Transcription
The market rebounded quite nicely today, and I'm going to show you exactly how I was able to predict that move and how I stack the odds in my favor when the market goes down. I'm also going to talk about two stocks that I have almost a 400k position in that I believe are right about to really take off here. So, let's go ahead and jump into it.
Remember, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. Results may vary. If you take a look at the portfolio, we are at brand new highs. Now, if you want to see me hit my 8-figure goal and follow along that journey, make sure to be subscribed to the channel by clicking the subscribe button down below this video. And if you get any value out of this video, please give it a thumbs up as I highly appreciate you being here and that greatly helps out the video.
So, let's go ahead and take a look at the realized gain/loss for today. We closed out some HOOD leaps for a 10% ROI, $3,000 in profit on the day. Now, that was a hold of three days, three trading days. So, pretty good. Obviously, results vary month-to-month, year-to-year, and it really depends on account sizes. But if you do want my free trade ideas, I give those away on my Instagram, my new X account, and my free newsletter, which are all down below in the description. Be sure to subscribe to those because they're absolutely free. And if you decide that you want to work one-on-one with me and join my high-level mastermind options trading university of 575 members, go ahead and that'll be at the top of the description where I have this free training and then all of my client testimonials right here that you could check out. I'll see you on the other side.
Now, let's go ahead and jump straight into it. What really propelled the market forward today? Well, there was a few pieces of news that came in over the weekend. The government shutdown is potentially ending and this House and the Senate will be reaching an agreement. So, that was really good to see, um, that ending. And then also Trump proposed, President Trump proposed a potential 50-year mortgage and normalizing that, uh, for the housing market. So, I think that's a very bullish and stimulative move, right? Giving people access to, you know, a lower monthly expense, um, on housing and, you know, giving more access to new home buyers. Um, I think that's a very, very smart move and especially if you're an options trader, you know, that is, uh, essentially you're allowing to free up capital, lower the monthly expense, and then plow, um, capital into the portfolio to be growing, you know, at substantial rates. So, I think that was very bullish. And President Trump also mentioned a potential $2,000 stimulus payment, uh, for low and middle-income USA citizens from the massive tariff income. So that is very bullish, yet slightly inflationary, right? Because we remember what happened last time with stimulus checks. Now, obviously, this is not applying to businesses like it did in 2021 as far as, you know, SBA loans and stuff like that, but still, you know, putting $2,000 payments into people's pockets, they're going to spend that money. So, uh, bullish for the market in the short term, but could lead to earlier inflation than expected, but we'll see if that actually goes through.
Uh, if we take a look at the CME FedWatch tool, which predicts basically the rate cuts that are upcoming, we could see that a December rate cut is still on the table, 63% odds. Now, the odds have gone down quite a bit from 72% last week down to 63, but odds are still on the table that we could get one in December, if not 99% odds of one coming in January. So, rate cuts are still on the way, which is also bullish for the markets, right? Because businesses and consumers can borrow at cheaper rates. So that's exactly what we want to see if we are taking on bullish positions, especially on the dip that we got last Friday.
So with that being said, how was I able to kind of predict the rebound on this particular move? Okay. Um, you know, the market fell. We fell all the way from up here at 637 on QQQ all the way down to 598 at one point and it bounced off this trend line. Now, this trend line was not the end all be all for, oh, you know, the market's going to rebound back. I actually did expect it to fall further, maybe down here to the lower Bollinger band, 588, or even a 10% pullback all the way down to 572, but that didn't happen.
Now, what I did look at was the VIX, okay? The fear and volatility index. This tells me exactly how much fear is in the market and how much cash I should have on the sidelines. And this thing spiked all the way up to 22.76 back on Friday. Now, I said if this thing goes below 20 by the close, we're most likely going to have a bullish Monday. And that's exactly what happened. Fear fell out, you know, fear fell off a cliff. Volatility fell off a cliff down into the 17s today. And I was able to kind of predict that move based off of studies that Tasty Live did back in the past, which I'm going to get into.
But let's go ahead and jump into the VIX cash allocation levels. As you can see here, VIX is currently trading in between 15 and 20, so there's still slight fear in the markets. 20 to 25% cash could be on the sidelines. I currently have around 18% and I might even bring that a little bit lower and not follow my VIX cash allocation because I'm extremely bullish at this point since we did have a decent-sized pullback. I think it was a little over 4% last Friday. Okay.
So, um, with that being said, let's talk about the VIX and why exactly I knew that this drop, if this happened, right? You know, fear would basically fall off a cliff. If we take a look at this study that Tasty Live did, okay, um, shout out to Tasty Live. So, basically, they did a study of the VIX and the average VIX spike and how long that VIX spike lasts. Okay? So, off a 15-day cycle, the average VIX is 20. So, we were above that, we're at 22.70. And the average duration for that VIX move is usually 9 days. Okay? So, if we go back, we could see that the VIX started spiking from back here on October 27th. So, 1, 2, 3, 4, 5, 6, 7, 8, 9 days. So, it literally landed right on the average studies from the past 20 years. A VIX, you know, basically in a 15-day period, right? Because it can't be a 7-day because it was spiking for more than 7 days. So, um, you know, with that being said, if the VIX spikes for more than seven days, we're in this 15-day cycle. The average duration is nine days upwards. Okay? So that's exactly what happened. Nine days upwards. Could we have gone an additional day up? Sure. But like I said, I've seen this happen before. When the VIX closes below 20 on the same day that it spiked, chances are that fear is going to dissipate. And that's exactly what happened. Okay.
Um, literally to the tea. We went pretty much not all in, but I was about 12% cash when VIX spiked up to 22%. Okay. And we grabbed those HOOD leaps as well. Okay. So, that's basically kind of where I decided, you know, let's, let's allocate some of that cash and really take advantage of this up move. And here we are. The, the market is heading higher.
Now, how high could it head upwards? Let's take a look at what the market makers are predicting in the next 14 days on QQQ. As you could see here, plus or minus $20. All right. So, this thing could go essentially all the way up to 643, right above this upper Bollinger band, or all the way down to about 600, which would be right at this trend line. Okay? So, that's kind of the expected range here and I think we're probably going to head higher and test new all-time highs within the next week or two on QQQ.
Now with that being said, I'm very bullish on two particular stocks. Okay? So, let's go ahead and talk about the first one, which is CLS, Celestica. Okay? Celestica is a manufacturer for a lot of the hardware components for data centers, AI data centers, right? The switches for all the data centers and, uh, they obviously manufacture lots of other things. But I really like this play because this company is not, you know, it's not super sexy. It's not talked about very much, but and the PE ratio is decently low being in the AI space and they have that moat around them being kind of the picks and shovels of the AI, um, revolution. Okay? So, 55 PE ratio. Uh, their margins are increasing, right? And I'm really liking their last earnings report. So, if we look at their earnings report, 12.2 billion in revenue for third quarter 2025, which is a 26% year-over-year growth. So, double-digit growth. All right. And if we look at some other slides as well, if you see their revenue, their compound annual growth rate is currently at 19%. So, again, double-digit growth. All right. And I'm going to scroll down to this slide right here, which illustrates all the little parts that they make in the data center, the management switches, the scale-out switches, as you could see on the whole rack. Okay? They're making a lot of these components, um, for the data center. So, they're needed. They're in demand and data centers are, they literally can't create enough data centers right now. They're expanding so much. All the companies, Meta, Amazon, Microsoft, right, are all expanding data centers. So, um, Celestica is a beneficiary of that.
Now, if we scroll down as well, I'm going to go to basically their market share. You could see that they have a 20.41%, um, market share for Ethernet switches. Okay? And their main partners are some of the biggest companies in Silicon Valley. We have Broadcom, AMD, Intel, Marvell, right? So, they have huge partnerships here to provide these manufacturing solutions. So, this is a company that's kind of under the radar that has been giving really good returns for me. And, uh, if we take a look at the charts, one of the most beautiful charts in the stock market, um, in the past couple years, upward trending. Every dip is being bought and we're kind of in this consolidation phase right here where we were last, you know, couple months. Um, and it tends to, when it trades sideways like this, there's lots of premiums in the put options and it tends to explode out of these consolidation periods. So, right now, I think, um, you know, Celestica is still undervalued and this thing could head a lot higher.
So, I'm going to show you the trade that I'm making right now. Let's dive into the portfolio. Remember, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. Results may vary. But if we take a look at the account, you could see my CLS position is currently $210,500 in cash-secured puts. This is the largest position in my portfolio. So, I put my money where my mouth is, and you could see that I'm very bullish on this stock. So, right now, I have the 290s, the 300s, and the 305 cash-secured put options to collect about $5,900 in premium. If I were to enter this stock today, right, I would probably go out 32 days or, you know, anywhere from 15 to 30 days out. I'm just going to go out to December 12th. And if we sold the put option here, I typically go 30 delta on this stock. So, a 30 delta option, meaning it has a 30% chance of expiring in the money or if the stock fell down below this strike, 315, which is the 30 delta, I'd be forced to buy 100 shares for $31,500. Right now, if I sell this option, this put option, I'm going to collect about, let's call it $1,480, which is a potential 5.5% ROI. Results vary based off where the stock's at, but you can see how much premium is in these particular options.
Now, 315, if we go to the chart, 315 is going to be down here. And from all-time highs, we could just kind of see exactly how far of a discount that would be. That would be about a 13.95% discount from all-time highs. So, I don't mind getting assigned there as it's a discount on the stock. I got paid to dollar-cost average and I expect the stock to go a lot higher. So, I expect the stock to probably break out of this 360 level and maybe head up towards that 400 level. So, very bullish on Celestica, CLS, and I have a large position and I'm continuing to collect premiums on this stock. So, that's my current position there.
Let's talk about the next stock, number two stock that I think could break out here into this next run, which is SoFi. Okay? SoFi is currently trading at $30 below all-time highs. This is exactly where we want it. It went up 8% today and current PE ratios in the 40s. So, I'm really liking this stock. Margins are increasing and the, and the, um, the overall business is growing. If you look at their quarterly results, their compound annual growth rate as far as members go is 50%. This stock doesn't have any slowdown in their members that they're accruing here. So, they're releasing more products, options, crypto, everything like that. And they serve a portion of the market that's a little bit different than, let's just say, a Robinhood, right? SoFi is known for their student loan refinancing, for their mortgage refinancing. If you ever gotten a mailer in the mail saying, "Hey, you know, you could refinance a student loan at a lower rate." That's what SoFi does. They have a lot of members who are going to school, higher education, maybe they have homes that need a refinancing at a lower rate, and they're able to help those people out and then get them on other products such as investing, their investing, um, platform, their crypto platform, their high-yield savings platform. Right? So, that's what I really like about SoFi. And their marketing is really good as well. They have their own stadium that they, uh, you know, obviously purchased the rights to put their name on that stadium and their compound annual growth rate as far as their revenue, their EBITDA is growing and growing. So, this is a company that I like to see with a lower PE ratio.
Another thing that is not talked about is that, uh, Trump administration would consider selling parts of the federal government's roughly $1.6 trillion student loan portfolio to the private market. SoFi said that they would be open to buying or taking that 1.6 trillion in student loan debt, right, and servicing it, which is would be huge, would be a huge revenue add for SoFi. So, I think that SoFi has many multiples ahead of it. It's still a very small company in regards to other traditional banks. Okay? If we look at their market cap is 36 billion. If you look at, let's go to like a JPM. Okay? Now, I'm not saying they are going to be a JPM, but they could compete, right? Which JP Morgan has an $862 billion market cap. So, I really like SoFi, their branding, they're, you know, geared towards, um, the younger generation as well. And just an overall really quality product. So, with that being said, they're trading near all-time highs, but they haven't breached them here at 32.66. So, I think this thing could head a lot higher here considering it spiked up quite a bit today, over 8%.
So, how we're trading this, it just made a bullish crossover on the RSI, by the way, and MACD looks like it wants to make a bullish crossover as well. But, let's go into the portfolio and we're going to go over that position. So, as you can see, my current SoFi position is $182,700 in cash-secured puts. I have the 27s, the 27 and a halfs, and the 28s all to collect around $4,800 in premium. Now, if I were to open a new position today, I would probably go out somewhere around 30 days. So, we'll go to December 12th, okay? And I would go to, I would get aggressive here. I'm going to go to the 30 delta put, okay? Which is the 29 delta, which is the 28 strike. If I sold this option today, I would collect $118 in premium, which is a potential 4 and a half% ROI in 30 days. Now, obviously, results vary based off where the stock's at, but you could see how much premiums are in these options as well. And 28 is a great price to get assigned SoFi if you want to ride it for, you know, for more appreciation. But as we could see from all-time highs, okay, 28, if I got assigned there, that would be a 14% discount. Get assigned, I could run some covered calls and wait for the stock, right? Wait for the stock to kind of rebound and potentially cross new all-time highs into this 32 to 34 territory. Now, I expect a move there. I think that we definitely could up could get up into this 34 to 36 area by end of year. And if we look at what the market makers are pricing in in 32 days by, you know, mid-December, they're expecting a $5 move from here. So, yeah, they're expecting a potential 35 price point here on SoFi. So, really liking SoFi and I think it's one of the best companies to trade the wheel strategy on just because it's the stock has been so resilient. The chart has been great and it's been providing enough volatility to collect really good premiums on a cash-secured put. So, really loving SoFi in the portfolio.
If you enjoyed this quick update, please give it a thumbs up and I'll see you in the next one.