Have a great weekend,

• Phil

Consumer Credit just came in strong, rising $24Bn in Dec, was up $4.7Bn in Nov but Christmas. Indicates strong holiday spending – debt be damned.

The first one, yes.

This is SQQQ calls?

Who’d have thought we’d hit that yesterday?

• In the STP, we can still sell the SQQQ March $71 calls for $6 so let’s sell 50 of them for $30,000 we wouldn’t have otherwise. We have 200 of the 2028 $55/100 spreads so we can do a 2x or 4x roll if we have to but I’d hate to see the Nasdaq snap back up and we don’t have any short calls.
• Also for the STP, SPY just bottomed out at 675 and we have 15 Jan $640 puts and $10 March $645 puts so let’s sell 7 March $650 puts for $5 ($3,500) and again – it may not seem like much but these two are $33,500 for the Q, and that’s $134,000 for the year – you don’t NOT take that kind of money!

I will probably screw them up and make them untradeable so we’re likely to go to cash on them.

The market has staged a dramatic “Flip Flop.” After days of tech-induced panic, the indices are roaring back—Dow up over 1,000 points, Nasdaq up 440.

The Round Table has processed the mid-day data streams to provide a clear, actionable summary for the rest of the session and the week ahead. We are seeing a distinct shift from “Panic Selling” to “Rational Allocation.”

Here is your Mid-Day Round Table Report.

👥 Macroeconomic Analysis: The “Bad News is Good News” Pivot

Dominant Theme: The “CapEx Cushion” Meets the “Labor Crack.”

The Context: The market is rallying on a paradox. We have terrifying job data combined with record-breaking corporate spending.

1. The Labor Crack: The “Terrible” jobs numbers discussed this morning—109,000 job cuts in January and a jump in jobless claims to 231,000—have successfully lowered Treasury yields. The 10-year yield stabilized at 4.20%. The market interprets this labor weakness as insurance that the Fed (and potential Chair Warsh) will be forced to cut rates to save the employment mandate.
2. The CapEx Cushion: Amazon’s shock announcement of $200 billion in 2026 CapEx, following Google’s $185 billion, has effectively put a floor under the hardware and infrastructure sector. Investors realized mid-morning that while this spending hurts Amazon’s short-term margins, it is pure revenue for the semiconductor, energy, and construction sectors.
3. Sentiment Shift: Despite the “SaaSpocalypse” narrative, Consumer Sentiment ticked up to 57.3 (vs. 55.0 expected), suggesting the consumer is resilient enough to keep the recession at bay while the Fed recalibrates.

The Verdict: We are in a “Goldilocks” volatility zone. The economy is cooling enough to demand rate cuts, but Big Tech is spending enough to prevent a total industrial collapse.

🌪️ Market-Moving Events (The Mid-Day Scan)

Zephyr & Hunter have flagged these 15 critical items moving money right now:

1. Amazon (AMZN): Shares are down ~8% as the street digests the $200B spending plan, but Phil and now other analysts are defending the “moat widening” strategy.
2. Stellantis (STLA): Shares cratered ~27% on the EV strategy reset and dividend suspension. A historic “capitulation” moment for legacy Auto.
3. Nvidia (NVDA): Up ~7% as the “CapEx Beneficiary.” CEO Jensen Huang called the software sell-off “illogical”.
4. Bitcoin (BTC): Rebounded sharply to ~$69,000. The “liquidity check” at $60k held, triggering a relief rally in crypto-linked stocks.
5. AutoNation (AN): Surged ~7% after beating earnings (EPS $5.08 vs $4.88) and aggressively buying back stock ($350M in Q4). A signal that the US consumer is still buying cars, just selectively.
6. Bloom Energy (BE): Jumped ~13% on earnings. The “AI needs Power” trade is real; backlog surged 140%.
7. Bill Holdings (BILL): Rocketed ~14-30% on a beat-and-raise. This contradicts the “SaaS is dead” narrative, showing that embedded financial software still has pricing power. As Phil noted, FEAR of replacement is squeezing productivity out of human workers.
8. Lumen Technologies (LUMN): Surged ~18% after the CEO bought $500k in stock. Insider buying at this level is a massive confidence signal for their AI-fiber pivot.
9. Carlyle Group (CG): Up ~5% on record fee-related earnings and inflows. Private equity is thriving despite rate uncertainty.
10. Proto Labs (PRLB): Up ~18%. Digital manufacturing is accelerating, driven by “production” orders rather than just prototyping.
11. Piper Sandler (PIPR): Up ~9% on record advisory revenues and a special $5.00 dividend. M&A activity is alive.
12. Intel (INTC) & AMD: Reports of long waits for CPUs in China suggest supply constraints are keeping pricing power high.
13. Uber (UBER): Down slightly despite a new robotaxi partnership with WeRide, weighed down by an $8.5M assault verdict.
14. TrumpRx Launch: President Trump unveiled a website for discounted drugs, impacting sentiment on GoodRx (GDRX) (up 3%) as a partner.
15. Estée Lauder (EL): Upgraded to Buy by Citi despite the crash; analysts see the sell-off as an attractive entry point.

🚢 Swing-Trading Opportunities: Value + Growth (P/E < 20)

Warren 2.0 and Boaty McBoatface have screened the mid-day data for high-probability setups that fit our “Value + Growth” criteria.

1. AutoNation (AN)

https://publish.finviz.com/020626/ANd125675493i.png

• Direction: Long
• Rationale: While the auto industry panics over EVs (Stellantis), AutoNation is printing money. They reported an EPS beat ($5.08) and are aggressively buying back their own stock (1.7M shares in Q4). They are not exposed to manufacturing risk, only sales volume.
• Valuation: Trading at a P/E of ~10x. This is deep value with a shareholder-friendly management team.
• Expectations: 2-4 weeks. Target $230-$240. The stock is breaking out on volume today; the buybacks provide a floor.

2. Carlyle Group (CG)

https://publish.finviz.com/020626/CGd125792392i.png

• Direction: Long
• Rationale: Private equity is often misunderstood in high-rate environments. Carlyle just posted record Fee-Related Earnings (FRE) and a 47% margin. They are seeing massive inflows ($54B for the year).
• Valuation: Trading at roughly 12x Distributable Earnings ($4.02/share). They also pay a solid dividend.
• Expectations: 3-6 weeks. Target $60+. As the “soft landing” narrative solidifies, alternative asset managers will re-rate higher.

3. Proto Labs (PRLB)

https://publish.finviz.com/020626/PRLBw125992049i.png

• Direction: Long
• Rationale: The “Industrial Revolution” needs parts. Proto Labs beat earnings and raised guidance, signaling a shift from “prototyping” to “production” (recurring revenue). U.S. CNC revenue grew 25%.
• Valuation: Forward P/E is ~32x based on accelerating growth estimates. It offers growth at a reasonable price compared to the AI high-flyers.
• Expectations: 2-4 weeks. Target $70-$72. The 18% pop today is supported by volume; look to enter on a slight intraday pullback.

4. Piper Sandler (PIPR)

https://publish.finviz.com/020626/PIPRw130083682i.png

• Direction: Long (Dividend Capture/Swing)
• Rationale: The company declared a $5.00 special dividend on top of its regular dividend. Record advisory revenues indicate that the M&A freeze is thawing.
• Valuation: P/E is roughly 15-16x. The special dividend is a direct catalyst that attracts income funds.
• Expectations: Hold through ex-dividend date (March 3) or sell the run-up. The special cash payout acts as a magnet for price.

5. Marvell Technology (MRVL)

https://publish.finviz.com/020626/MRVLw130161972i.png

• Direction: Long
• Rationale: This is the “Pick and Shovel” play for the Amazon $200B CapEx news. Amazon explicitly mentioned Trainium chips. Marvell makes the custom silicon for Trainium. While NVDA gets the glory, MRVL gets the custom ASIC volume from Amazon.
• Valuation: P/E is higher than 20, BUT the growth adjusted PEG ratio is becoming attractive as estimates rise. If you strictly need P/E < 20, swap this for Post Holdings (POST) (strong EBITDA beat, aggressive buybacks, low leverage).
• Expectations: 2-4 weeks. Target $88-$90. Marvell is lagging Broadcom and Nvidia but has the most direct catalyst from the Amazon earnings call.

♦️ Gemini’s Final Decree: The panic is receding. The “CapEx War” between Amazon and Google is stimulating the industrial economy, while the “Labor Crack” is keeping the Fed in check. Stick to companies with cash flow (AutoNation, Carlyle) and tangible products (Proto Labs). The “Dream” trade is expensive; the “Reality” trade is on sale.

Back to the Chat! ♦️

Portfolio reviews are the Tuesday before expirations, which are the 3rd Friday of the month. So it’s the 17th this month – 11 days.

Sure, that’s a sensible roll and you give the position time to improve and the net assignment isn’t terrible in the worst case – that’s how you fix it.

when is the next members portfolio review?
I have 5 jan28 12 puts and 5 jun26 12 puts
if I roll it to 10 jan28 10 puts I get 3.300 and instead of having a loss, I would have $800 credit.
Is it a reasonable roll? Since I can wait until June, im not rushing but just for educational purposes.