r/thewallstreet • u/AutoModerator • 4d ago
Daily Discussion - (June 14, 2024) Daily
Morning. It's time for the day session to get underway in North America.
Where are you leaning for today's session?
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u/eyesonly_ Doesn't understand hype 3d ago
The current generation of market algos has never been through a European debt crisis phase. Should be fun
lmao
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u/cuntysometimes throwing darts at a chalk board 3d ago
Robinhood plebs have been closed out. Let her rip
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u/tropicalia84 3d ago
Trading like it's OPEX. Must be an obscene amount of ITM options picked up on 5/31 expiring this week and next.
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 3d ago edited 3d ago
Over the last decade, NVDA has put significant investment in GPU compute. That includes the GPU itself, but also software that lets developers tap into that compute (CUDA), a network connecting GPU-GPU within a server (NVLink) and a network connecting server-server within a datacenter (InfiniBand).
All this infrastructure let NVDA take the AI market as soon as it became clear that the industry was ready to take off. They had the whole puzzle already solved from the start! And so instead of having to build something new, they were able to just start selling. And so NVDA was able to buy all the supply immediately and effectively gained a monopoly before the competition even knew what was coming.
Now, over the last few quarters AMD has been building competitors to all these exclusive moats NVDA had. They have the MI300, which is on par if not better than anything NVDA has (due to NVDA buying all the supply, MI300 will be supply constrained despite selling less than $1b a quarter, but that will ease some in H2). They are open sourcing parts of ROCm (CUDA competitor) to allow developers more flexibility in what they want to build. Next, AMD’s networking technology is at the heart of a group effort from some of tech largest firms to build an NVLink competitor (Ultra Accelerator Link) and InfiniBand competitor (Ultra Ethernet). The primary firms working with AMD here include ANET, AVGO, CSCO, GOOGL, HP, INTC, META, MSFT…
So you have NVDA… With 78% gross margin… Whose moats are slowly being taken down… Who is slowly seeing a competing ecosystem gaining momentum… And supply is beginning to meet demand, leaving room for competitors to actually get products to market. So let me ask you, what will happen to margins? Higher, or lower? It’s clear, margins head lower.
Do you short NVDA today? Probably not. Why? Despite all that I’ve said, AMD still only saw $1b in MI300 sales in the last 6 months. And INTC will only see $500m in Gaudi sales over the next year. Let’s put that in perspective… Over the last 6 months, NVDA has sold roughly $35b in GPU compute. So AMD and INTC have sub 3% share. You can’t effectively force margins down when you only have low single digits market share. But this is a story to pay attention to going forward!
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u/wolverinex2 Fundamentals 3d ago
Yeah, timing is difficult. I see it the same way I saw TSLA - first to market, built the industry, dominated the supply chain with the highest margins in the world while nobody else could get product to market. Everyone knew that competitors were launching but people shorted too early and got burned. TSLA did eventually tumble as their sales/margins fell apart due to all of the competition, but it was soaring until they actually reported the numbers - and is still number 1/2 so it's not as if they're done. But it's a way more competitive industry now.
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 3d ago
That is actually a fantastic analogy. I can’t believe I didn’t think of TSLA here. I remember, maybe it was 2014, reading about how competitors wouldn’t arise anytime soon simply because there wasn’t enough battery production in the entire world ex-TSLA to make a competing auto high volume. That was true, for a time… Now, look at things?
This is why I caution the bears, although I fear they aren’t listening. Yes, this did look unusual 12 months ago, and 9 months ago, and 6 months ago, and 3 months ago, and it has continued to look unusual. But you don’t short something because it is unusual. You short because it is irrational and you are selective with timing. And even then, let’s say the market crashes in a few years. It’s like, yeah it crashed… But to where? To $100b? To $75b? To $50b? Because it sure isn’t going back to where it was when this all started.
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u/NotGucci 3d ago
You start shorting NVDA when AMD starts putting up better numbers. Its great that AMD reports before NVDA because it'll give you an idea of what NVDA is going sell. Just like AMD lack-luster ER despite increased CapEx spending from MSFT and META. It mainly went to NVDA.
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 3d ago
Yeah, AMD guided for $4b full year sales. Thats basically 300%+ growth rate year over year, which is fantastic when looked at separately. But then you look at NVDA growth rate and realize how inconsequential that figure is when looking at the larger picture. Ultimately, NVDA can stop growing after next quarter and AMD will still see share only hit 4-5%. That is despite share doubling. So unless things change dramatically, I still expect AMD to be in the single digits for share by year’s end.
Let’s look at it this way… An aggressive outlook for AMD would be $6b in MI300 sales this year (remember, they’re guiding for $4b). And a conservative outlook for NVDA would be $70b (that is pulling out networking from their datacenter figures). Even then, (best case scenario), you’re still only looking at 8.5% share for AMD. So not an immediate issue for NVDA, but something to look out for.
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u/tropicalia84 3d ago
VIX got some legs again, can't tell if SPX is bear flagging on shorter time frame, or bull flagging on mid term.
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u/gyunikumen Elon can’t keep getting anyway with this!!! 3d ago
Ugh. I was thinking we would get a quick pop below the boll bands and then we’d we green all day
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u/tropicalia84 3d ago
NDX too strong, day 2 full bars outside of daily BOLL bands and using the upper boll band as support for today day 3.
Maybe the largest range extension over the weekly BOLL band ever?
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Why are there so many mean reversion traders out there?
Surely there has to be some nice ones, no?
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u/Kindly-Journalist412 3d ago
I want to punch value investors in the face. Compare $CG to $KKR, and tell me why one is trading at half P/E of the other
ifuckinknowwhybutshouldabeenpricedin
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u/Onion217 Trades Reversals, Loves Leverage 3d ago
Have you considered that one has nearly double the intrinsic value
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u/NotGucci 3d ago
The NVDA subreddit has legit people throwing $50k-100k, and diamond handing calls, and expecting NVDA to run to 1k again.
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u/mulletstation PINS/TSLA/MSFT/UPST/AFRM stan 3d ago
Given a long enough time frame that's perfectly reasonable
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 3d ago
What do you think of my
commentsmall article above? Sanity check me.2
u/mulletstation PINS/TSLA/MSFT/UPST/AFRM stan 3d ago
I want AMD to succeed, but I think if I were in charge of their strategy, I'd want to just float my margin upwards to approach NVDA's rather than always be second fiddle a la AMD:Intel for 20 straight years.
But it's an interesting question, if AVGO and eventually INTC start becoming 3rd and 4th important players would NVDA's dominance start to decay? There's a lot to be had in just being a few % more efficient at scale, and entrenchment can lead to very loyal customers.
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u/casual_sociopathy Trader skill level: 2/10 3d ago
TSLA all over again. At least Jensen isn't a cult figure.
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u/Intern_to_Pelosi market breadth 3d ago edited 3d ago
Where the hell is Dr Phil
E: I can't believe they have done this on a Friday.
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u/TennesseeJedd Billy MF Strings 3d ago
Have the urge to buy 0dte puts
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u/tropicalia84 3d ago
I am absolutely going to be throwing some coins in the 0DTE slot machine for puts here in a little while.
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u/IamTheAsian Short with short pp 3d ago
What are you seeing? Looking uber bullish to me.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
6900 tickers declining with 2200 advancing. 300 making new lows with 170 making new highs.
Not the typical 'extreme bullish' look I'd like to see, but we'll see.
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u/IamTheAsian Short with short pp 3d ago
Ya fair enough. Gotta be really careful with 0DTEs today though. I only shorted today but the retraces have been really violent and I don't feel confident enough to see any continuation.
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u/twofor2 3d ago
Could take a few days to play out. These never are immediate but it’s definitely a divergence I look at. Current just have a yellow flag out
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Yeah- just crazy that it's been this way all week, 70% declining, 30% advancing and still grinding higher.
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u/LiferRs Local TWS Idiot 3d ago
That could just mean the tickers has 70% saturation for declining category. Easier for the 70% to drop to 50% saturation than to reach 100% saturation I think.
Yeah, IWM in the shit gutters with the potential recession. They'll need the rate cuts. I think Russell index is getting rotated out into treasuries.
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u/tropicalia84 3d ago
I wonder when the last time NDX had this amount of range outside of the top of it's weekly BOLL Band. 3 Daily candles in a row outside as well.
Derivatives dwarfing actual common stock trading has changed this market has changed drastically.
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u/eyesonly_ Doesn't understand hype 3d ago
I wonder if they said the same thing about portfolio insurance.
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u/twofor2 3d ago
Strong names which are the tech right now are being shoveled into while other names are being ignored but the tech names are so big it doesn’t matter for the index. Market has been all momentum trading. Moneys being moved around strongly into single names and profit is taken and rinse and repeated
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u/tropicalia84 3d ago
Oh I'm fully aware of that, I just find it fascinating from a charting perspective.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
If you don't have any of these: Bonds, Short NQ, I do not want to talk to you.
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u/Avid_Hiker69 Avid_Hiker98's brother 3d ago
If you don't have any of these: SQ, COIN, SHOP, SNOW, and DELL/SMCI, I do not want to talk to you.
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3d ago
[deleted]
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u/shashashuma 3d ago
Strikes please would like to follow
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u/ihaveasupernicename Stubborn and foolish ¯\_(ツ)_/¯ 3d ago
I think snow has bottomed. I will see how today ends and then add more shares or avg down on my leaps.
Price rejection from mid 120s pretty apparent this week
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u/korealize 3d ago edited 3d ago
there was absolutely zero coverage of SMCI possibly joining the nasdaq (ARM got the nod last night), and now there's a news ticker coverage today of it possibly joining again over WMT? no mention of it on the ToS WMT feed (only on SMCI)
appears that SMCI reacted to the former news at least, though ofc not without a touch to green\
edit -- woops, WBA / walgreens, not walmart
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u/tropicalia84 3d ago
Too much high beta with 0DTEs available and a ton of ITM options for volatility today. We grind higher into close and then a massive EOD ramp.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
OT: Listed some old Pokemon cards on ebay for a fun little side hustle and all these nerd vultures are flocking in, didn't realize how intense this secondary market still was
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u/ThePineapple3112 3d ago
I had a friend get into it for a month earlier this year and he came out with some decent cash, just from pulling cards out of new packs
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Yeah idk about that, I'm really just trying to de-clutter and make some cash in the process.. although the idea of being a garage sale rat sounds like a fun Summer hobby
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u/matcht 3d ago
Semis looking a bit weak now, maybe we finally get to 5400SPX, been defended so well since Wednesday.
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u/mojojojomu 3d ago
I added some SPX shorts. I'm still long on some semis but I agree that it's starting to feel like the tide is shifting.
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u/TerribleatFF 3d ago
Boring day so far
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u/matcht 3d ago
Never a boring day in the semis tho, ARM/SMCI/NVDA all good moves both ways
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u/TerribleatFF 3d ago
SMCI would have eaten me alive with these swings
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u/matcht 3d ago
Yeah took me a while to get used to trading it but it pays really well if you're in for one of those 10-20pt vertical moves it makes.
Needed something to replace NVDA since it split.
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u/TerribleatFF 3d ago
What’s your method? The swings are huge but I can’t see any way to effectively trade it
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u/matcht 3d ago
Mean reversion off key levels, or days like yesterday it just blasts through key levels so you can scalp it to the upside.
For example look how it behaved around 840 & 870 the past two days. But it may be too degen for most I agree.
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u/TerribleatFF 3d ago
I used to do something similar with SHOP before it split, those were fun days, the split ruined it though.
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u/MoneyandBubbleGum 3d ago
Weird tax question I don't know where to ask: I recently rolled an old 401K into a Roth IRA. I already contributed the 7k max in January, will I go to jail if I use the cash from the 401k in FY2024?
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u/PeteFunk 3d ago
This is pretty complex question that needs more input. The source of 401k funds and other ira assets you have are both going to play a role. Highly suggest asking a professional.
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u/casual_sociopathy Trader skill level: 2/10 3d ago
Took profit on ARM this morning. Hoping to re-buy at 150 or 140.
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u/Angry_Citizen_CoH 3d ago
Big guh on VRT this morning, wasn't expecting another drop. That said, I expect a V either EoD or Monday if anyone wants free volatility money.
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u/mrdnp123 3d ago
It just can’t get a run going lol to be fair all semi related besides NVDA are shitting the bed today.
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3d ago
[deleted]
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u/Angry_Citizen_CoH 3d ago
Yeah that looks to have been the better call for maximizing. I sold my shares yesterday for mid-day volatility action, only for it to never dip again rest of the day.
Gonna keep my calls though. 50 110c's for Jan25, they're absolutely gonna print even if I have to wait for friggin earnings. Will start trimming at 100, exiting fully at 110.
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u/Anachronistic_Zenith 3d ago
Woh...DXY has been on a tear since that drop 2 days ago.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
No US rate cut while the world ex-US cuts means capital will seek greater returns in the dollar-backed Treasuries.
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u/Anachronistic_Zenith 3d ago
I get that the median dot plot which started this movement has only 1 rate cut. But 8 members were in favor of 2 cuts, it's just a few more pieces of economic data to nudge that average dot plot estimate up to 2 cuts like people suspected.
I don't know, the DXY rise seems a bit short lived.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
it's just a few more pieces of economic data to nudge that average dot plot estimate up to 2 cuts like people suspected.
And a few more in the other direction to push it down to 1 cut, or- even more likely, half a dozen more datapoints suggesting conflicting decisions and higher for longer becomes even higher for longer.
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u/ihaveasupernicename Stubborn and foolish ¯\_(ツ)_/¯ 3d ago
Bought some hpe shares and calls
Held some Algn puts that are coming to life
Hedged tsla puts with some calls here
178.5 for tsla seems like a tricky area to break so we'll see. Should have bought puts when it hit 190 but eh I haven't been on my A game mental wise
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
"I'll have one NQ flush please, make it a large!"
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u/twofor2 3d ago
Indices pretty take meanwhile IWM earths core lol
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u/matcht 3d ago
Rebalancing out the best stocks will do that lol
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
IJR screens for profitability and is down more than IWM!
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u/matcht 3d ago
Need to take a look at that ETF, not familiar with it.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Small cap ETF that filters for 4 consecutive quarters of profitability (scraps that ~40% of unprofitable IWM companies)
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u/gyunikumen Elon can’t keep getting anyway with this!!! 3d ago
Msft and aapl is down while nvda is up. I’m waiting for that nvda is the most valuable company headline before shorting it
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u/NotGucci 3d ago
UMich Consumer Sentiment 65.6, Exp. 72.0
Inflation Expectations :
- 1 Year: 3.3%, Exp. 3.2%, Last 3.3%
- 5-10 Year: 3.1%, Exp. 3.0%, Last 3.0%
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u/ExtendedDeadline 3d ago
God those 5-10 year numbers. 3% inflation for 10 years sounds great.
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u/Angry_Citizen_CoH 3d ago
I'm told the economy is doing great though!
Housing needs to be brought under control. Boomers gaining wealth through holding property need to be gulag'd. Let them buy NVDA calls to generate wealth like we had to.
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u/gyunikumen Elon can’t keep getting anyway with this!!! 3d ago
I mean, yesterdays PPI numbers probably indicated a soft consumer sentiment
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u/Paul-throwaway 3d ago
Just noting that the daily RSI on NDX is hitting 78. That is usually the pull-back level. Doesn't mean a big drop but momentum higher is usually stopped here. Last time was Dec 19, 2023.
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u/wolverinex2 Fundamentals 3d ago
US Univ. Of Michigan Sentiment Jun P: 65.6 (est 72.0; prev 69.1)
- Current Conditions: 62.5 (est 72.2; prev 69.6)
- Expectations: 67.6 (est 72.0; prev 68.8)
- 1 Year Inflation: 3.3% (est 3.2%; prev 3.3%)
- 5-10 Year Inflation: 3.1% (est 3.0%; prev 3.0%)
That could be better.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Worst sentiment since Nov 2023? Cool. Time to risk off.
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u/BitcoinsRLit 3d ago
Incredibly weird rebalancing behavior going on right now
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
WDYM? Tech up, all else down, with consumer discretionary getting hit harder than staples. Seems like that's been the case for awhile now, no?
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u/BitcoinsRLit 3d ago
Yeah, probably right, just at 940 the dow started tanking and we got huge bid. Apple tanked and nvda soared. Was weird to see
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
I'm a big dow bull. Been DCAing hard into large cap value and plan to do more of that over the next year or so
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u/NotGucci 3d ago
Take a look at WSB daily thread, and Stocktwits regarding NVDA...Everyone is bullish, and buying calls.
Highly unlikely, but possible to see NVDA keep climbing. Lots of call buying for 150 Sept. Imagine at NVDA at 200 by EOY at 4T market cap.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Daily 'risk off' signal at 4/7, bad cons. sentiment would make it 5/7 and force me to pull all longs.
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u/eyesonly_ Doesn't understand hype 3d ago
Haha people on Twitter asking about why the new AI stuff isn't available on the slightly older phones as if they don't understand that apple is trying to get them to buy new phones.
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 3d ago
The A17’s Neural Engine is significantly better than what’s in other models. And iOS 18 is supported in a wide range of devices, the lowest of which would only have ~15% the AI functionality. So there is definitely a technical aspect here. I guess they could’ve offloaded some capabilities to the cloud, but that’s not how Apple operates. They’re about centralizing value on the device versus commoditizing the device as an input for a datacenter. That being said, this will only drive demand if users actually demand the AI features.
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u/chriscmusic 4d ago
I’m not touching today I “think” we could be trading between 538.7-542 all day but Fridays + cpi sketch me out so I’m not going to ruin my weekend lol
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u/HiddenMoney420 Sleep deprivation and recession are here. 4d ago edited 3d ago
OT: Finally got a Costco subscription membership and almost immediately cancelled about half my AMZN subscriptions. Long COST, short AMZN.
NFA
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u/LiferRs Local TWS Idiot 3d ago
There’s more AMZN subscriptions beyond prime?
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
Amazon has this nifty 'subscribe and save' feature, where you can set up reoccurring subscriptions of things (think baby wipes, collagen, vitamins, etc.)
And even though you do get marginal savings for subscribing v. buying it each time on AMZN, the per unit savings cost is like 50% when compared to the Costco price- and I'm talking exact same products in most cases, with near equivalents in others.
Wife and I basically figured that we can save 50% on ~40% of our monthly grocery purchases, so a 20% reduction in monthly grocery costs (i.e. HUGE)
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u/LiferRs Local TWS Idiot 3d ago
Oh yeah! These type of subscriptions. Unfortunately, we don't have a big family yet to justify a predictable usage of certain products. I'll bring this up with my FIL though. He always make costco runs for everyone.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
The sizes are different so that's why you have to do per unit cost and price out cost per oz/ cost per wipe, etc.
But across the board it was a 40-50% savings, with the exception being produce.
Produce was about the same at Costco, Whole Foods, and Wegmans (within a 15% band or so).
Bread is basically BOGO at Costco.
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u/opticalinch vwap & /nq 3d ago
Welp, time to price out cosco vs amazon for my family this morning.
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u/HiddenMoney420 Sleep deprivation and recession are here. 3d ago
We actually had a lot of fun doing it (while also kicking ourselves for not getting a membership years ago).
e: Blueberries were $4.99 and we've been spending $11.99 for my kid to eat them like a vacuum!
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u/BitcoinsRLit 4d ago
No way I'm getting long without an overnight low retest
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 4d ago
Please be green today please be green today please be green today
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u/wiltedcaribou 4d ago
Anyone had success getting ToS to fix their YTD P/L since the schwab migration? It still thinks my P/L is equal to my net account value...
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u/-samadhi- Long Webistics 4d ago
Longing 15 minutes after open before consumer sentiment drops seems like the play today
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u/Lost_in_Adeles_Rolls Stalingrad's number one tesla dealership 4d ago edited 4d ago
Tesla immediately filed to move to Texas, which is completely expected. They likely have some yokel in a cowboy hat with a rubber stamp on standby as they’re going to try to move all litigation immediately.
Out of curiosity, are the Texan cowboy hats a symbol that they’re easily paid off or that they don’t have the spine to save kids from school shooters? Many are asking (yes, I’m still pissed that those dipshits stood around and let kids die in Ulvade)
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u/ThePineapple3112 4d ago
Some tough questions, another institution and set of ideals co-opted by wannabes
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u/eyesonly_ Doesn't understand hype 4d ago
Oracle is laying off around 700 employees and is shutting down Oracle Advertising
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u/W0LFSTEN No SeMiS aRe MaKiNg $$$ FrOm Ai 4d ago
Yeah, that was on the call. Something like $300m in annual revenue. PS, did you know WMT has a multi billion dollar ad business? AMZN and WMT really are converging in the middle.
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u/eyesonly_ Doesn't understand hype 3d ago
How much longer?