FestivusCap
Public Equities Commentary
Comfort Systems USA and Vertiv look like juicy shorts into Friday's quarterly options expiration and Q2, because call options are holding them up. Quarter-to-date momentum stocks generally reverse after expiration; sometimes that lasts only a few days, but this could be a bigger trend change. x.com x.com x.com x.comÂ
A new SPY low alongside a lower VIX high often, though not always, signals a near-term reversal. A roughly 30% VIX jump makes a shallow rally likely Monday or Tuesday, but after breaking below yesterday's low following a trend-line backtest, SPY still looks headed for $750 soon. x.com x.comÂ
Short volatility should work from here, because even if volatility spikes, the spike would be followed by several days of falling volatility. x.comÂ
Vertiv's blowout quarter supports a possible new trade over the coming days. The 50-day average is also where the stock stopped after its dip, offering a pivot to trade against. x.comÂ
CarGurus, CAVA and Expedia can be faded after double-digit gains this week that nothing in their earnings outlook justified. The rally came despite rising commodity prices and the war, and likely reflects heavy short positions being covered as funds de-grossed, plus options expiration. All three are negatives in an AI world, with CAVA exposed through weaker white-collar and college job prospects. x.comÂ
Vertiv is a great company that should be a long-term winner even if it struggles short term. In the near term there is cautious optimism that it holds its new floor in the $250s. Its market cap is too high for personal buying right now, though. x.comÂ
