🎯 TUESDAY TARGET: Devon Energy (DVN) | 👇 Reveal the Play
The week’s favorite pastime: screaming bubble at Nvidia’s $500 billion financing carousel. Fine, scream away. Meanwhile, the most telling AI headline slipped past almost unnoticed: Apple is testing memory chips from CXMT, a Chinese manufacturer on the Pentagon’s blacklist over alleged army ties, and lobbying the White House for a blessing. HP and Acer skipped the courtesy call; their laptops already ship with Chinese memory outside the US.
Why would the world’s most image-obsessed company risk a Washington firestorm? Because AI demand has swallowed global memory production whole. The Korean-American cartel, SK Hynix, Samsung, Micron, SanDisk, is sold out through 2027, DRAM spot prices went vertical, and Apple calls the pricing unsustainable while quietly raising iPhone prices to cover it.
Here’s what I think: nobody begs their geopolitical rival for parts of a fake boom. Scarcity this brutal is the market’s bluntest proof that AI has crossed from story to business. The receipts keep piling up: MercadoLibre now runs 90% of its customer service without a human while the business tripled. Airbnb ships products up to 60% faster. Google’s and Amazon’s cloud backlogs each sit near half a trillion dollars. Akamai’s GPUs? Sold out to the last card.
Savor the irony: export controls were built to starve Chinese chipmakers; now America’s crown jewel wants to feed one. Price signals eat policy doctrine for breakfast, and the tech cold war just met its deadliest opponent: a purchasing department.
Below, as always, all you need to know and not a word more:
The Emptiest Piggy Bank Since 1983
The Strategic Petroleum Reserve fell another 6.1 million barrels to 298.7 million, the lowest since 1983 and already inside the 250–300 million zone the industry treats as its operational floor. Washington’s cushion against Hormuz is nearly spent. Unconfirmed reports say Tehran has concluded it can simply wait out this administration until January 2029. Patience, it turns out, is also a weapon.
Bessent’s Invisible Hand
Treasury Secretary Bessent spent the week signaling he wants long yields contained: coordinated yen operations, public support for Warsh, hints at trimming long-dated supply. Monday answered him, yields climbed right alongside oil, with the 30-year back near 5.25%. This week brings $125 billion of 3-, 10-, and 30-year auctions. Jawboning meets supply; historically, supply wins.
Gold Ignores the Rulebook
Gold printed fresh cycle highs above $4,350 on Monday despite a firmer dollar and rising yields, the exact conditions that usually sink it. Central-bank buying rebounded, Chinese speculators re-engaged, ETFs added 24 tons since late July, and trend-followers remain short, leaving fuel for further squeezes. One caution: BTIG flags heavy technical resistance in the $4,400–4,500 zone.
Sell Signals Are Stacking Up
BofA’s Bull & Bear indicator hit 9.7, its highest since the 2021 meme mania and firmly in sell territory. BTIG adds a technical rhyme: the S&P’s breakout mirrors late 2021, when the index sprinted to highs while momentum stocks sat in a 25% drawdown; that one faltered. Equal-weight has rallied through unwind and rebound alike, raising air-pocket risk.
The $1.4 Trillion Safety Net
The bull counterweight: US buyback authorizations run at a record $989 billion year-to-date, and Goldman expects $1.4 trillion of gross repurchases to swallow roughly $700 billion of equity issuance plus any lockup supply. August ranks among the heaviest buyback months, with 93% of S&P companies out of blackout. Corporate demand still outweighs corporate supply; for now.
THE WEEK: Inflation Data Meets a Wall of Bonds
July CPI arrives Wednesday, with forecasters watching for payback from June’s odd price swings in core goods and services. Thursday’s PPI counts double for the Fed’s preferred gauge; healthcare, airfares, and portfolio management feed straight into core PCE. Friday delivers retail sales and Michigan sentiment. Between them: $125 billion of 3-, 10-, and 30-year auctions, RBA and Norges Bank decisions, plus earnings from Cisco, Applied Materials, Tencent, and BYD.
Tactics for this Tape
Stay invested, stay hedged, stay unimpressed. Record-flat skew means call spreads and downside protection both trade cheap; own convexity while the market hands it out. Respect the mechanical levels: dealer short calls above 7,900, sell triggers clustered roughly 4% below. And keep dry powder for August 26, when Nvidia earnings collide with Jackson Hole week.
Don’t guess. Reach out. Let’s build a capital-efficient yet risk-managed strategy from the option chain up.
Get Rich Overnight with Options? Yeah Right...
TUESDAY TARGET: Devon Energy (DVN)
Our newest segment Daily Doze, still in beta, is already spitting out trades on an hourly basis: quant at its best. The options premium board wants us to have a deeper look at DVN, so here we are:
Everyone in energy is paying for action. War premium in case Hormuz stays shut, crash protection in case a deal does to crude what June’s ceasefire did; nobody wants to own the boring middle. Yet the middle is exactly what Washington and Tehran keep delivering: Trump calls it semi-negotiating, Iran hints it can outwait him until 2029, and Goldman pegs fair value at $80–90 Brent until something breaks.
Meanwhile, DVN has spent the summer chopping sideways while its options still price a headline that never arrives. So we sell both stories at once, a defined-risk range trade that collects rent from everyone else’s fear. War or peace ends the trade; purgatory pays it.
This is not an official trade entry, just food for thought. Official trade entries are posted in the Trade Alerts section. Over there, we relentlessly innovate and deliver novel setups.
All our recent trades and the reasoning behind them can be found in the Trade Alerts section. Think of it as a behind-the-scenes look into our process, so you can decide if it’s worth adopting (or adapting) in your own strategy.
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