Semiconductor Bull Run Before the Midterm Elections
Today's market is quite eventful — oil broke through $100/barrel, gold rose, Bitcoin rose, Treasury yields rose, semiconductors rose, and even the VIX rose. The only thing that fell was the broader market. Macro inflation is heading higher, but the AI industry outlook is also bullish — it's a "each to their own" kind of dynamic.
I'd suggest paying close attention to GPT-6 Astra. The fact that it can lift semiconductors in such a challenging macro environment makes me wonder how much higher they'd fly if the macro environment were actually favorable.
Also, we should expect a wave of positive news from closed-source models going forward.
Pre-market, META announced its new personal AI assistant, MUSE, which has already climbed to #4 on the iOS download charts. The market believes this poses a risk of diverting traffic from Google's core search business, so Google's stock fell 2.6%.
First, on Google — no need to be bearish. Judging by the release cadence of GPT and META, all the major closed-source model providers are likely holding back big announcements, waiting in line to release them. This isn't just speculation — on Tuesday, a Bull Call Spread block trade opened, betting on the stock rising to 370 by November: Buy Call $GOOGL 20261120 370.0 CALL$ and Sell Call $GOOGL 20261120 440.0 CALL$. I think this is a bet on new models. Consider selling puts on dips $GOOGL 20260918 310.0 PUT$.
MUSE will go through a period of user feedback, which should temporarily anchor META's stock price — unless competitors roll out stronger rival products. The upside outlook is uncertain, given the turbulent macro environment, but selling puts is now less nerve-wracking than before $META 20260918 590.0 PUT$.
Maintaining my previous view: the worst-case pullback this week is to 755 — and that's where you can sell puts.
The result of Tuesday's short squeeze is that Sell Call block trades have rolled their positions — this week's 107 Sell Call was closed and rolled to next week's 115$INTC 20260918 115.0 CALL$ . After all, 110 is a major resistance level and will be hard to break through this week.
Despite the squeeze, the put strike levels have been raised significantly. The latest floor expectation is 95, with a Sell Put opening at $INTC 20260925 95.0 PUT$ . I originally expected a pullback to 100 before another rebound, but the trend is stronger than anticipated.
NVDA fell 2% on Tuesday, but IV didn't rise — clearly the market views a pullback from 230 as perfectly normal. Judging by the GEX distribution, the stock is likely to close in the 220–225 range this week, making a dual-sell strategy feasible. However, selling the 210 Put is still the safer play $NVDA 20260918 210.0 PUT$.
Call strike targets have been raised above 200, and even Sell Put strikes can now be lifted to 160 $SKHY 20260918 160.0 PUT$ . I imagine many people are hesitant to chase the rally right now because the macro environment is simply terrible.
Pelosi previously bought long-dated calls. The stock has now risen to the GEX call wall at 275. It will likely consolidate around this level. Consider selling the 230 Put $BE 20260918 230.0 PUT$.
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