![[Gamma] Scalping Please](https://ibkrcampus.com/wp-content/smush-webp/2024/04/tir-featured-8-700x394.jpg.webp "[Gamma] Scalping Please")
STOCKS – NVDA
MACRO – SPY
If inflation is cooling, you would never know from those retail sales numbers that came out today. I’m not going to get into all the data, but the numbers were better than expected. One item that I found interesting was the Food and Drink numbers; like going out to dinner, it was up 14.1% y/y. Interestingly, it steadily decreased, but it recently turned higher again. That’s inflation. I have seen it first hand, in my own experience.
Inflation, from my perspective, is just moving around and shifting, and perhaps more importantly, the University of Michigan number that shows inflation expectations among consumers is rising again. Meanwhile, the NY Fed inflation expectation for consumers was growing too.
It is also worth mentioning that the Atlanta Fed sees 4Q growth at 4.4%, so if there is a recession, I’m not seeing it yet.
Why do I bring this up? Well, the FOMC minutes are coming on Wednesday, the day before Thanksgiving. Five governors will be talking tomorrow, on top of 3 or 4 today. So all of them, from my standpoint, made it pretty clear that slower does not mean fewer, and I hear that 5 to 5.25% target rate more often than not.
S&P 500 (SPY)
Meanwhile, the S&P 500 closed lower by about 80 bps at 3958. If that 3950 level breaks, it is not going to be good. That is a considerable level that, if broken, probably leads to that gap at 3,750 getting filled. Again, it looks very much like a diamond reversal top and not all that different from those we saw in August and early October.
Nvidia (NVDA)
Nvidia results were mixed at best, with revenue coming better than expected, while earnings were $0.58 per share, missing estimates of $0.70 per share. Adjusted gross margins came in at 56.1% versus forecasts of 64.9%. The outlook wasn’t much better, with revenue guided to $6.0 versus estimates of $6.09 billion. The stock is up slightly after hours, despite running up about 50% from the October lows. My guess here is if the stock does go up, that is an IV melting-type situation then because the results were far from stellar. Implied volatility for the November 18 expiration date was at 140% today.
–
Originally Posted on 16th November – Stocks Drop On November 16, 2022 Following Blistering Retail Sales Data
Disclosure: Mott Capital Management
Mott Capital Management is the portfolio manager for one portfolio offered by Interactive Advisors. Interactive Advisors clients do not invest directly with the Portfolio Managers like Mott Capital Management, and the Managers do not have discretionary trading authority over Interactive Advisors client accounts. The Portfolio Managers on the Interactive Advisors platform simply license their trade data to Interactive Advisors, which then allows its clients to have the same strategy and trading decisions mirrored in their accounts if the Portfolio is in line with their risk score. Portfolio Managers like Mott Capital Management implement their trading philosophy and strategy without knowing the identity of Interactive Advisors’ clients or taking into account these clients’ individualized circumstances.
Mott Capital Management has entered into a Portfolio Manager License Agreement with Interactive Advisors pursuant to which it provides trading data IA uses to offer a portfolio to its investment advisory clients. Â Mott Capital Management is not affiliated with any entities in the Interactive Brokers Group. Â
Interactive Advisors is an affiliate of Interactive Brokers LLC.
Pursuant to the Investment Management Agreement between Interactive Advisors and its clients, all brokerage transactions occur through Interactive Brokers LLC, an affiliate of Interactive Advisors. The use of an affiliate for brokerage services represents a potential conflict of interest as Interactive Brokers LLC is paid a commission on trades executed on behalf of Interactive Advisors. Interactive Brokers LLC does not consider this conflict material as it does not sell, solicit, recommend, trade against or otherwise attempt to induce Interactive Advisors to place any orders in any products. Interactive Advisors does not offer services through any other broker-dealer.  All trading by Interactive Advisors is self-directed. Interactive Advisors clients acknowledge this potential conflict of interest and authorize Interactive Advisors to execute transactions through Interactive Brokers LLC when they open an Interactive Advisors account. Clients should consider the commissions and other expenses, execution, clearance, and settlement capabilities of Interactive Brokers LLC as a factor in their decision to invest in an Interactive Advisors Portfolio. Interactive Advisors believes it satisfies its best execution obligation by trading its clients’ trades through Interactive Brokers LLC. While there can be no assurance that it will in fact achieve best execution, Interactive Advisors does periodically monitor the execution quality of transactions to ensure that clients receive the best overall trade execution pursuant to regulatory requirements.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Mott Capital Management and is being posted with its permission. The views expressed in this material are solely those of the author and/or Mott Capital Management and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
