Coming into Thursday the market was coiling, and coiled markets go somewhere.
This one went up!
The S&P 500 broke the 7,750 shelf it had been glued to and closed at 7,798.99, a record, up 0.65 percent. Wholesale prices came in 4.7 percent higher than a year ago and nobody flinched. Oil dropped more than two percent, with Brent settling at $87.07 and WTI at $81.25.
Cheaper crude plus a shrug at inflation data is about as clean a grind-higher setup as August gives you. Now I want to see whether 7,800 turns into a magnet or a launch pad.
The Calendar Is Doing Me A Favor
Next week has almost no news and almost no earnings, with monthly expiration Friday the 21st. Everything lands the week after. Nvidia reports Wednesday the 26th and Jackson Hole runs the 27th through the 29th.
So I like being long the market next week, and I like being short VIX more than that. VIX closed Thursday at 14.63. The 52-week low is 13.38, and I think we go look at it before this expiration cycle is over.
A modestly bullish butterfly targeting 7,950 by next Friday is one way to play the drift. Just remember an index can sit still while the stocks inside it fight. The Mag 7 versus chips tug-of-war is alive, tech versus Main Street is alive, and that's exactly why there's something to love and something to leave every week.
Nvidia's Best Stretch Starts Monday
NVIDIA (NVDA) doesn't report next week. It reports Wednesday, August 26th, after the close.
That time leading up to earnings is where the opportunity lies.
Well-loved stocks drift higher into a big print, and this one's already doing it. NVDA closed Thursday at $225.30, roughly 18 percent above its mid-July low near $190, and call buying has been steady the whole way.
The company handed the bulls fresh material on August 10th when it announced financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR aimed at mobilizing more than $500 billion for AI compute.
The numbers underneath are loud. Nvidia guided to about $91 billion in revenue for the quarter, which would run roughly 95 percent above the $46.7 billion it did a year ago. The street sits at 36 Buys and one Hold with an average target near $310.
My discipline here is simple. I want the runway, not the landing. NVDA has finished lower after each of its last four earnings reports, and the options market is pricing about a seven percent move on this one against an average post-earnings move of roughly 2.8 percent over those same four quarters.
Traders are paying up for a swing this stock hasn't delivered in a year. Own it into the print and be flat before the bell on the 26th. If the tape grinds the way I think it does next week, NVDA is one of the names doing the pulling.
Exxon's Problem Isn't Exxon
ExxonMobil (XOM) is on the other side of the same market, and the company didn't do anything wrong. Thursday told the story anyway. The S&P 500 printed a record and XOM closed down 0.71 percent at $158.61.
The problem is crude, and specifically what crude is trading on.
Brent snapped a six-session rally Thursday and slid back under $87 as the market stopped pricing supply and started pricing demand. The IEA cut its global demand outlook this week, OPEC cut its 2026 demand growth forecast to 580,000 barrels a day for the fourth straight time, and US inventories built 17.4 million barrels in a single week.
The tape agrees: Exxon's all-time closing high is $170.31, set March 30th when crude was spiking toward $120 a barrel. Five months later the stock still hasn't retaken it, which tells you traders treated that spike as a one-off instead of a new floor.
Two more near-term drags. The stock trades ex-dividend Monday, which mechanically pulls $1.03 out of the price. And Washington keeps circling, with the administration complaining out loud about how much the supermajors are earning and a proposal floating to kill tax breaks on overseas production.
I still like Exxon long term. It earned $14.5 billion last quarter and it's buying back stock. Near term, I think it works back toward 150, and I'd rather own something with a tailwind for the next two weeks.
One honest warning. Hormuz is still a live wire, and any real escalation kills the demand story in an afternoon.
Monday Morning, One Name
That's my love and my leave.
The rest of the crew is doing the same exercise this week, which means 10 names hit the table Monday and only a few survive the conversation.
So what will the crew choose for the Ticker Highlight pick of the week?
Tap this link and pick your subscription rate and get Monday's pick as soon as it hits.
Your only option,
Mark Sebastian