Hey Traders,

Two down days in a row. Is that possible?

If you're a bull, you're loving this. The S&P gave back about 25 points across Wednesday and Thursday, which is essentially nothing, and in exchange the VIX got absolutely smashed.

The fear gauge closed near 15 on Thursday after trading as low as 14.83. That's a stone's throw from breaking into the 14s and staying there for a few days.

A 15 handle on the VIX says traders expect the S&P to move less than one percent a day for the next month.

It said that on the eve of a jobs report.

Then Friday happened. Payrolls fell by 23,000 in July against expectations for a gain of about 80,000, and revisions knocked another 103,000 off May and June.

That's a swing of more than 100,000 jobs away from consensus. It wiped a September rate hike off the board, a hike traders had priced better than 50-50 on Thursday afternoon. The 10-year yield dropped to 4.63 percent and the S&P traded right back at a record.

So the fear gauge sat at 15 into a number that flipped the Fed's entire path.

The market is consistently terrible at pricing risk it believes it already understands, and the same blind spot shows up in single stocks.

Here are two where it's already made up its mind, and it's only right about one of them.

Left for Dead in the 140s

Oracle (ORCL) is cheap. Do they have problems? Yes.

The stock is down more than 55 percent from its record close last September. S&P cut Oracle's credit rating to BBB-minus in July, one notch above junk, after free cash flow came in at negative $23.7 billion for the fiscal year and data center lease commitments piled up to roughly $260 billion.

That's the bear case. It's real, and it's why the stock got pounded. Here's what's getting ignored: Revenue grew 17 percent last fiscal year to $67.4 billion. Cloud infrastructure revenue grew 93 percent in the fourth quarter. The backlog sits at $638 billion, up 363 percent from a year ago.

Oracle also said it doesn't intend to issue more bonds this calendar year, which pulls the next round of supply fear off the table. Earnings aren't until the middle of September. There's nothing company-specific coming to knock this thing down.

I think it pops and makes a run at 150 or better.

A close back under 138 tells me I'm early and I'm out.

When a Beat Gets Treated Like a Miss

Sandisk (SNDK) had great earnings. They weren't good enough.

Revenue came in at $8.97 billion against about $8.4 billion expected. Earnings hit $39.25 a share against roughly $34.50. Gross margin printed 84.6 percent, up from 26.4 percent a year ago.

Then management guided next quarter to between $10.3 and $10.8 billion in revenue, and the street wanted $11.16 billion. The stock dropped 12 percent after hours and closed Thursday at $1,258.58, down another 6.8 percent on the day.

That's what a stock priced for perfection does when perfection doesn't show up. Sandisk is off about 47 percent from its June high while the mag seven names have already dug out from last week's selling. Memory hasn't.

Here's my specific problem with this one: Sandisk sells NAND flash, which is closer to a commodity than the last twelve months of price action would suggest.

Micron (MU) has DRAM and high-bandwidth memory, the piece of the stack the AI buildout can't design around.

If this sector rolls over, SNDK takes it worse than MU. I like this one lower, and the July low near 998 is the next real reference point on the way down.

What Goes on the Board Monday

Both of these names are on the list now. Oracle because the market has priced a credit event that hasn't happened, and Sandisk because it's priced a future its own CFO just walked back.

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