2/14/25 Live Trading Room Market Recap & Trades
As we know, SPX has traded in a tight range between 5825 + 6127, about a 5% move. We must not only break out above but also stay above to confirm a bullish trend. Even with positive price action, bullish option flow and TGA as ballast for the market, we are in earnings & VIX ‘clench’ while gyrating wildly on every Trump headline. Breadth has recovered in part and buyers have not stepped away allowing sellers to step in. We await the macro trigger to interrupt the clench. Will it be FOMC minutes next Wed? Not likely. Jobless claims Thurs? Someday it will trigger volatility. PMI Friday? Not expected to surprise. So we wait and we continue to trade the tremendous themes we have been given that are working.
EARNINGS:
ABNB - that, was amazing. So Thurs I picked my 2 fave longs + 2 fave shorts from the list of companies reporting afterhours. ABNB was $140 when I spotted, called out & wrote up the very big move I was expecting from earnings AND the very large bullish positioning - not in near-dated which doesn’t impress me so much, but the 2yr out ATM leaps. ABNB earnings & guidance delighted, with plans to invest $200-250M towards launching and scaling new businesses to be introduced later this year. The squeeze was just like I envisioned. It closed today at $161. Remember that trick: tight weekly bollinger band as technical play for explosive moves ;-)
DKNG - was the other bullish bet given the very positive analysis on YoY gaming/betting results that Client Justin shared with us in the LTR: “BAML is pointing out that Super Bowl was positive for operators. "The raft of data published around the Super Bowl looks strong. Ahead of the game. the American Gaming Association (AGA) had predicted ~.4bn would be wagered on legal channels on the Super Bowl, up a solid 12% YoY. This seems conservative 1) In New Jersey, one of the most mature US state, total handle (retail/online) event grew 19% YoY 2) This dovetails with FanDuel seeing 19% YoY increase in active bets 3) GeoComply data shows a 14% increase in active player accounts. Even better, NJ GGR trebled with a record win rate of ~15%.” So going into the print, DKNG had the advantage of a Superbowl bonanza for positive guidance. DKNG popped only 5.4% higher before getting chased another 10% intraday. Oh Lotto Friday!!
TWLO - I turned bearish because it had already run up beyond its skiis. It did exactly what I expected & wrote up: Tagged 151 and fell back to 123. Now? 120-113 wouldn’t surprise.
IRM - was not excited about this one for reasons detailed pre-earnings. I’m still bearish.
SWING UPDATES: