Traders Mike and Jermal discuss a strong market rebound as the S&P 500 futures turned positive, erasing Friday's losses amid increased probability of the government shutdown ending soon. The rally, which saw the E-mini S&P futures up 65 points and NASDAQ futures up nearly 400 points, was particularly strong in semiconductor stocks including AMD, Micron and NVIDIA (NVDA). The hosts closed multiple bullish positions to reduce risk after the significant reversal, with Mike noting he typically discounts probability calculations after a 200-point S&P reversal and instead focuses on risk management by taking profits. Despite the rally, uncertainty remains regarding the Fed's November decision, with a 60% probability of a 25-basis point cut versus a 40% chance of rates staying unchanged - a significant shift from a month ago when staying unchanged had only an 8% probability. The traders discussed position management strategies including calendar spreads and triangle/strangle techniques for ongoing market exposure while managing delta risk.
