00:06 Josh
Stocks have been seeing some gains so far in October with the major indices reaching record closes. However, our next guest outlines why there is reason to be cautious and what that means for traders. Bob Lang, explosive options technical analyst joining us here now with the Options Playbook sponsored by Tasty Trade. Bob, great to see you, especially on set, sir. Uh let’s start here. So the VIX perking up as it does tend to do this time of year, right? How do you play that, Bob? You know, are you concerned enough to buy protection on the general market?
00:36 Bob Lang
Well, I look uh Josh, great to be with you. So I look at volatility in in terms of time frames, right? And when the market’s been up for 7, eight, nine months of the year, like it is this year, it tends to lead to bullish behavior to the end of the year. And when that happens, we usually see a suppression of volatility. Now, the VIX is hovering around 16 17%, which is a little bit lower than normal. The average uh VIX is about 19 20%.
01:05 Bob Lang
But it’s a little bit lower than normal. It it’s really feeding into more money coming into the market. Lower volatility tends to make people a little bit more relaxed, a little bit more uh aggressive into the markets. Um I think that that can be a little bit worrisome, especially since we’re worried about um some uncertainties coming out here. and anything could hit out of left field, you know, whether it’s tariff related or whether it’s AI or whether it’s something else or some earnings uh shortfalls coming up the next few weeks. I think it’s really behooves most people to have some protection on and either buying volatility or else you’re buying um puts, put options are very cheap right now. um with the VIX been at 16 17%. So I think that that’s a that
01:52 Josh
Your bottom line is some caution is warranted here.
01:53 Bob Lang
Absolutely.
01:54 Josh
Okay. I want to talk about AI as well. Lots of hot talk about an AI bubble from, you know, some very well respected investors saying, hey, they hear echoes of 1999. What’s your what’s your take on that?
02:06 Bob Lang
Josh, you know there’s always a bubble going on. There’s always bubble somewhere. Um I I look, I go back to the the late 80s, right? There was a bubble in biotech. In the late 90s, there was a bubble in uh .com names in technology.
02:18 Josh
Does a bubble have to burst for you to know there was a bubble?
02:20 Bob Lang
No, in fact, actually, you know what? The people who identify bubbles are the ones who actually are not into it. I was in the bubble during the late 90s, during the .com and I was loving it. It was great, making lots of money. And I’m sure right now, if there’s a bubble going on in AI, there’s a lot of people making money. Are they complaining at all? Absolutely not. So, you know, it’s it’s only at the end of the of the ride that people are getting upset and and and disgusted about.
02:50 Bob Lang
Look, I mean there was some um talk from uh Paul Tudor Jones the other day. talking about, Yeah, I think yesterday he said, you know, we’re in a bubble right now similar to that we’re late 99 2000. And he did reference the period between October of 1999 to March 2000 where the NASDAQ went up 80%. Well, I I remember that time and I remember that a lot of short sellers got blown out of the water then during that six- month period.
03:22 Bob Lang
So, you know, I I think you just have to keep it in context and keep the reference point is there of course uh that when you know, the market blew up and the Nasdaq dropped 72% from the highs in March of 2000 to uh to 2001. So, you you do have that reference point there, but I I do think that we really don’t have to fear the fact that we’re in a bubble right now. It’s just make money as you can.
03:48 Josh
Um, let’s get to some trades. Sticking with AI, talking about Google.
03:52 Bob Lang
Google. So, um this has been a stock that’s been one of my favorites over the past few months. And it’s up something 70% since the lows in April. Um it’s kind of consolidating right now. I do like the I like like the chart here. Um if it gets above 250, 253, it’s got some room to to run. So I’m looking at maybe like a like a March call for uh for Google, maybe even even to January of a little bit shorter term.
04:22 Bob Lang
But uh I’m looking at a call maybe paying about $17 in March. And if it gets past a certain level, about 253 to 255, this stock’s got some got some leg to uh to run. I think that in 2026, this is going to be the year of Alphabet or Google. I think with the with a positive business environment, you’ve got lower interest rates coming in over the next couple of months and into 2026. And then uh deregulatory environment and also, you know, we’ve seen uh Google come out and settle with uh with the with the English government. And they got lawsuits with Europe and I think even in the United States, they’re going to be settling these lawsuits and it’s going to be a tail one for the stock.
04:59 Josh
And OpenAI, they’re not going to come in and and just take search, Google’s bread and butter.
05:04 Bob Lang
I I think that Google’s got a a real good foothold in this and look, they’re number one in search. They they they continue to expand that footprint and search and there there really is no competition for them. And I I think going forward, um yeah, OpenAI is going to be some competition, but there’s also other competitors out there too. There’s Microsoft, there’s Amazon, there’s Apple too.
05:25 Josh
Speaking of Microsoft, you got a trade there, too?
05:27 Bob Lang
Like I really like Microsoft. It’s uh created a nice little bull shaped pattern here, Josh and it it ran up uh had an unbelievable run in the summertime, came back down, made a low here and it’s making the higher highs and higher low, which is our textbook definition of an uptrend. And I I do like um Microsoft going into earnings season. Um I think it’s going to make a run past uh 550 um and if it gets past that 550 marker, which is the old high back in early August, um I think it’s got to run to 600.
06:04 Josh
Bob, always great to see you. Appreciate your time and those trades, sir.
06:07 Bob Lang
Thanks, Josh.
