Daily Newsletter 11/20/25

U.S. index futures are showing strong gains this morning, fueled by Nvidia’s impressive earnings report that calmed concerns about an AI bubble and boosted market sentiment.

We agree with the consensus that Nvidia’s earnings and especially the strong new chip orders are positive. However, we remain wary as many AI-related stocks still appear bubbly. Circular financing issues pose a significant risk, and if the AI industry cannot achieve near-term profitability, the key question will be how much longer investors are willing to support a loss-generating sector despite the current enthusiasm. This combination of strong earnings and cautious outlook characterizes the current market environment.

Yesterday after the close, Nvidia wasn’t the only stock to rally; several others including CRWV, ARM, APLD, NBIS, RXRX, WRD, INTC, and more also surged, lifting the tech sector broadly.

We took a straightforward bullish approach to NVDA earnings by purchasing equity and short-term long call options with a $40 premium per contract, enabling a sizable position. At market open, we plan to reduce exposure by 50%-75%, as we remain cautious about the rally’s sustainability, expecting only a short-term move with options expiring November 28. In our view, while the earnings are impressive, the price surge reflects investors’ reluctance to abandon the AI growth narrative. We are not pessimistic about AI’s potential but are more concerned about overvaluation than the consensus. Paid subscribers will receive exit notifications via chat as usual.

OUR TRADES

We share our short-term trades within the Tactical Portfolio exclusively with our paid subscribers, providing complete transparency. This includes detailed information on our entry timing and pricing. Exits are communicated promptly through chat to ensure timely updates. Our strategies often incorporate complex option structures to capitalize on short-term market movements, reflecting a sophisticated approach to tactical trading.