Trading Zone | Episode 102 | May 04, 2026 Title: NVDA Options, Bitcoin Crash, And The Yen Reversal | Trading Zone Ep. 102 Host: Joe Tigay (Equity Armor Investments) Runtime: ~45 minutes Video URL: https://www.youtube.com/watch?v=X9uGrX5ipO4 ============================================================ Hello and welcome to the trading zone. I'm Joe T. Gay of Equity Armor Investments, former VIX and SPX options market maker on the CBOE, current portfolio manager of the Rational Equity Armor Fund and the Catalyst Hedge Equity Fund. I hope you have had a great weekend. Hope you're having a great start to the week. Market's not off to fantastic start. It's not hitting on all cylinders, I should say, but there's some bright spots to the market, some negative spots. Nvidia, of course, having a nice a nice bounce back after its rough week where the market had kind of doing the opposite of what happened last week. Bit of a shift shiferoo going around here. Interesting to see, fun to see. I always just love trading, just love seeing the ripples that are going around in the world. And speaking of ripples, make sure check out the Ripple Effect blog if you're here today. No reason why you should not be clicking on this button on the bottom and subscribing. But yeah, today's article is going to be allowed about what the show today is about is the volatility of Nvidia. And Nvidia and how they are just so tied into the market. You know, Nvidia used to be very recently less than 1% on the S&P 500, now we're up over 6%. So the volatility that Nvidia experiences is going to be in the market. Just something we can't escape. It's going to be something uh that we're going to just have to ride through and it's just part of the game. If we want to be in this AI trade, we have to accept volatility is going to be here and with us. So make sure you stick around for the whole show because I'm going to be talking about all this. We're talking about Nvidia, Bitcoin, and the end carry trade uh, and how to ride the volatility. I even have an options trade with Nvidia at the very end if you do stick around. So, yeah, it's just me today. Brian is out with a little bit of a head cold. Uh, maybe he's just in disbelief that the Bears are as looking as good as they do beating the Eagles first place in the NFC. I'm personally I also don't believe it, but it is the reality of it. Speaking of the reality, man, what a what a turnaround in volatility last week into Thanksgiving. The VIX just absolutely smashed and hammered. Got the VIX up over 25 two weeks ago and now here we are last Friday. I think it it was a 16 handle bouncing back again today after the holiday and with a little bit of a downward pressure in some some of the stocks. So, a little bit of a bounce back. But yeah, volatility got super high and then it got super cheap. Need to remember with volatility it's not going to be going higher up into the right over time like we hope stocks will and other assets do. We should expect to see this heart rate monitor up and down. When it's too low, you should expect it to want to go higher. When it's too high, you should expect it to want to go lower. And maybe this was the sign that, you know, we weren't going to be bouncing away and going crazy was the bond market volatility absolutely hung in there. It did not go crazy and now we're just smashing back down down here towards this relative lows here. So, this is just absolutely astonishing to me. We know about the end carry trade. We know the risk that's happening. We do have the talk of a hawkish Bank of Japan. The yen they look like they're raising rates at the same time we're lowering rates. Is that going to cause some problems with uh carry trade? Well, here's a sign that it really isn't. Another sign that this uh really isn't spilling over from any of the corporate debt that we're worried about, too. So, the bond market volatility absolutely non-existent. Really a a sign of health for the market. But, there are other issues out there. We'll get into that with Bitcoin in just a second. Uh of course uh of course Oops, wrong way. Go back. Okay, of course we've got the skew index here. The skew index, another um you know, under the surface volatility indicator that we love to look at. It's a kind of a key indicator for us. Really gives us a clue as to where the VIX is going next. We continue to have this like trend of like higher lows here. I think this makes sense to me as we're getting further into this uh AI bubble. We should just expect to see, you know, maybe not the bubble popping, but the volatility floor just continually getting higher and higher and higher because, as we know, the bigger they are, the harder they fall. Uh the higher the keys ratio go, uh the more volatility we should expect. All of the above. So, uh well, this doesn't mean that the bubbles uh imminently popping. It just means that this is just what we have to accept. If we want uh to have a bubble like we saw in the '90s, we have to accept that there's going to be some volatility on the way. Um you know, maybe we don't even need to have a bubble. Maybe we can just have a slower uh sustainable growth uh you know, like we're seeing this year uh in the S&P 500. You know, a 15% year, if that's where we end up, you know, that's not um that's not bad at all at by any stretch of the imaginations. Um but, it's uh not like the bubble territory where you'd see 40% uh year after year. Uh for the record, uh the projections for growth over the next 5 years is 18% uh the S&P 500. So, the earnings growth is uh projected at 18% uh for the next 5 years. That is um Oh, yeah, that's pretty high. I think that would be a really great return if we were to see that over the next 5 years. But that's just where the projections are. If we don't quite meet that, maybe maybe a little bit of a sell-off would be in order. Again, doesn't necessarily mean we need to correct 40% or worse like we've seen in previous corrections. Right now on the volatility futures curve, looking at the VIX futures, we have as you can see a big drop in where the spot was. The front month cash was kind of predicting that. It was well lower. So, it was kind of saying, "Hey, you know, we're going to be coming down here." Now we're back into the normalization. We have a normal normal futures curve where we have the spot below the front, front below the second, etc. Where we where you expect to see this slope like that and we have that and maybe that's a good sign for bulls. But again, we need to kind of just get past this Bitcoin turbulence volatility and we'll see maybe it'll be after the Fed. Maybe it'll take them to next year as we just kind of chop around here and consolidate with this market. Not the worst thing in the world, again. Okay, so here's the big events this week. The ISM manufacturing, we already passed that. ADP is on Wednesday. This will be the last jobs data before the Fed meeting. We do have the PCE on Friday. That is the Fed's preferred inflation gauge. We the actual Fed meeting will be on the 10th. The jobs numbers going to come after the Fed meeting. So, that's kind of an interesting dynamic. Right now the market's pricing in the Fed will cut. How hawkish, how dovish they will be on that cut, we'll see. Given the fact they've had a few cuts in a row, it wouldn't surprise me if they, you know, do one thing and say another. So, cut and then be hawkish after that. We'll see. That's kind of that's kind of what they do. And then we'll get the jobs number, of course, after. We also are going to have the Japanese Central Bank December 19th. So a lot coming up. It's going to be a busy month of December. It's really important month. You know, if we're going to have a positive 2026. I think it's kind of important that we have a positive December and a positive start in January. It's really crucial. If you go back in time looking at calendar years, you can see in December is kind of an important test for the next year to see if you're up or down. So we'll we'll be watching it closely as usual. Last week on the show, if we remember, we were we were flirting with this 50-day moving average. We were below this 50-day moving average. This was kind of a critical spot. We are definitively above it. That's great. It's why volatility got hammered so hard plus the holiday, etc. But it does not say we're out of the woods, of course. Obviously, we'd love to see a new relative high. Lots of different possibilities here. Just looking at this on the charts, you could see this turning into a head and full shoulders topping formation. That's one possibility. Or maybe you could see this in the other way. If we go around and get supported here at the 50-day moving or 250-day moving average and see this a head and shoulders bottoming formation. So just kind of watching it all develop. The 50-day moving average is very important for me as long as we're above that. That is very good. Very risky the closer you get to that. So just because we poked our heads above it for a little bit does not mean we're out of the woods. It could be a little bit of a shakeout. But the same story's happening in essentially all of these indexes we're going to look at. Same thing's happening on the Nasdaq. Not nearly as close to its recent relative high. So maybe some broader strength outside of the tech index. Um and of the same very similar in the semiconductor index. But again, good that we're above the 50-day moving average here, maybe above that spot, but still very much in danger at at this head and shoulders topping formation. Not not the best if that were to materialize. We should be very careful of that. Mag 7 really stalled out. Was being This was This was a ball the 50-day moving average last Monday. Really kind of signaling, "Hey, the market's going to be just fine." Google was leading the way. Google was taking the reins away from Nvidia. Nvidia here getting getting this index racing higher. And then we saw some some pain in Nvidia, some gains in Google, some pullback in Google. So, it's kind of chopping around here. Should be Should be very It will This will lead the market, in my opinion. If I think if we get a break below this 50-day moving average here, the rest of the market will follow. So, it's very very important chart to watch. Back to always. I love to look at the 1990s versus today. If you go back to when the Fed first cut in the '90s compared to when the Fed first cut in the 2020s, we would be right here. So, if if we do experience a bubble and then a crash, I think there are worse things to experience than this part of the ride. That would be fantastic. Just remember though, we're going to see some massive dips and points. So, that you know, we just have to accept the fact that volatility will be with us if we are going to be on this ride. And it certainly seems like that is the case. Um So, we talked about the risk-off sentiment. One explanation, of course, is the MicroStrategy forced liquidation potential of Bitcoin. They are very likely going to be a taken off of a lot of the exchanges. They're probably going to be, you know, removed from the from the Nasdaq 100. There's going to be some forced selling of MicroStrategy. Does that mean that they're going to be forced to sell some Bitcoin? They're saying yes, maybe they're saying maybe they have to they would if they need type of a thing. It's not great. This is really just bad for Bitcoin in general and of course Bitcoin has been sliding lower. And really, if you kind of think of the risk on risk off narrative, Bitcoin and Nvidia are really the two things that I think of when I think of risk on and risk off. And it's just very it's just a very highly correlated trade Nvidia and Bitcoin. If you go back over the past 5 years, you'll see Nvidia and Bitcoin just absolutely trading in tandem. And in fact, you know, I have that on on our blog here today. If you just look at um look at here, you can see this is the Bitcoin in red and Nvidia here as sometimes Nvidia comes first, sometimes Bitcoin comes first, but it's a risk off sentiment. They're two of the more risky assets people have been investing in over the past 5 years. You can see they very highly correlate each other. You know, it used to be the case that Nvidia was a proxy for mining mining some cryptocurrency etc. And and now it's more of just like a risk on tech on tech off type of a trade. You know, but there's also the component of the carry trade. And that's another big component to Bitcoin as I mentioned at the beginning is is going higher in compared to the dollar when you see um the dollar Fed's expected to cut. In Japan they're expected to raise. The carry trade happened to be that the the yen was always at zero borrowing cost so you could you could borrow money very cheaply in Japan. You could get risk free return going to over the seas to America. So you kind of do that on leverage and that kind of built up some stress in the financial system when this thing unwinds. And then some people will take a little extra leverage and say, "Hey, I got risk free cash going on in America. Can I buy some stocks with that?" And of course you know they're buying stocks they're very likely buying stocks like Nvidia. So this is all all very correlated is when you see this kind of the negative USD JPY chart when you see the yen strengthening boy that can be really bad for stocks. So just something to keep in mind. We'll get through it. Doesn't necessarily mean it's going to be a fun ride but it also doesn't mean that you know stocks are necessarily have to go to zero. And of course this is been happening again and again for some time. They had a big blow up last August in the Yen Megeddon trade. I think traders are much better prepared for that right now. Much more uh expecting or tolerant of that type of an outcome. Uh right now. So as we mentioned Google another fantastic week last week coming off some of their highs but just firmly and just solidifying its level here well above 300. Um really nice to see. You love to see it as a Google holder. Uh so last week we had a trade of the week. If you tuned in you saw it. If you're a trading zone subscriber it was sent to you uh early in the morning last week. We sold uh this was for a Black Friday Cyber Monday trade. We sold the 105 100 put spread in December. We collected 150 this morning. Exited this position for 29 cents. So not a bad weekly return here. Of course, a Walmart fantastic week here bounced right up bounced right into all time highs after Black Friday. Just absolutely crushing it. Exactly as expected. This week trading some volatility in in Nvidia. We're going to be looking at the at the money which is at the 180 for Nvidia. I'm expecting it to move away from this and I want to own an upside call but I want to kind of finance it but just kind of capitalizing on my expectation that it's going to move. So I'm actually going to do this by selling a call butterfly. Selling the 160 180 200 call butterfly and then I'm going to add on to that 180 200 call. So essentially selling one 160 buying three 180 selling two 200 calls. I'm going to collect money to do that. If it settles here right here at 180 that'd be bad. That would that would turn into $20 but if we move above 200 fantastic. I can turn I can make $20 total on this trade. If you go below 160 again that'll be just a small win on this trade. So that's what we're looking here and definitely want it to go to the upside. Absolutely obviously. Let's just take a real quick look again at Nvidia here where we've had some pain here. There's no question about it. We've had some pain. We're below this 200 day moving this 50 day moving average here at 186. So you know, I'm looking for more more downward movement or or there. That's that's obviously what we're looking for over the next month is just something just moving away from uh this uh this 180 strike is where the trade wants to go. That's where uh I'm looking for some movement in the video just getting uh getting away from where we are right now. Uh using volatility to my adv- advantage. So, that is the trade of the day. I remembered it. Hit me up uh uh in the comments. Um make feel free to leave a message. I would love I love seeing those. Makes you feel real good. Uh if you have any questions, feel free to shout me out. Uh it is always fun to uh do these trades for you. I really get excited uh doing it. I really get excited doing the research on it. Hope you like it. Uh if um you know, I'll be here again next week right here 12:00 Eastern. Uh you can have your lunch and check out what's going on in the market and hear a trade at the end. I hope you enjoy it. I'm Joe Tighe for Equity Armor Investments. Have a great week. You know how the financial world goes. Here comes the buzzkill. Please make sure to take some time to read this boring disclaimer. We will owe you one.