Market Setup
Traders come into the week cautious. The bigger driver is not Nvidia (NVDA) earnings but where the 30-year interest rate goes and what Kevin Warsh says at Jackson Hole at the end of the week. That macro worry explains the small fear showing in the market.
Every trade below defines risk up front: the most that can be lost is the price paid for the option spread.
Vertiv (VRT) - Bullish Call Spread
Vertiv (VRT) is down almost 4% on the day, at 25204, a much sharper drop than the broad market. It can move on Nvidia (NVDA) earnings, so it carries extra risk, but it works as a proxy for Nvidia. Major support sits at the 200-day moving average around 250-251, where it now trades. That supports a bullish stance.
The trade: buy a wide 265/285 call spread expiring this week, aiming to pay about $2. Hold it through Nvidia earnings. It either makes a big move up or busts.
Technical read (levels close to the trade strikes, 264 and 286): 286 was an old high and later a low before the drop. 275 was a repeated low and earlier a high. 264 was broken to the downside, where a gap opened. 233 was roughly the low after a February earnings gap up, tested many times; it broke briefly after last earnings, then recovered fast.
Overall shape is a downward sloping channel that started near 380 highs, marked between two white boundary lines. A blue upward trend line has broken. Price sits below three short-term exponential moving averages (EMAs): 5-day (dark blue, about 263), 21-day (teal), and 63-day (gold). The 21-day EMA comes in just below 243, a long-term support area. RSI points down, back below the 50 midline but above the oversold 30 line. The volume profile shows price on the edge of falling below a node running 253 to 275, which is thinly traded down toward the 175-200 level.
SOXL - Bullish Call Spread
SOXL is the Direxion Daily Semiconductor Bull 3x Shares, a leveraged ETF that tracks the whole semiconductor sector rather than one stock. It is down more than 11% on the session as semis rotate out of favor. It sits right at its 200-day simple moving average, which has given strong support before.
The trade: buy the September 18 expiration 110/125 call spread (about a month out), aiming to pay about $4 or a little less. The extra time is a cushion in case price goes sideways or dips slightly around Nvidia earnings.
Technical read: the most extreme recent low is near 91 (first green line), lining up with an earlier low from a small dip during the rally, with a small gap. Below that, 63 to 57 is another gap - a big move down if reached. To the upside, first resistance is near 138 (red line), a high after a downside gap; then 157 and 166 as more relative highs. A blue downward trend line that began near 302 highs was broken. A symmetrical triangle pushed sideways, and price is now moving below the lower edge.
The 251-day EMA (orange, one year of trading days) comes in at 10764, near current price - the longer the moving average, the stronger it is as support or resistance. The 5-day EMA (dark blue) near 120 is the first level to the upside and lines up with the old broken trend line. RSI moves lower, below the 50 midline, with a short-term downward red trend line. For a bullish turn, watch for that trend line to break and price to push back above the 50 midline. In the volume profile, a small node sits between roughly 105 and 120; most trading happened between about 35 and 55.
Mastercard (MA) - Bearish Put Spread (Contrary Play)
Mastercard (MA) is up close to 3% in the morning, at 596.95, up 2.8%. Payment names Mastercard (MA), Visa (V), and American Express (AXP) all have strong charts, even as data shows consumers spending less and getting into some trouble.
This is a contrary bearish play. Right above the 600 level is a top that has been major resistance before. Mastercard is only up about 4.5% year to date but more than 10% over the last month.
The trade: September 18 expiration, buy the 580/570 put spread, aiming to pay under $2, around $1.80. Not looking for a big selloff, just a fade off resistance. Risk is the price paid.
Technical read: old highs came in at 60162 (red line). 580 is first support - it matches an old high from October and the closing highs from around December onward. Intraday highs went past that level, but closing highs (seen as more important) never cleared it until the last session, which closed just a hair above. When an old resistance point is breached, it becomes a key area to watch: a bounce on a pullback, or a breakdown if the move fails. Further down, 555 to 552 was a small gap and holds old highs.
The price pattern is a channel between two white lines, consistent along the lows and copied across the highs. Moving averages stack shortest to longest in order and are spreading apart, so no sign of a trend break yet. RSI is in overbought territory above 70. The 5-day EMA (dark blue) comes in near 582, giving a confluence with the 580 old highs; a break below there would signal a possible trend shift. The volume profile shows heavy trading nodes around 560 to 570, which fits the lower 570 strike of the put spread - price could go quiet and consolidate if it falls back to that heavy trading level.
