Powell Hour
This Week in the Market
This week is being defined by two moments: Powell’s remarks from Jackson Hole and Nvidia’s earnings report. Powell leaned dovish and signaled that rate cuts are still on the table, which has buoyed market sentiment—if he had held back, risk assets could’ve slid.
Now the spotlight shifts to Nvidia. As the AI bellwether, Nvidia’s results will reveal whether hyper-scaling spending is still accelerating—or if demand is beginning to fade. Expectations are sky-high. A strong print would reinforce tech outperformance, while anything less could drag down the broader growth complex.
Current Trade: Shorting ATYR
aTyr Pharma (ATYR) is a clinical-stage biotech company primarily working on a treatment for pulmonary interstitial lung disease.
Upon a deeper dive, we noticed they've been desperately trying to make their treatment work for over a decade, with no real progress.
We believe their underlying science is flawed and we've initiated a 3-part short position in preparation for their Phase 3 trial results in mid-September.
aTyr Pharma (ATYR) – Short Stock + Short Puts + Buy Calls
The position is structured as a hedged short with defined risk parameters rather than having the default "infinite risk" of short selling.
Step 1: Short shares: above $5.5 is ideal but above $5 is fine.
Step 2: Short puts to gain a credit: $3 strike price is what we did but $2 could work
Step 3: Use the credit to buy calls: $12 strike price is the only one that makes sense.
Note: All options are expiring in September as that's when the trial results come out.
Disclaimer: We own shares of NVDA and are short shares of ATYR as of writing this. The content in this newsletter is for informational and educational purposes only and should not be considered financial, investment, or legal advice. A4K Capital and its affiliates are not responsible for any financial losses or decisions made based on the information provided.
