 65 calls. Nearly 20,000 contracts right there. Just a whole kind of buy-side bias on the call side for 63 for July 17th and June 30th.

[00:10:19]So again, the institutions are wading back into energy. We're seeing that little lift today. Again, can we get a further upside to 63 in XLE? I think it's a very reasonable possibility in the near-term retesting prior highs up here. So again, there are stuff that may be strategically in a great position.

[00:10:37]Again, especially if the Persian Gulf scenario doesn't play out positively or doesn't doesn't come to you an end quickly, you could pretty readily see a swing up here to 62-63.

[00:10:48]And the structure of oil futures right now in backwardation just is representative. I walked through this on Friday. The The upside The upside risks are substantial as we get towards towards each futures expiration. And I think today kind of reflects that upside potential. It's just going to be very, very difficult on any news to see oil go south of 85 just because the structure is so favorable to the upside. We're basically priding pricing in shortages. This is the This is the curve on March 6th. It's steepened today from Friday. We're kind of looking a lot might like March 6th right now. Oil spike to 100 and then the next day spark to 125. So again, upside risks remain in oil right now. A spike back up to 110 would not be unreasonable here getting back to prior highs given a structure. So, folks, at the end of the day, there's a lot of risk surrounding the market right now.

[00:11:44]All you can do is try to trade, find areas or pockets of strength or momentum, and again, identifying significant option activity is one way to drive that, but number two, selling into strength, taking profits at reasonable levels at targets is another way to manage that risk, but overall, just having a little bit bigger cash position or planning to be able to build that.

[00:12:07]Well, folks, that's our video for today.

[00:12:08]Have a great one. We'll see you back next Monday. Thank you.