BY ANDREW GIOVINAZZI

July 25, 2023

Yo Pit Crazies,

During the runup to the last tech earnings cycle, we were in our Chicago event. Licia and Voz were coming up with great trades, but the market sentiment looked kind of junky. 

Microsoft Corp (Ticker: MSFT) surprised everyone and it set off a mini-tech stock boom over the next quarter. Nvidia Corp (Ticker: NVDA) lit the fire next, and it was off to the races. There was considerable noise around rates and what the Fed would do.

Sound familiar?

MSFT 3 month chart with 3 day candles

I think we are walking into the same thing again.

Is history repeating itself?

VIX Was Not the Same After the Last Big Tech Earnings

For the most part, VIX has been on a downward trajectory since mid-March, but really year lows since Big Tech crushed it. Lower VIX is generally bullish – that’s a long observed correlation.  

Right now, notice the current VIX is just upward trending. That should continue until Wednesday when the Fed announces the next rate hike.

VIX 6 month chart with Vol Man drawing highly technical lines

But MSFT will announce earnings today, and that’s more than enough to get the crush going for VIX. If the earnings are good, I expect new yearly lows for VIX by the end of the week. QQQ might become unstoppable after the selloff of the last few days.

The Rundown

Option Shopper

US Oil Trust (Ticker: USO) Jul28 68 calls closed for a 44% gain 

Nitro Trader

MSFT, Apple Inc (Ticker: AAPL), SPDR S&P 500 Trust ETF (Ticker: SPY) Jul21 320/310 put spread, 180 puts, 445 calls closed for a 9% gain 

Trading Desk

ProShares Ultra VIX Short Term Futures ETF (Ticker: UVXY), SPY Jul21 18 put, 435/427/419 put butterfly closed for a 2% gain

Win the Week

Invesco QQQ Trust (Ticker: QQQ), Microsectors FANG ETN (Ticker: FNGS) Jul28/Aug18 375/374 put spread, 36/34 put spread closed for a 55% gain

Power Income Trader

ExxonMobil Corp (Ticker: XOM) Sep15/Jul28 105 call calendar closed for a 39% gain 

Market Vectors Junior Silver Miners (Ticker: SILJ) Jul21/Jun30 10 call calendar, 9.5/10 call spread closed for a 77% gain

To Your Trading Success,

AG