WFC, ADBE, GME Stock Market News

what up outliers quick market update we have two things on the agenda for today the first one is going to be Wells Fargo the second one is going to be Adobe and then I guess there's a third bonus item which I want to take a look at GameStop because on the dark pool side of things there are just a lot of transactions that I find slightly curious and topical that I want to share with you so let's start with Will's Fargo what's going on in here the stock dropped 4% today for probably the most classic Wells Fargo reason on Earth which is it continues to you know break the law feel it's kind of like part and parcel for Wells Fargo it's one of the best reasons to be in Wells Fargo is because you know that they don't care about the rules that they're just going to kind of do whatever they want they might open accounts to show account openings that don't exist they might in this case not really care about the internal mechanisms that they need to you know fight Financial crimes I just they're just doing whatever they want out here and you got to respect a bank that somehow stays in business behind you know a Litany of different investigations and pretty much continuing to get in trouble for breaking the law it's just I find it hilarious so shout out to Wells Fargo for continuing to do whatever it is that they do but right now they are in a steep decline which funny enough it's not super fortunate cuz I do have a long position right now in Bank of America that's not exactly playing ball as as I wanted but the financial sector as a whole is starting to turn over a little bit here so if we jump over to XLF we can see that it's grabbing a bite which is good but you know I for a while financials were really holding things up but now it looks like it's rotating over a little bit so yeah got to love us some Wells Fargo news we'll see where this one goes as always absolute blast the next thing I want to take a look at is Adobe and this is because it feeds into the broader Tech picture so they had earnings today after the close and they had a massive massive beat so if you take a look they came in 363 was estimate 465 actual and then let's take a look at the old Adobe price and it's closed at 586 and is trading at 532 another example of where good is just not good enough so if we take a look at some of the news here specifically in Adobe there's a couple things that stuck out to me first one is it crushed on Revenue so that seems great news but this is one of the issues I think it didn't really like uh it being the market is the forecast and again I try to remind people when we're coming into earnings forecasts are so important and it's because we have a sense of the performance of a company coming into earnings we can kind of see how they're broadly doing but the forecast is new information to us and it's the first time that we get a glimpse at how a company is expecting to perform for the remainder of the year for the next quarter and that gets priced in pretty heavily and you can see how tight these margins are right because you can see that the company says it's forecasting 5.5 Bill to 5.55 for um Q4 and it's just shy of 5.6 and they they just don't like that so these kind of softer forward guidance I think is really important for us as both investors and Traders because we've seen this in a few companies now and in technology companies specifically we're getting to a really interesting part of the market where as we're coming up on rate cuts which will be very soon at least for the first round those are generally priced in at this point the market is trying now to figure out how do we proceed through this rate cut picture and I think one of the bigger risks we have if we start cutting rates too fast which it doesn't look like that's going to be the case upfront we're still looking at a pretty conservative starting cycle at least but right now to me it looks like the market is grasping to see how this thing plays out like we all are very curious about and the reason why I say grasping is because we have no period in history that's like a really close reference for what we've seen starting from the covid drop then the overall fiscal policy deployed by the FED during that period to combat that drop like we we've not seen what has happened before to this degree so this is very much a first ofit kind kind of scenario so from a trading perspective I continue to do what I always do which is remain sensitive to current information trading the market as it is not how I think the market should be that leads us into the fan fave GameStop so a couple things jump out to me here with the new offering we can see that volume definitely has spiked over the last couple days and part of this is also because of earnings but a really big contraction in volume here so I think right now A lot of people are curious how far does this go when are we going to be done with the shares because that obviously will suppress Price ever so slightly but again what I find most intriguing here is following its earning release we beat on earnings we came down we also have news of the offering and it's still holding tight here this is not a new line that I've drawn at the 1981 handle this has been here for some time and I do think that this is kind of meaningful support at this point we've been hitting it a few times recently so we have to see how the overall behavior of GameStop flows here but again I find myself looking at it the same way I typically look at it looks like we're coming into a more Qui quiet period and it's quiet until it's not so the other thing I wanted to take a look at with you is the options because we haven't done this in a in a little while so if we take a look at the overall volume for today it's 119,000 against 54,000 calls to puts so very very quiet on a relative basis but this strikes me different there's 700,000 calls against 350,000 puts that's a lot of calls and it's still at barely at a 2:1 ratio which is good but the other thing that I is very striking to me about the way that the options chain looks right now is that of those 700,000 the majority clearly is not in this front expiration this front expiration is 146,000 of those so it's a lot but not all of them and this represents a shift what the shift ultimately means I don't know yet I have to keep an eye on it but from an options trading perspective I noticed changes like this and typically speaking when we're looking at the front expiration we tend to see really really heavy option concentrated option value as a percentage of the total oi that's not what I'm seeing right now the other thing I'll notice uh I'll point out is that there is decent exposure already in this 20 step expiration 135,000 that makes sense to me 20ep is the next primary expiration options are typically more liquid there very very normal so the main anomaly I see here is just the variance across all these different expiration cycles for the call side I find that interesting not a direct takeaway just yet but interesting when I look at the overall volatility we're still very front heavy right so we have 121% for this week drops down to 98 96 95 95 99 so obviously 18 o becomes slightly interesting because that fourpoint Vol increase here it could just be because this is the next primary expiration cycle or it could be that the market is starting to anticipate something coming out here so that's an expiration cycle I'm keeping a close eye on because that is anomalous to go from 95 99 uh 95 99 95 essentially that's strange then it plummets right after that to 69 giggity back up to 90 so this is also really interesting to me how soft the volatility is here so far in one no so this continues to lead to a massive massive host of crazy opportunities to trade relative volatility and something like GameStop it's something that I've ran for some time now we can see for the first time in sometime that for the 20-step expiration we have massive massive call implied volatility skew again normally you'll see the put side priced more heavily than the call side but that's not what's happening right now we're actually seeing everything out typically the 50s would be the highest still but like this Kink is tradable to there to there relative to here there's a lot of different ways that that can be traded but the main note is that volatility as an outright asset class is very tradable in GameStop even though the price so far has been a little bit slower going all right so the last thing I want to show you is what I alluded to at the beginning of the video and it's this we have almost 100 transactions today across the entire day separated by very very little time frames if any of 5,000 share buy blocks tons of them and if we go back in time I wanted to actually open this up a little bit and like let's look over the last month together and let's see what this looks like so if we start uh oh sorry I want to do for the last 30 days not last month out right here we go so if we start from the of September you'll notice again that there's almost a hundred of these that that's a ton and it's like throughout the entire day so again it's hard to tell who or what this is or what series of entities this is there's never anybody that outright owns 5,000 share contracts or not contracts uh purchases because this is shares not options obviously used to talking about options but what I find most interesting is this if we look there's about 90 High 90s here then if we go to the 11th we see that that's about cut in halfish so the 11th there's still a ton of them if we go to the 10th there's maybe a third of that there's much less then if we go to the ninth even less still we go to the sixth it opens back up the fifth like none fourth like none well not like none but very far less so what I'm highlighting is that this is undulating these purchases are undulating and I can't quite put my finger on why there's no real answer to this it's very difficult to tell as to why we're moving in 5,000 share blocks because here's the other thing I find interesting is that if we sort this by size we can move way more right if somebody wanted to take all of those 5,000 share blocks and essentially throw them at once or twice or three times meaning across a few orders they can if they're so inclined because if you look at this the size that we're Trading for the larger uh positions here 150,000 145,000 100,000 even 93 87 so on and so forth so there's really big transactions flowing through here no problem so the fact that there's so many of those at the five I find just interesting because I also don't see that same kind of repeat buying behavior in any other relative size so far so yeah hard to say is per usual but something I just can't help but find interesting and that's one of the things I try to do do for all of us here on the channel is find things that look interesting to me that does look interesting I don't have a direct conclusion yet perhaps we can dive a little bit further into it on the gme live stream on Saturday at 5:00 p.m. Pacific time looking forward to that actually we have a couple things to get into which is the rest of roaring Kitty old trades we have maybe about a quarter to a third left of them to go last weekend we got super far in detail on them which I'm actually pretty excited to get back into those that was very fun so yeah interesting stock Behavior generally quiet options behavior and it is a continue to monitor for me right now I am trading it very conservatively I I've already told those I think it was during a live session I already paired down my stock position a little bit and it was just because of essentially we were getting to a decent spot I was making okay money based on what I had and then this is kind of like an accumulation Zone depending on how it behaves but for me I will always continue to remind everybody like I'm a Trader I participate in holding GameStop stock to participate cuz I like the community and I want to support it but this is not where I know a lot of people are parking like all of their money it's not even close for me and it's simply because I I trade the markets differently and I have to my livelihood so yeah interesting thing to follow along though I am really eager to see how it handles kind of this High 19 low 20 handle and see what it does in here especially when the offering abates and then I want to see if we start start springing from there TB D also still waiting to hear if we get any guidance soon on what the master plan is behind the capital that's raised still very very eager to hear that as well so as always anything I should look at let me know be an outlier see y later