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[Music] today's market call is presented by Robin Hood Robin Hood's Financial tools put you in control to trade invest and earn your [Music] way a frusty January 7th here on the East Coast one o'clock on the East Coast the off four mention Market call Swizzle Dan Nathan the audience together hi Dan what's going on with that head of hair of yours man because uh it's it's pretty interesting I know we're going to get a lot of questions in the chat they call this a mohawk yeah people get get in there and see what uh you

know guys should be doing with that head of hair by the way you mentioned Frosty you know guy you always get Frosty when you see me wearing one of the Wall Street vests like I'm wearing right now and you just look like way underdressed for this weather I'm just gonna give it to you right now um but you're golf I mean apparently it's it's you know without I just saw that we're changing the name of the golf of Mexico to the GOL of America and what I put on the Twitter is if he was really

creative he would call it the golf of America go LF and then build courses all through the Florida Keys it be effing genius yeah but that's something we're here to talk about Dan no no no we here to talk about the market yeah I don't know if you mentioned this and you guys got to go check out our main man Doug Cass from CB Capital he is a prolific writer for the street pro.com um he he laid out a pretty cogent reason why we might see a market top here in January of 2025 lots of

good stuff there but guy I think at the Crux of that at the Crux of that is what's going on with rates and this is something that you've been talking about for a while you've been a lonely you've been on like a Lonely Island I like being on an island you know what I'm fine with it's like derell Rivas you know he used to be out on an island island sure he was tasked with covering the stud wide receiver of the opposing Squad and I have no problem with that as well by way Moss who

knows it you know exactly the Randy mosses of the world the the oo cinkos but you know what you learn when you're out there on the island is every once in a while you're going to get burned but you have to have a short memory and you know I say that actually half and just half serious because it's true with what we're trying to do each day as well and they're going to be days that you look like a complete jackass which is you know part for the course for me and then going to be

other days where things start to sort of play out the way you sort of thought they would and and I'll say this for about the hundredth time you know there are people out there that mistakenly believe that somehow the Federal Reserve controls interest rates they do not and if you ever needed proof positive I mean look at this chart look at where we troughed in terms of yields it was September of last year think about when the FED started to cut rates it was in September of last year and since that time rates have gone

o up over 100 basis points now given where were trading I mean that is astonishing and I think it's caught a lot of people by surprise and a very one-dimensional way of thinking you know if the FED controls things rates should be lower but the exact opposite is happening and I think it's happening for some of the reasons that I've been concerned about for a while and I'm not saying I'm some great prognosticator here but you know you start to read the tea leaves and say there's a problem with rates going higher it does not

suggest that the economy is doing that much better it suggests something else and you know there have been a couple days over the last month two months where the market has picked up on that but it's only been a couple days now maybe today is the start of something maybe magically 470 is a level that people going get concerned but I think we're right to start the show with interest rates Dan yeah no doubt and and by the way we're going to get to some questions we're also going to have a couple trade ideas we're

going to look back on a trade idea in The XLE that we uh kind of detailed using a call spread in February expiration we're also going to look at a name that guy um is starting to kick the tires on that would be the Exxon Mobile obviously the largest component uh within the XLE but we have a kind of short V trade there that um I think lines up pretty well especially with some of the technicals guy that we're looking at but to your point about 47 okay let's just and I think we made this

point yesterday on Market call and if you were to Overlay the 10-year yield versus the S&P 500 you see when late 2023 when we kissed that 5% 10-year um you know we had an S&P that had been actually selling off okay opposite of what yields were doing and the S&P I think was you know it it got close to 4200 or something like that here we are you know just south of 6,000 or so and if we are on our way to 5% and this is what doug kind of lays out for a whole host

of other reasons we can talk about valuation of the um of the uh S&P versus that of you know we can talk you know we've talked about Equity risk prevum Doug's done a great job with that um but we're getting to a point where things kind of look unsavory guy and I'm listen I am not starting out 2025 as a raging bear I'm just not I'm going to try to find some things that make sense whether it's sectors we talked about this um yesterday on the tape and on Market call a little bit but you

know someday soon this is going to matter the thing that you're talking about here with yields when people finally get to the point that higher for longer is a thing because you know 2022 when we started selling off in late 21 into 2022 I think a lot of folks what were they pricing in as far as rate hikes three four five you know what I mean and we got up to four and a half percent in the FED funds rate it's fascinating um and I think your point earlier about where the S&P was the last

time rates were sort of approaching these or through these levels on the upside and you know Amanda can throw up an S&P chart over that same period of time I mean you can see it for yourself we were decidedly lower now you know it's not one for one we're not suggesting it's just that simple there are obviously other factors at work but you know rates to me are you know one of the biggest factors if not the biggest Factor factor in terms of trying to assess where the market is in terms of valuation and what

the headwinds or potential Tailwinds are and higher rates suggest they're going to be significant headwinds for a lot of these names and you know you're looking at that chart now I mean you know that that overlay right there I mean in the fall of 2023 you had an S&P to your point Dan which was you know just north of 4,000 and it's been basically lower left upper right ever since and I don't think either one of us is suggesting that if we were to get to 5% we'd be lying at the 4200 but I do

think there's an inevitability to trade down to the 150 day moving average and then we're going to start having conversations about you know what is this year setting up and what are people really looking for and can we see 14% earnings growth and do these valuations make sense against this backdrop of higher rates and oh by the way there are a lot of other things going on and again not getting political although I started with that little bit of a jab I mean obviously it seems like the incoming Administration might be digging their heels in

a bit on the teror front and maybe as much as people thought it was a negotiating tool maybe it's part that but maybe there's some truth behind it as well so you know the Market's coming to grips with a lot and it's seemingly coming to grips with it today yeah so one thing i' just say is on the yield thing and then on the dollar so if we could pull up the Dixie the US dollar Index I mean we see what's going on we know that you know some of these other currencies are very weak

especially Japan um China but the Dixie is largely made up of you know stuff x uh Asia right when we think of the Euro and and and probably the yen in there and you know when you think about this and you think about what you just said about 14% expected earnings growth year-over-year that's per fact set you know you have to say to yourself at what point does the Dollar weigh on the strong dollar weigh on us multinationals what point does higher yields kind of weigh on smaller cap stocks a lot of folks have been

waiting for that trade to kind of kick into gear and if we can just pull up the Russell 2000 um for a second that was the early beneficiaries right out of the gate after um the election but then gave a lot of it back right and so when you think about that because a lot of the policy was meant to be or at least was thought to be was going to be inflationary look at that it filled in the entire Gap and now it's sitting right there on that 150 day moving average so from a

technical perspective it looks bad it acts badly and so to me if you're waiting and Doug's been talking about this for this broadening out it ain't happening it's still in the hands of the Fateful eight and when I see every other day up one and a half down one and a half up one and a half and the NASDAQ it tells me the volatility bands are widening I just want to pull up the vix here for a second guy because this is something that you highlighted yesterday we have a 17 plus vix right here you

saw that Spike you know right after the FED meeting in mid December I think it was December 18th we had that really unusual Spike and that August 5th um downdraft here you said yesterday you think it's going to be a thing give me your take on the vix and then I'm going to give you a little bit of what the Spy is pricing as far as volatility terms between now and the end of the month when we do have the next fed meeting yeah I mean I I don't want to get too In The Weeds

on this one but something I've thought for a while in terms of the vix is the dampening effect that fed policy historically has had and you know people have come to the realization that you know although the market go down for a day or two it doesn't stay down and with that said there's no reason to be buying volatility under those circumstances because historically that's been a bit of an insurance policy and not only NE you don't have to buy it anymore you can actually start to sell it and create a synthetic dividend for yourself

which I do think a lot of people have put in place and you saw how painful that could be back on August 5th and to a certain extent you saw it in December 18th and the 27th but I think as rates continue to go higher you know I do think this is going to be year where volatility surprises people uh on certain days and periods of time to the upside and I'll stand by that and I thought that by the way uh as we got into the summer and that proved correct obviously in early August

I was surprised how quickly it came back down but I don't think the whole V trade is over and I do think there going to be people out there that going to start to take advantage of these depressed volatility levels uh and look to actually play valve from the long side so my point is I don't think that fed put is in place the way it was before and I don't think although the market might think there's a safety net below them I think there's anything but a safety net and I do think volatility is

going to be a thing and by the way we mentioned the dollar John Hutton asked a question about he'd love our thoughts on the US dollar so if we quickly pull that dollar chart up again you know what's what I think could be really interesting this year Dan and this is going to be completely non-consensus but you know the dollar clearly has been strong I get it but this is also uh a a past president incoming president that has openly talked about his want for the dollar to actually be weaker and the dollar was too

strong which if you think about it sort of flies in the face of what you would think but you know in terms of the amount of debt we have and the problems we have it actually makes a lot of sense so I think this is an incoming Administration that might openly talk about the strength of the dollar and not wanting to see that and I think the dollar weakness is something this year this could surprise people so you could have a scenario which economically doesn't make sense and historically in terms of the math doesn't make

sense but rates continuing to go higher and a dollar that actually starts to give a little bit back which I think opens the door uh for gold and some of these other trades we've been talking about so John Hutton that's my quick two cents on the US dollar Dan yeah I mean my sense is that if you think guy that rates are going to continue to go higher maybe establish a new uh range above that 5% or so I I just don't see the dollar coming in a whole heck of a lot when I think

about the dollar strength I think about yields going higher and I think about the potential for that 14% earnings growth that is embedded in the S&P 500 which is within a couple percent of its all-time highs that is a cocktail for higher Equity volatility and it also sets up a scenario where if there's any surprises out of the fed you know we have that Jan 30th meeting if there's any surprises out of the Fateful eight and what they have to say about capex what they have to say about uptake of all this capacity that they

have built out for all these other Industries right to kind of rent the compute as it relates to generative AI we're going to get a good sense of all of that in the next few weeks and you know I let me drive here for Amanda let me go to the Robin Hood Legend guy I'm going to be a legend here for a second well I mean why wouldn't you be why wouldn't I so here's the thing here's my main page right and this is how easy it is to kind of Click through this thing I'm

going to I have the Spy up here so I'm going to go to the Spy um let me change this thing I'm gonna go to a onee chart here um you see that Rising 150-day moving average that's been a nice uptrend you see us grinding right here so you know like we highlighted this point about the volatility bands kind of widening you know here's a three-month chart and you just see those daily moves they're much bigger than what we've seen you know what I mean like on that slow move higher that we saw November you

know post election that sort of thing and you have that huge move right after the FED meeting well when I think about the Spy I like to price up what it's implying right in and around events so we know that that last week in January is going to have that fed meeting on January 30th it's also going to have a whole host of the Fateful a of their earnings right and so again that goes back to what do they have to say about capb what does earnings growth look like what does the current guidance look

like what can people impute about 2025 and I think if there's any disappointments there so here's how I figure out VA and what the expect movement is I'm going to the um I'm going to the uh options chain here so I'm going to click on J January 31st it's not a regular expiration we know those are the third Friday of every month so here it is straing about 592 right so I'm going to kind of go to this 592 strike gen 31st and I'm going to look at the call Premium that's about 944 I'm going

to look at the put premium it's about eight bucks here you put that together you get about 17 and a half how do I figure out the implied movement in the Spy I take that 17 and a half uh premium that is the at the money straddle okay the call premium plus a put premium and I divide by the strike 592 it gets me about 3% that is the implied movement between now in January 31st and we have all those catalysts and we also have an environment where the volatility banss are widening in the index

a little bit we're starting to see some and we're gon to get to some of these big names and some of the moves that we're seeing and I say to myself okay if I'm looking for put protection over the next few weeks it costs me one and a half% that's half of the implied movement it's half of the straddle that looks pretty reasonable if you think about that guy we could get one and a half percent in a day 100% And you know the skew Works to your favor on this one as well if you

just look at in terms of the call put skew which is you know probably coming in a bit but it's still obviously skewed towards calls people are will in other words people willing to pay more for the calls at a certain level than they are for the puts which you know is made sense given what the trajectory of the Market's been so you got that working for you as well and you know I agree there's still some um there's still some Runway left to the end of the month and I don't think it's I don't

think it's crazy to think we could see a move of that magnitude so to me that's something you that makes a lot of sense especially given some of the things we talked about we haven't even mentioned Nvidia yet today but we will obviously because you know we're not trying to bury the lead but that's one of the uh leading stocks today in terms of what it's done and what it's done uh today and what we've seen over the last year or so historically yeah we definitely buried the league gu Just One Last Thing Before we

get to some of these uh big stocks here look at the CME fed funds tracker and you know when you see this sort of thing right you see that 93 94% I think it's 95 96% probability that the FED does nothing at the next meeting okay they leave you know the the FED funds rate uh at that 450 on the upper band here that's the sort of thing that you know that when you have near certainties priced in you know what I mean what are they going to say about March you know what I mean

like those are the sorts of things that can cause volatility and I think people are going to remember that deck uh 18 that reversal day um all right dude what do you what do you want to do here real quick we have a question I want to just address because what I'm gonna really try to focus on this year is to get you know in sort of insert these questions at the right time spunky space is asking will the United St I know it's a great name will the United States Mega corbs be okay with

a weaker dollar is that why Trump will kick them lower tariff rate so the short answer to this question is historically a weaker dollar creates a Tailwind for us multinational because our Goods become more attractive VAV V that weaker Dollar by the way I also think that's something that former president Trump incoming president Trump understood in his first Administration and I think it's something that he will Embrace in this next Administration which again flies in the face of what presidents have said since Roosevelt in terms of their want for a stronger dollar but when you

have you debt to GDP ratios that we have you don't want it's it's one of those things when you owe somebody $100 you have a problem when you owe somebody $36 trillion doll they have a problem and you know the way to get out of that problem is obviously to sort of weaken your currency which makes it you know it just it's a nefarious way to sort of get around the problem that's been created over the last decade or so so again that's apolitical it's just factually true so it should theoretically be a Tailwind from

multinationals I I love that I love that saying it's so it's so you it's so uh somebody who has lots of vows in their last name you know what I mean it's it's such a great it's such a great saying I I mean that I I couldn't get away with it I I don't think I could get away with it you what's that what what did I get away with when when you owe somebody $100 you got a problem when you owe somebody 36 trillion they got a well I mean if you think you know

there's there's a lot of Truth to that and and I think you know this is this is an ad Administration I think intuitively understands that and you know has historically used it to their benefit in business and again this is not casting judgment this is just speaking factually and I think they're going to try to implement similar uh in this scenario and and again you know what I think it means for yields and those types of things and we'll see what it subsequently means for the market but let's continue on our merry Journey Dan as

we go from fed funds rate to you know you talked about the implied move and how you got there yesterday we teased the XLV so let's take a look at that which has not been a performer at all today we get in the bounce but you know this is not been good yeah this is one where you know listen you see that sustained selloff you know there was a lot of groups that kind of maybe ran into the election maybe popped out after this one this one was just you know I don't know why I

was rallying um in early September but if you look at that sustained selloff just a series of lower highs lower lows that sort of thing it's kind of consolidating here near those 52 lows to your point and kind of busted out I think you and I talked about this one a little bit yesterday maybe you see a move back towards that kind of 148 149 level we'll take a closer look at this one we'll see what call spreads look like maybe we'll look to sell um a put spread here and play for kind of a

move towards those recent highs I don't know um we just wanted to flash that one because again this was a a very out of favor group late last year guy I know it's the group that you track um fairly closely we also know that a lot of the sentiment the positive sentiment around the glp one trade which was Novo Nordisk and Lily has kind of come out of it so you either have to see some excitement come back into those and maybe some other names that are going to get some approvals on some of the

drugs they're working on in the space or just have some sort of interest in the relative valuation we know that Lily got really expensive relative to the other one so maybe there's some interesting names that you could play through the XLV well that's it I mean you know what works for these excuse me ETFs on the way up when these stocks the individual stocks I mean Eli Lily is probably 12% of the XL I think J&J might be nine so I mean you're talking about 20% or two names but as those names obviously then go

the other way you see how quickly you get a draw down but with that said you know that creates opportunity in some of these underlying names and for example MC which has found a home around $100 is having traded up to about 133 at some point last year you know that's getting a little bit of a giddy up here so you know when these ETFs sell off the same way when they go to the upside their money flows it drags everything up with them and we've had that conversation well the same thing happens the other

way when these ETFs get sold off it's not just one or two names it's the entire space that sort of Falls victim and I think to a certain extent names like MC and TMO have sort of found themselves under the aices of that but you're right to point out that that selloff creates opportunity not maybe not necessarily in the ETF but in the individual names in the ETF yeah no doubt um you know another group that I think is interesting and relative to the dollar strength let's just pull up Staples really quickly xlp uh we

know the largest components there at Proctor and Gamble I mean you know look at this thing obviously it's broken that uptrend that was in place from the spring um you know and really looks like you know trying to kind of buy this thing is you're catching a falling knife I mean maybe you see this thing back towards $75 and that kind of consolidation range guy from from the spring or so but well and just before I get your comment let's just pull up Coke and Pepsi I mean these things look like unmitigated disaster so guy

this can't just be about higher yields it can't just be about a strong dollar or am I wrong is that what it's that's a big part of it without question I think another big part of it and I know you know this is is what's happening on the glp1 front without question I also think a big part of it is again not being political at all but you know with potentially uh Robert Kennedy coming in on the fry I mean he's clearly somebody that wants to focus on health and the foods that people eat that

does not bode well or auger well for names like Coke and Pepsi and I think you know you could say you're nuts but I think that's part of it as well so when you sort of throw all those three things together you have the price movement that you've seen now at a certain point they're going to find a home in terms of valuation I just don't think we're here yet I mean I'm more inclined to look for example this is the xlp I know it's sort of nitpicking a bit but if you go back to

sort of the March high around 76 that's the sort of level that I think we could sort of trade down to if you want to draw that horizontal line of man yeah that makes sense um all right let's go to the Fateful eight guy because this is obviously was that a movie no was a hateful eight so you want me to remind everybody what's going on here that mag seven thing was really bugging me and and let's be honest I think on fast money we changed the Magnificent Seven I've never I don't think I've ever

used you know me there's certain things I just refuse to say I think Kramer I think Kramer um he coined it and then it was Magnificent Seven magn it doesn't really roll off the tongue and I think on fast money and this is a little inside baseball one day I think it was like about a year ago Mel in a break was like I don't want to say that anymore I don't like that you know what I mean that expression does that mean that these are magnificent stocks and they're going up much higher this and

that whatever and so I just kind of started referring to it as the mag s sure I think oh come on don't all right no I just said yes sure you remember in 17 when I coined everyone was talking Fang it was Facebook book was I remember when then president Trump pulled out a a a one of those what are those things called like and and started writing down all the trillion dollar companies basically copied what you 100% I guarantee somebody said to him hey you should take a look at this and I'm giving you

I mean that sincerely who just said if the Microsoft the Apple the Google and the Amazon yeah and he busted all right so I coined that I'm not proud of that okay but I coined it now what we've done with the Fateful 8 is when broadcom that comes out avgo moved above that one trillion dollar Mark we threw that in there and the whole idea what does faithful mean okay well faithful means you know what faithful means okay it's not faithful you know Karen on The Fast Money said you Faithful no that would mean you

have faith in these stocks to continue faithful means that the faith of the market is in the hands of these eight much different word I mean it's entirely different word I mean there's no ey in fate no um there's not all right let's talk about a couple calls of the day guy because it's two of the faithful eight what is two out of eight you can do that that would be 25% so you take two you go eight divided by two and you get four then you get four divide right right so it's 25% let's

look at this you you got to sort of Whittle it down yeah so and so you can't Whittle anymore so a lot of our listeners our viewers they may not know mfet Nathanson you and I know mfet Nathanson these are two gentlemen that are really really a did you know who Mary Ellen mfet was oh yeah from um Mary Ellen MAF what movie uh oh from cast from Jaws yeah of course Mar Mary Ellen Moffet she broke my heart remember when when Hooper opens his shirt and then bro says you're wearing a sweater and he

goes no Mary Ellen Moffet she broke anyway are you yeah I got that so MAF Nathanson two and I know these guys they've been on the show um great guys really smart guys they've been doing it for probably 35 years um you know they downgraded Apple that's not something that you see too frequently okay their target is now $188 you see where the stock is it's what 244 243 um you know the average price Target on this thing is $250 um and so when I think about this and and obviously I'd love to get your

take because this is a stock that I think we talk about um daily you know you say to yourself oh I don't see too many downgrades well maybe Amanda can Flash this up for a second Apple has the least amount of buy ratings on the stock and as long as I can remember I think it's about 65% of the analysts that cover that look at some of these other names in the Fateful eight I mean you know analysts are just all in why do we care about this it's not important I mean listen they downgraded

the stock today it's down less than 1% it's down less than the uh S&P 500 it's about sentiment right so if there is some sort of situation that causes you know investors to kind of repic you know maybe it's just been all uh you know appreciation multiple appreciation and you get a guide down well you're gonna have analysts downgrade the stock and then you're going to have a lot of investors who are just kind of you know following all this stuff on the way up they're going to start to sell so when you get the

combination of annual analyst downgrades and investor sentiment kind of turn that's what's important to me and so speak to that guy a little bit when you see this sort of concentration not just in the market but it's also the analyst Community how they're thinking about these stocks there's no question um that you're right to bring this up as well and you know Danny talks about it Carter talk a lot of people talk about how you know the the market is skewed to be bullish and I understand that and by the way I think it's 67%

of the time the market goes up so you know if you're playing the game you're playing the odds with this but in terms of a call like this out of a mfet Nathanson I mean you can agree with them you can disagree with them but you got to pay attention to it now you know you're right to talk about sentiment around these things and you know when it swings it swings violently and it typically swings you know not towards the end of something but you know smack in the middle of it and I think it's

interesting to point out this apple downgrade and you know we've been quick to point out and again I didn't realize fully uh the impact that passive had but you know when Apple's in almost 500 ETFs and we've talked about this 425 of them have apple as a top 15 holding money flows in apple wins but there's that old saying Dan live by the sword Die By The Sword and they've been living by the passive investing SW and they've been doing really well but that has a flip side as well so if the market were to

ever sell off for whatever reason and passive becomes active I here to tell you Apple will not be spared and what works for them on the way up will work equally uh bad for them on the way down and typically as you know things go down a lot faster and you think about that price Target I mean that is a significant um um decline from where we're currently trading and then you have to ask you know what would the broader Market be doing under those set of circumstances so interesting call from them you know you

can do the math around it and say you know what historically you know given where their earnings are and given where their revenue guidance is I mean that valuation is not unrealistic if it were to get there so yeah that's two let's just stay on the chart here guys so that move you see that consolidation that we saw in early November the stock just kind of you know went parabolic it broke out you know to that you saw that double top from you know the spring into the fall that move was really unnatural in my

opinion guy from about 227 up to about 260 or 257 or something I think was um the high and you know at the time all the data points that were coming out about iPhones and about smartphones in general were not good you know what I mean and then the some of the guidance that we heard from some of the memory guys and some of the the foundaries and the like so it wasn't good so that the fact that the stock is sold off makes perfect sense does it find some support at that intersection of the

breakout level and the uptrend that's been in place possibly but you look at that 150 day moving average down there guy it's about what 227 or something like that that seems like it could easily be in the cards the stock doesn't report or the company doesn't report I think until Jan 30th so that last week we were talking about that you know I I just don't see how they guide uh higher um when I think about artificial intelligence or apple intelligence or whatever they're calling it it's just a zero there's nothing there right and so

as we get further into 2025 and some of the rumors about new iPhones that are coming out you're just not going to up upgrade your three or four year old iPhone in front of what's going to be a new form factor right so a new look and feel to the phone and hopefully better integrated um you know AI right so I don't think this upgrade cycle is coming that's been my view since June 10th at the worldwi developers conference but I was really wrong since then the stock closed that day 193 look where it is

right now I think I've been right on the fundamentals wrong in the price action so that makes me r n no but look I mean and you know it's interesting the fundamentals haven't changed well the only thing that's changed is price and in our world to your point you know you can be right on a lot of things but you know if you're wrong on price and if you're wrong on timing you are wrong um but you know if be one thing if the fundamentals around it changed the fundamentals around it have not changed as

a matter of fact all the stocks done has gotten more expensive uh and with each passing day sort of the bloom continues to come off the row in terms of all this whole AI integration that was so rally Hood in the middle of the summer early in the summer so we'll see how it plays out but you know I do admire this call and they might be dead wrong but there are very few people out there that are willing to make a a call as bold as this that are not just designated short funds I

mean these are obviously you know people that played straight down the middle and when you make a call like that I mean say what you want I mean they could have put a $350 price Target on Apple and it goes down to $200 nobody gives a but you put a88 uh price Target on and if it goes to 300 the people the calls from the from the cheap seats are are vociferous and and longlasting and I think you know they understand that and they did it anyway so good for them yeah before we get to

the options trade let's look at one other bold call also a downgrade this would be in Tesla um you know they go uh this is B OFA they go from um a buy to a neutral they did increase their target from 400 Hey listen good on them they've had a buy had a $400 Target it it overshot that so they still see 19% upside um you know the facts that average is still well below and you know this is one of the things I think is really interesting guy so we just talked about the breakdown

of uh you know analysts on the buy side 65% for apple look at this for Tesla you know 46 47% analysts have it as a buy 28 have it a hold and 25 have it as a sell I have not seen a stock that has performed like this over such a short period of time where there's so much you know uncertainty by the analyst Community about where this stock would go now no one expected this thing to go from uh 250 to 450 in a straight line but it since come back nearly 20% go back

to that prior slide and just see I mean I think 120 is a low on the street I think five and change is the high and 528 so I'm right I mean you think about you could drive a truck you could drive one of those horrible those cyber trucks through that range and you know what that speaks to it just speaks to people you know some people looking at the company one way and other people looking at it an entirely different way and you know that's why it's such a fascinating you know when people want

it to be a car company it's a car company when they report deliveries that were disappointing it's no longer a car company it's something else so their ability to be a chameleon in this environment I think is really interesting but at a certain point you know fundamentals and valuations matter and you know you can talk about all the total adjustable market and Robo taxis and all those promises in the future you know those are still promises they're they're not they have not come to fruition at all so you know label me a label me a

skeptic here and I do think this is one although you know it got down to sort of that 380 level which made sense we talked about it on fast money and bounced you know the next time down it's not going to hold yeah I think there's a good chance again I I I take the over every single time about when they're going to deliver on the things that they mentioned I think the fundamentals are still really bad um I think there's a price issue there's a price War I think they have a China issue um

I think they have an EV credit issue I think they have a competition issue as it relates to um like byd and Asia and the like so to me you better be valuing this on Robo taxi and you better think Robo taxi comes sooner than many people think because I think the fundamentals are still really bad and I just want to make one other point and maybe any listeners who's tracking this you know a large percentage of their sales over the last few years have been leases right and especially before rates started going up so

at some point you're going to Sunset those leases are generally 36 to 40 months or something like that those cars will not be purchased by the leasers I'll tell you why you're three and a half years into that battery there's no reason why you would buy that car you just turn in the keys and if a lot of cars are put back to Tesla okay because they are the financer you know when you have GE Finance Corporation when you're buying a GM car or a GM Finance ver they take possession of the car they figure

out how to sell them to Herz and AIS and this and there whatever put them in you know uh in the in the secondary Market or whatever Tesla if they take possession of all these least cars that's going to put pressure on the secondary value of these cars and that's one of the issues that's been hurting the cars at point of sale and the new one so I think this thing is going to be a mess this year I know that you guys have thought that I've been that way but until maybe Amanda can show

us a five-year this thing traded like you know what until very recently this stock had topped out in late 21 at 400 and three months ago it was trading at $250 massive performance than what's interesting is you know as loud as a lot of people were about interest rates nobody was louder in terms of the um pain that higher interest rates were causing than Elon Musk back in the fall of 202 if you can go back and remember and what he was talking about how higher interest rates uh were not helping his business at all

so you know that t turned out to be the peak in interest rates when he started job owning I'm not suggesting there was causation but as rates reapo those levels I mean this does not work to their business model which is also a bit of a headwind real quick because I said I want to get some of these questions in and we got a trade coming up so I'm sorry but Situation Room with Wolf Blitzer asked about Micron and I'll tell you something I was away when Micron the bed um but it traded down to

about 880 bucks if you go back and look that was a prior low and I do remember at one point saying on fast money or one of the shows that you know we got down to a prior low this should be a tradable bottom so that proved to be the case but I would not be buying Micron here right up against the 150 day I think this is where Micron stalls so you know this is bit revisionist and I apologize but I don't think it's breaking out here and if you go back and listen to

what they said last quarter that was a disaster and that's a disaster having traded levels about 160 or so uh earlier not earlier this year middle of last year I keep I'm going to do that for the next couple weeks so micron's got issues here yes it's bounced I think this bounce is probably running out of gas right here D I I agree with you what they had to say about consumer electronics versus AI was not particularly good it's rallying off of AI hopes right now we had foxcon come out with some December sales that

were much better than expected and I think that was you know like uh you know that got that growing arm asml a whole host of other names in the semispace all right guys we got to get to your chart of the look at that graphic Amanda Justa do that yes did that's that's some pretty good stuff that font looks like something like I've seen that before that font that of the day I don't know it's from it's like a movie or something Nvidia in the danger zone yeah all right so this is the chart that

you laid out pretty fascinating stuff as we speak this stock is down nearly 7even per. now you tell me why would that be Jensen Wang the CEO of the company had he had a just a prime spot at CBS it's a consumer electronic show that is out there in Vegas he was the keynote speaker last tonight stock rallied into it closed I think at a new all-time high or so what what's going on with those red circles guy that all right so yesterday it closed at an all-time high excuse me today we made a new

all-time high so let's look at the red circles that start back in March now if you recall the stock made an all-time high back in March it had a huge reversal stock traded sideways we actually pointed that out on Market call pointed it out on fast money we talked about that key reversal formation and by I want to say I don't know late April early May the stock had traded down some 35% it subsequently got it back we obviously gapped higher then you had the same formation in June the second Circle A reversal key reversal

against a new all-time high by I want to say early July mid July or so the stock had traded down I think 35 or 40% maybe more because I think we got down to about 80 bucks on that August 5th low once again we saw this in November not to the same magnitude but that was around when they reported earnings I believe you saw the subsequent move higher and then the give back into December today though is textbook and it's doing it on big volume we made a new all-time high today we're trading where we're

trading right now 142 and change if we were to close below yesterday's low and I don't have that in front of me that would once again be a key reversal day on big volume and it would suggest a similar move that we saw back in March back in June and to a certain extent in November you put a number on it I think it's somewhere between 35 and 40% and then you can put the price where it should trade down to I am not a hater I don't care one way or another you know I'm

not impressed by his crocodile suit um I think he does a masterful job of talking a good story um but at a certain point you know the Market's going to start to I think I don't know maybe start to dismiss uh some of that rhetoric it's going to start to look at valuations and um where it's trading and where it should be trading historically so today is a critical day for sure Dan I think those are a little crocodile tears about that crocodile you know something that's just a Johnson again you know that's akin to

doing one push-up like um genslinger deninger did for at Intel on stage yeah so really quickly on this one uh again I'm not a hater either um I just think that the the bar to jump over is getting smaller and smaller so when you have you know a low bar and not a big beat um you know the stock is not going to perform that great they are having a financial um their CFO is is speaking to analysts today so it's interesting I wonder if something has come out guy because we did see another leg

lower in this thing from down four and a half percent to down nearly 7 percent um but like like we're gonna have to hear what does capex sound like from their major customers four customers 40% Microsoft Google Amazon and meta so let's hear about Kaka capex let's hear about their customers use cases you know SAA Nadella the CEO of Microsoft this was a few weeks ago on the BT UMB or btg uh podcast it's Bill gly and Brian gers or Brad gersner he said they are no longer constrained as it relates to chips okay so

when you think about that there's a lot of things coming together that maybe they're just not going to have the demand maybe there's more competition maybe there's just uh kind of less pricing power so that was an interesting story to me again probably the most important important name in the fateful 8 but they don't report until late February that's why all those other names are really important they're big customers all right guys by the way let's just throw up I mean that resp way wavy McFly and if Timmy or Mana wants to put up wavy's

question I think we just addressed it but I want to make sure to sort of be respectful of the questions we're getting continue please Dan Nathan yeah um yeah thanks wavy all right so let's do two things in the energy patch here so guy you got me looking at The XLE this was on December 17th we know the major components there are Exxon Chevron and Slumber you wanted to take a bullish view on this so let's just update this trade so it's December 17th the stock or the ETF was trading around 86 bucks at the

time we were buyers of the 8797 call spread in February cost about two and a quarter then the stock is up you know a couple bucks two and a quarter or so so it's 8830 right now this is in the money this $10 wide call spread that cost two and a quarter is now worth about 310 I think you stick with it here guy you're targeting kind of that your 150 day moving average you know kind of this the first Target you get through there then you have a double on this trade that two and

a quarter no I think I think you're right and I'll say quickly you know we missed I should say I missed the timing by probably about four or five trading days because you know we we basically cratered down I think about 82 and a half 83 but you know you've seen the turn all right so we missed so I missed the timing by a few days but doesn't mean you missed the trade and I think you're right you know this thing should sort of trend back up to the moving average and then we're going to

start to see that if you do see a selloff in some of these higher valuation names where's the market going to find relief I think it's going to find relief in the energy patch in the form of the valuation so I think you're right to stay with this one Dan and if it gets to five you know then basically you have a double you take half off you're in the rest for free yeah and again this is Administration that's supposed to be very um friendly to the uh large integrated oil names but you know demand

comes in there dollar strength comes in there there's a lot of moving Parts there all right let's look at the largest component this is the Exxon because this one sets up really interesting guy I guess the chart doesn't look that different than the XLE but rather than a long premium directional trade I want to do a short premium directional trade I like that 105 level that's that support level that you see was a consolidation going back into last February or so you saw the big ramp you saw the consolidation you saw new highs and then

you saw this thing drop like a lug right right through the moving averages right through that kind of double bottom that we saw spring and fall and everything like that so it's had the rally it's gotten up towards this 110 levels so what do I want to do here I want to make a a bullish bet but I want to do it with Define risk and I also want to do it taking advantage of Premium probably coming in whether the stock goes sideways or goes up and then I'm giving myself some room to the downside

so I want to look to sell a put spread what am I doing here when the stock was trading around 109 today I want to sell the February 105 100 put spread about A110 is what I will receive I will sell to open one of the Feb 105 puts at A180 I will buy to open one of the Feb 100 puts at about 70 cents so again I'm taking in A110 this is how I make money on this trade if the stock is between 10390 and 105 on February expiration I can make up to one

A110 I have a Max gain of 110 above 105 and then I can lose up to 390 now we're going to go through this risk reward here you lose up to 390 between 10390 and 100 with a Max loss of 390 below 100 but what am I targeting here that 105 level right and this is where I want to kind of look to the Delta so let me kind of take over here um for a second Amanda let me pull up Exxon okay let me go to the options chain here this is on my Legend

I'm gonna be a legend for you here guy so I'm gonna twice in one day twice in one day I'm GNA go to February expiration look how easy it is to navigate that right so I'm looking at this 10 five put so right here it's basically I'm selling it at 107 and if I'm looking at the 100 put so this is basically costing a dollar right now if you were to sell that you get a dollar rather than um you know it says 103 here right there and we were pricing up at 110 so that's

how I look at a short put spread that is a credit spread right and then I want to take a look at the Deltas here so the 105 okay if I look at this the Delta is about 30% okay so it's got about a 30% probability that the 105 put is going to be in the money so I basically have a 70% probability that this stock is going to be above 105 at least that's what the options Market is pricing right now now they don't have dollar strikes they have five dollar strikes but the 100

put is about a 13% probability that that's in the money so here's what I'd like to see do I can see the stock if it goes sideways if it goes down a little bit but stays above 105 this is a trade that I have lots of different ways to win I've also Capp my risk right so how would I manage the risk if it goes through that 105 strike you know I have room down to 10390 you know the Stock's trading at 109 and a quarter that's plenty of room here so if it was in

that short Strike Zone where I'm losing money let's just see how it trades let's kind of give it some time let's see the reasons why it goes down there let's see where all these other things I just like the risk reward of this trade when you're telling me that I have a 70% probability that this stock is above uh 105 on February expiration this is how I want to trade options in this Environ yeah and you know what's interesting about this is you're not selling naked puts so you're not putting yourself out on a limb

you're obviously have the protection with the $100 put and obviously the risk in terms of what you potentially could lose out siiz is the potential gains but that is mitigated by the fact that probably have a 70% chance to your point of being right and this is an interesting way again we we talk about creating synthetic dividends this is an interesting way to do it with a stock that I think is going to start to Trend higher from here yeah and again what are we doing right here we're kind of marrying some fundamentals we're marrying

some macro we're marrying the technicals and we're using the options to kind of put the um you know the odds in our favor so I just like that you're going to see us do a bunch of this stuff of late I just think it's a good environment for that a couple weeks ago we did a calendar um you know we'll probably if we want to be bearish look to sell it out- of the money call spread you know and you guys are going to see how you can kind of make money in environment where you

don't have to be so right like the stock doesn't or the ETF doesn't have to go directly to your strikes for you to make money here and you to see how that kind of at the money or that near the money thing that you're short Decay so that's the trade here guy um we covered a lot of ground today man we had chart of the day we had the calls of the day we had an update on a trade idea from a few weeks ago we got a new trade idea what more could you ask

for can't ask for anything more all you can ask for is a range of victory tonight at Madison Square Garden by The Way Madison Square Garden that you will be at yes with Carter braxon wor so look for Dan there buy him beer but that's it we got a 5,000 thanks for the questions I tried to address a few of them we'll get more in tomorrow um but enjoy the rest of the day and stay you know keep a firm eye on that Nvidia close I think it's gonna be extraordinarily important all right thanks everyone

see you tomorrow [Music] [Applause] [Music]