Better Get Your Helmet On

Thursday’s dip buyers never really showed up. This early in the earnings season, that’s a bit of a problem. It sheds some light on how investors are viewing earnings, even positive earnings, relative to their current positioning. For example, WDC beat and guided well above estimates, yet it’s down 3% in today’s premarket. Be on the lookout for more of the same. The AI stack promises to present some tough sledding through the near term. Long term, nothing has changed, but those active traders looking to engage the long side for quick chops should tread carefully. Long-term holders might even want to look into some covered call writing strategies to mitigate what could be a pronounced slide.

Bloomberg reports that SPCX is in talks to lease 80,000 cell sites to build Starlink into a fourth national carrier. Cell tower landlords are up on the news (CCI, SBAC, AMT), but the incumbent carriers (T, TMUS, VZ) are shaken. We’re not sure if the SPCX threat to them is quite existential, but it is apparently very big and advancing more quickly than most expected.

Jesse Livermore, the famous Depression-era trader, admonished his contemporaries to be as ready to trade the short side of a market as they are to trade the long side. Setting aside how he ended, his point is well taken in times like these. Smaller commitments, made to either side of the market, seem more likely to produce results, modest though they may be. Covered calls are one easy way to smooth out some of the volatility that promises to persist through this earnings season.

There are always some fascinating one-off trading opportunities shaping up. Keep an eye on our trading board for those setups as they emerge in real time.