Trade of The Week - MacroVoices #526

Summary

• Matt Barry's thesis: AI is destabilizing not only software valuations but also the private credit complex that financed SaaS growth, with public proxy BIZD down over 15% year-to-date.
• Patrick Ceresna expresses this via options on BIZD, buying May 2026 $13 puts for convex downside exposure while avoiding negative carry from dividends.
• Erik Townsend is highly concerned about Iran conflict escalation risk, citing President Trump's threats to attack civilian power infrastructure, which could trigger retaliation targeting nuclear plants and desalination facilities, potentially causing massive human suffering and war crimes.
• Markets show limited reaction to escalation threats, with S&P futures only modestly lower post-speech, indicating disagreement with Erik's heightened risk assessment.
• Patrick views the recent equity bounce as an oversold retracement with no evidence of a bottom; another leg down is likely if it fails below the 50-day moving average.
• Disagreement on the dollar: Erik believes the dollar will eventually weaken due to erosion of US international reputation, while Patrick is technically bullish, watching for a breakout above 100 to 102-103.
• Crude oil spiked ~$8 after Trump's speech; Erik sees potential for considerably higher prices if conflict escalates, while Patrick notes a pronounced uptrend with possible retest of $120 highs.
• Gold corrected after Trump's speech, with the inverse correlation to oil fading; both speakers are long-term bullish, with Erik targeting $6,000 once oil-induced inflation threat recedes, and Patrick viewing dips to 4200-4000 as buying opportunities.
• Uranium fundamentals are "super uber bullish," but Erik highlights an outlier risk: military strikes on operating nuclear plants could sabotage the nuclear renaissance, though any weakness is a buy-the-dip opportunity absent such an event.
• Copper is bouncing off the 200-day MA but below the 50-day MA; Erik sees coiled upside potential if Iran conflict resolves, while Patrick notes correlation with precious metals and risk of further correction to the 5-handle.
• 10-Year Treasury yields are at multi-month highs around 4.37%; Patrick suspects resistance will hold in the 4.5-4.6% range amid higher inflation and economic slowing.