Kerry and I’s Debate about “The Pivot”

Market move higher is…

Kerry and I agree both agree that A.I., machine learning and genome sequencing is the future. What we don’t agree on is the “Pivot”.

Last night as I was driving home, I gave him a call to check in with him because he’s had a cold since he got back from vacation. Our conversation quickly went into Meta’s earnings report and how the market responded to it yesterday with a META up 23%. He stated that he believes at the market he finally figured out the matter was well over sold, and that this was the time to buy META…that this was the pivot. I thought he was joking. He was not.

As most of you know, Kerry and I look at markets from a different points of view. He is focused on what is going to change the future and I’m very much what are the mechanics that are moving markets. Long-term we both agree that these new technologies are going to change our world. What we don’t agree on is how markets trade specifically, these markets that we have experience YTD.

From my point of view, we are watching an abnormal market, fueled by the biggest call buying frenzy markets have ever seen in history. There is no fundamental reason why these markets should be going up as they have. Yesterday META’s zero days to expiration options were up five times the volume in comparison to any time last year. The numbers are staggering how much money is piling in to call options. Yesterday more than 68 million call options where purchased. The previous record was set a year ago at 61 million. To give you a reference point, volume for calls and puts combined was 41 million on an average day in 2022. Yesterday alone, 2.7 MILLION TSLA calls (1.6M avg), 1.8M AMZN calls (600k avg), 1.3M AAPL calls (600k avg) where purchase on three companies who reported below street estimates on earnings after the bell.

Pivot?

Kerry and I’s debate last night was about is about if you buy today or do you wait…is this the pivot? As you can see I take this side that we are nowhere near a pivot. His point of view was that the market has finally figure it out. These companies are a good buy and it’s time to start buying now. As you can imagine our conversation was filled with passion and heated debate. But that’s what makes our relationship a strong one.

In closing…markets are always right.

Live Loud!

Trent

Disclaimer

This is not advise nor a recommendation. The views posted here are those of Trent Grinkmeyer, and do not reflect the views of Best of US Investors. .