5/17/25 Best Idea For The Week Ahead

The SPY wrapped up its 7th straight green week as we head into NVDA earnings this week. NVDA is almost 8% of the market by weight, its earnings are going to impact so many smaller names that this is pretty much earnings for the entire market. Any sort of warning or guide up from Jensen is going to move the entire market dramatically. Other than that we have yields soaring and oil names all breaking out friday which is not a good sign historically for the equity market. The run we’ve had is nothing short of sensational but look how extended we are from the moving averages, a small period of sideways or a pullback would be healthy when we’re 7-8% away from the 21 week.

Also, look at the candle the QQQ put in this week, that is an exhaustion candle. To say we are overheated is an understatement. We closed the week at 708.93 off of highs of 722.03 but the 21 week is way down at 631.44. We’re over 10% away from the 21 week on tech stocks and historically that isn’t something that sustains too long. So with all things we’re seeing from tech stocks, yields and oil, I don’t think its crazy to say tech stocks need a break, but with Nvidia possibly blowing things out and finally breaking out recently, who knows how much crazier things can possibly get. Still I worry about the late friday commentary from Trump on Taiwan friday and what that means for markets in the days ahead as so much of our market relies on Taiwan.

This weeks best idea is a major energy name sub $100b. It has an incredible chart, repeat out of the money call buying and at the money put sales. We’re going to take a look at some various options to trade this name including a very aggressive ratio as it appears close to a big breakout.