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Welcome back to Signal vs. Noise, where we take a look at unusual activity on the options tape and ask if there's a deeper story underneath. Jamal, we have to start with the obvious here. My Knicks are in the NBA Finals, but trust me, there's a market parallel here. Everyone's busy talking about the Spurs, Wembanyama this, Wembanyama that.
No one wants to talk about that 6'2 guard who holds the Illinois state record for number of wins in high school. What about the guy who's won two college basketball championships? I'm talking about the Jalen Brunson's of the world, the Jalen Brunson's of these markets, Jamal, because beneath the surface right now we're watching a rotation away from the AI MVPs and AI MVP contenders of the world like the Wembys out there and into some of these secondary names, the folks that are putting in the actual hard work that win championships these days, maybe the overlooked folks because they're too small or maybe because they're software stocks.
This is a horrible analogy, Jamal, but we're going to get into it. We're looking at the tape today for a bullish traded ServiceNow. We have two bearish outlays in huge runners recently, Micron and Marvell. Save the audience from my insufferable Knicks apologies and attitudes. Go into the trades. Now, it it is interesting and congrats to your Knicks, by the way.
It it it's interesting. I'm going to I'm going to say now at the outset there's this is a little bit of signal and a little bit of noise. I mean, I think the signal is that we're seeing some bullish activity in an area that's been been down, right? And we've seen it run more recently, but it it's pulled back in the last two trading sessions.
But again, we're seeing some bullish activity there. And on the flip side, you're seeing some bearish activity where there's been strong bullish activity. And so, but at the same time, it's not in the normal way that we're used to seeing things here on Signal vs. Noise. So, we have there's there's ServiceNow and then there's Snow, which obviously you can get confused between the two at times uh just based on the nomenclature, but seeing these two stocks again, we've talked about the recent bullishness and the the couple of days of pullback more recently, uh just to level set here.
And then we got Micron, which everybody's been familiar with recently. I mean, it's it's moon it's mooning, as they say, Micron. And Marvell, which in recent times has had a really strong rebound um here over the last couple of months and even further push to the upside. So, seen some bearish activity there.
Now, when we head over to the Unusual Whales app, uh we look at the ServiceNow trade first, and that occurred yesterday towards the end of the day. Um and, you know, nothing really to dive in here too heavy real quick, just to show you at the end of the day, overall, you had open interest of 2274 versus volume of 2884.
Now, it doesn't look like all of that carried over as far as staying on the open interest line. There was obviously a big uptick, as you can see, 1600%, but it did not all take, as you can see, otherwise we'd be at 5,000 and change. So, there was clearly some changing um intermingling there as far as people probably closing out some positions, if you will.
But, uh in this Micron, you know, typically, for those who've seen Signal versus Noise on the regular when we're looking in this Unusual Whales app, we're able to see a large block of trades. Now, typically, when we go into the Unusual Whales app, we're looking at ServiceNow here, we'll usually see a large block of trades on the size, right?
And in this case, we're looking for something in the order of about 2,000 contracts, and it's there, but it's in small lots. You can see it went up uh at in in multiple lots here. And so, uh when we look at around the 1440 time, just going to going back in time to kind of show you, uh the market was around 1430 at $15.
And if you look at the options markets, they are more than 50 cents wide in a lot of these, so that's not surprising. The interesting part is when it gets to about 30 cents wide. So, 1470 at 15, you can see those are starting to go up at that price, $15, right? And like I said, this occurred towards the end of the day on June 2nd.
And you can see eventually that bid shifts as they paid 15, the market moves, stock is moving as well. So, there's a lot going on here, but my point being, there's not a large 1,000 block of trades. We said 2,800 of these went up as we mentioned 2,800 right there. There's not 500 lot or 2,000 lot. There's just a lot of small lots, 22 lots, 71 lots, 1, 2.
So, while there's activity and there's buying occurring, it's very small. So, that's why I say while there is a signal and they're buying calls, it's basically kind of noise. I mean, who wouldn't want to buy and take some exposure in the service sector right now? The SaaS sector I I should say for these these software names.
Similar deal with Snow. Um we saw the in in Snow, we saw the 255 call in the June 12 expiration. Now, if there's anything I will make um a point of is probably pointing out that they went and bought calls in the June 12 expiration, which is a little under 2 weeks away in Snow, versus and now they went out all the way out to August.
So, that's clearly a much longer play, right? Uh and so in this Right? And so in the Snow, I mean again, similar deal, like it's a lot of smaller contracts occurring near the offer. She can see Well, that's a weird one, 770 offer, bid 770 offer. That's a quick quick snapshot right there. But just again, a lot smaller lots that you're seeing on the bullish side.
So, it's signal, like I said, because people are going after service ServiceNow and and going after Snowflake, if you will, because there's there those SaaS names that have been down and out, and so they're trying to get some exposure in there, but this is not like a big signal as far as a huge lot of options going up at any one given time.
You know, there's been this small subtle shift in corporate commentary in recent weeks. Bank of America uh the Bank of America CEO kicked this off and we highlighted this on our Futures Power Hour and Overtime recently. But the tokenomics are reaching a point where companies are burning through their AI budgets for the entire, you know, FY 2026 in the span of a few months.
And it's reaching the point where they can't replace all of the human labor that helps maintain and build these systems. It's just too costly to run it through AI alone. So, this this subtle shift in the corporate discussion around AI's ability to uh burden running an entire business effectively mhm not maybe happening immediately here.
So, software companies are bouncing back uh you know, you look at the recent reports that we've had from these companies. ServiceNow's AI customer count is just surging higher. Snowflake just signed the largest deal in its company history. Uh it's becoming clear, I think, to market observers that no, no, no, you're still going to have to have that software layer that sits on top of everything.
You're not going to be able to fire everyone right away. The AI apocalypse that was priced in for software, the SaaS apocalypse, if you will, that was priced in earlier this year, February, March, April. We overdid that. Yeah, SaaS apocalypse, I like that one. That's a good phrase. Again, looking again, I did fail to mention that Snowflake, these options actually went up today as we're sitting here with this recording and about 5,000 have gone up versus an open interest of 167.
Now, that's the type of stuff we do like to see here on Signal versus Noise. And we'll look tomorrow to see if this open interest increased cuz again, this is a June 12th expiration trade. By Friday, they'd love to make good on this one. So, we'll we'll end up seeing what happens here. But um just to again, with the the same thing with the Microns, uh these went up yesterday uh and on June 2nd, and you can see there's volume, but again, it's not huge large block of volume that we're typically used to seeing.
Similar deal uh for both of these put trades that we're seeing. Marvell, similar deal. Not While there's 1,500 that went up, we see an open interest of 1,200 the following day. It's not all of the open interest and again, it's not like there's 1,000 of these that went up. So, while there are some activity going on and there's clearly activity that sort of suggest there's buyers of downside in the chip names and buyers of upside in the software names.
It's not in the typical signal versus noise like we usually see, but we'll keep an eye on that snow. Yeah, between Micron and Marvell, I think you have an interesting story here. Jamie Dimon recently said the market's exuberant. I've seen this before and then specifically mentioned Micron. So, when we're looking at the stock how it's moved in recent years, 35 to 1,000, that's adding half a trillion dollars of market cap in just 48 trading days.
Yeah, that's that's big. That's a lot. Uh Everyone is expecting perfection right now. Now, granted, I made the valuation argument elsewhere that if you're leaving the commodity boom-bust cycle of semiconductors, then Micron's forward PE at the time was a six, it's now at 10 and a half. It may still have some room to run to the upside.
But Jamal, this is a very crowded position right now. It's run very far, very fast. There's signs of froth and excess in the market as we've seen elsewhere. Folks are starting to try to maybe call a top if you will. I find that interesting behavior because it's not exactly bubble behavior. I mean, well, just look at the chart here.
August 1st, 2022, the stock is trading $62, Chris. I mean, that is not that long ago for a stock to to run the way it has. And then even even wilder is again, going back to August of 2025, the stock was $128. Now, while we've seen this type of activity before, it it does it does usually result in situations where people are trying to call a top.
We'll see how much further it goes though. People tried to call a top in Nvidia a couple of years ago too and that didn't exactly work out. So this week we have an options market that's buying software and fading hardware a little bit and perhaps this is a handing off of the theme here in the AI trade.
But that could be good. We need to see a broadening out of breath right now in this market. Perhaps that's a signal. Instead of chasing this thing higher in the hot names in semiconductors, the investing public is now moving on to names that would still be AI beneficiaries that were down on their luck thanks to a misunderstanding of the environment that a lot of us played into.
What do you think the signal versus noise though in today's setups chat? Let us know in the comments below. This has been signal versus noise. You've been watching tasty live. Like, subscribe for more great videos.
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