The Plunge Arrived Ahead of Schedule
You probably remember the 300k contract VIX call orders we mentioned a couple of days ago: $VIX 20260218 35.0 CALL$ $VIX 20260318 35.0 CALL$ . Unexpectedly, the sell-off has begun so quickly.
Currently, it looks like a bottom will be formed before mid-March, presenting a great buying opportunity at that time.
$NVDA$
Regarding this collective pullback in the AI sector, there's not much to elaborate on. The fact that there are fewer investable assets in the market is not a good sign. Looking back to 2025, it was a vibrant market where one could pick winners with ease—that was the best environment, not just for investing but for AI development itself.
Although I suggested considering selling puts if NVDA pulled back to 170 at the start of the week, the current downtrend doesn't appear finished. The price could potentially reach 160.
On Wednesday, a large order sold puts expiring in early March at the 140 strike $NVDA 20260306 140.0 PUT$ , opening 42.8k contracts. The strike price itself tells you the expected magnitude of this pullback—170 isn't attractive for institutions to "catch the falling knife," but 140 is worth considering.
A second large order was the purchase of 25k contracts of the 157.5 put expiring next week $NVDA 20260213 157.5 PUT$ . This suggests the possibility of a pullback to the 60-week moving average.
$SPY$
First target is a retest of the previous low at 670.
$AMD$
There were large sell put orders for the 180 put expiring on the 13th and the 160 put expiring March 6th: $AMD 20260213 180.0 PUT$ $AMD 20260306 160.0 PUT$ , with 14k and 13k contracts opened respectively.
However, based on the overall bearish option flow, a pullback to 150 cannot be ruled out.
$GOOGL$
Before earnings, Google saw a large ratio put spread order: buying one March 20th 320 put $GOOGL 20260320 320.0 PUT$ and selling three 280 puts $GOOGL 20260320 280.0 PUT$ .
Typically, such a structure isn't extremely bearish, but now it's harder to say. Google's stock price is likely to oscillate between 290 and 320 until mid-March.
$PLTR$
A broad market and software sector sell-off, and once again, PLTR is caught in the downdraft. While there's some logic to AI replacing other application software, the idea of the most critical government software being replaced by AI is almost laughable—definitely not happening in the next 5 years.
AI should serve to enhance application software, not replace it outright. Perhaps after this quarter, the market will realize the "replacement" narrative is far-fetched. That would be an excellent time to buy the dip. Microsoft's price point at that time would also be very attractive.
For PLTR, this decline targets the 110-120 range.
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