November 9th, 2025 | tastylive's First Call

Key Concepts

Generational Snowstorm: A severe weather event anticipated by the speaker.
Government Shutdown: A prolonged closure of government operations, mentioned as being on day 40.
Price Action: The movement of market prices over time.
Equity Indices: Stock market indexes like the S&P 500 and NASDAQ.
VIX (Volatility Index): A measure of expected volatility in the S&P 500. A "V crush" refers to a rapid decline in the VIX.
$2,000 Stimmy Checks: Proposed government stimulus payments.
Tariffs: Taxes imposed on imported goods.
AI (Artificial Intelligence): Technology discussed in the context of job displacement and market impact.
Capitulation: A market event where investors sell assets in panic, often marking a bottom.
Mag Seven Stocks: A group of seven large-cap technology stocks.
AI Circular Funding: A concept describing money circulating within the AI ecosystem.
IVR (Implied Volatility Rank): A measure comparing current implied volatility to its historical range.
Short Put Spread: An options strategy involving selling a put option and buying another put with a lower strike price.
5 DTE (Days to Expiration): Options with five days remaining until they expire.
Technical Tenants: Underlying principles or patterns in technical analysis.
Moving Averages: Technical indicators used to smooth out price data.
Long Lower Wick: A candlestick pattern indicating buying pressure after a price decline.
MEES Position: A long position in the S&P 500 E-mini futures.
Short Premium Positions: Options strategies that profit from the decay of time value.
Call Skew: A situation where call options are more expensive than put options, often indicating bullish sentiment or demand for upside protection.
EPS Surprise: When a company's earnings per share exceed analyst expectations.
Fed Day: The day of a Federal Reserve monetary policy meeting.
Dovish/Hawkish Fed: Refers to the Federal Reserve's stance on interest rates; dovish suggests lower rates, hawkish suggests higher rates.
Jobless Growth: Economic growth that does not lead to job creation, potentially driven by AI.
Non-Bank Credit: Lending provided by financial institutions other than traditional banks.
Iron Condor: An options strategy that profits from low volatility.
USO Put Verticals: A specific options strategy on the United States Oil Fund.
Natural Gas (Natty Gas): A commodity discussed for its volatility.
CPI (Consumer Price Index) / PPI (Producer Price Index): Inflation indicators.
Retail Sales: Data on consumer spending.
Recession: A significant decline in economic activity.

Weekend Recap and Market Outlook

The speaker begins by describing a weekend that included social gatherings and preparation for a significant snowstorm. They also touch upon personal sports team outcomes, noting a "disgusting" but welcome win for the Bears and a surprising win for the Jets. The conversation then shifts to the broader market context, highlighting the surprising price action on Friday, characterized by a strong reversal in equity indices and a "V crush" in the VIX, falling below 20. This volatility decline is seen as a signal of potential positive news.

Government Shutdown and Stimulus Checks

A significant portion of the discussion revolves around the ongoing government shutdown, now on day 40. The speaker expresses surprise at the price action on Friday, linking it to potential news regarding the shutdown and the possibility of $2,000 stimulus checks. The effectiveness and purpose of tariffs are questioned, with the speaker sarcastically suggesting they are a cure-all. The idea of tariffs being removed or reduced is identified as a potential bullish catalyst.

A key point is made about the $2,000 stimulus checks requiring an act of Congress, which is currently inactive due to the shutdown. This leads to an interesting perspective: President Trump might be using the stimulus check idea as a political maneuver, claiming he would have sent them if not for the shutdown, thus winning either way by blaming Democrats or the shutdown itself.

Market Open and Performance

The markets are noted to be opening strong, with the S&P 500 up 0.6%, NASDAQ up 0.8%, Dow Jones up 0.5%, and Russell up 0.77%. Crypto markets also saw gains, with Bitcoin up 1.5% and Ethereum up 3%. Gold and silver are described as experiencing "sideways chop," with gold hugging the 4,000 mark and silver slightly higher. Oil prices are up but hovering around $60 a barrel, and natural gas has had a good few days, showing high implied volatility.

Equity Market Analysis and Trading Strategies

The discussion delves into the equity market's reversal on Friday, specifically the VIX moving from 22 down to 19. The question is posed whether this indicates a local high and an opportunity to "buy the dip" or "sell puts." The speaker's positioning is to "ride the wave" and they are already long an ES (S&P 500 E-mini) position.

For potential trading opportunities, a short put spread is suggested for the NASDAQ, targeting a level around 6650 with a 70% probability of profit, though the risk-to-reward ratio is noted as less than ideal. The idea of buying dips in the 3-5% range is considered viable, especially after the recent correction that has "taken out some of the fluff" from lower-tier stocks.

AI and Market Sentiment

The impact of AI is a recurring theme. The speaker notes the "circular funding" within the AI ecosystem, with significant capital circulating between companies like Oracle, Coreweave, and Intel. This has led to a perception of endless announcements and partnerships.

The recent market correction is seen as a positive development, having "scared the children" and potentially removed froth. Nvidia's significant move down is highlighted as a "buyable" or "tradable opportunity." Microsoft's potential range between $490 and $555 is also discussed.

Earnings and Tesla

The earnings calendar is described as thin, with Cisco and Disney being the notable reports. The expected moves for these earnings are relatively small (around 5% for Cisco and 7% for Disney), suggesting that much of the volatility might already be priced in. The speaker's experience with recent earnings has been "buy the rumor, sell the news," with many stocks opening within their expected move.

Tesla's approval of Elon Musk's $1 trillion pay package is discussed, with the speaker viewing it more as a headline than a practical issue due to liquidity constraints. While Tesla has rallied to new yearly highs, it's not considered as compelling a trade as Nvidia going into earnings.

Market Concerns and Fed Policy

The primary concern for the markets is identified as the Federal Reserve, particularly "Fed day." The speaker suggests that the end of the government shutdown might increase worries about the Fed's future actions, potentially leading to a more cautious stance and fewer rate cuts.

The impact of AI on job growth is a significant concern, with the speaker suggesting it could lead to a future where markets are "subsidizing demand" due to AI-driven job displacement. This could create a scenario where the Fed becomes more dovish as AI succeeds, leading to higher stock market returns but also potential economic instability due to jobless growth.

Sentiment Shift and Risk-Reward

A sentiment shift is observed, with positive earnings surprises not leading to upside follow-through, while negative surprises are punished more severely than historically. This is seen as a sign of potential market exhaustion. OpenAI's request for government backing and Palantir's CEO's strong stance against short sellers are cited as indicators of this sentiment shift.

Low Volatility and Commodities

In low volatility environments, opportunities can arise for more creative options strategies. Bonds are being traded with short puts around the 116 handle. Oil is described as being in a range, with no strong directional lean. An iron condor strategy on oil is mentioned as potentially viable, even with a low IVR, if the risk-to-reward is favorable.

High Volatility and Natural Gas

Natural gas is highlighted for its elevated IVR (45%), despite a significant recent run-up. The speaker typically waits for input from a colleague before trading natural gas. The upcoming "Futures Power Hour" sessions are mentioned.

Economic Data and Recession Fears

The upcoming economic data, including CPI, PPI, and retail sales, is anticipated to be "terrible." The key factor determining market direction after Fed cuts is the presence or absence of a recession. If the Fed cuts rates for negative reasons (e.g., a recession), the market may react negatively.

Conclusion and Trading Strategy

The overall sentiment leans towards a short-term bullish outlook, especially if there's a positive headline regarding the government shutdown. However, the speaker expresses caution about upcoming economic data, which could reveal a recessionary environment. The focus remains on price action as the ultimate indicator of market sentiment. The show concludes with a reminder of upcoming programming and a good luck message for overnight trading.