The Big 3: CAT, GLD, EBAY

The latest episode of Schwab Network's 'Big 3' features Don Kaufman of Theo Trade delivering three high-conviction trades amid a volatile inflation backdrop, challenging the notion that quiet markets are safe. Kaufman opens with a bold bearish call on Caterpillar, arguing the industrial giant has become a 'tech stock' in valuation—trading at a 45 P/E despite being a capital equipment leader—making it ripe for a sharp correction. He executes a $6 debit put spread targeting a $80 drop by August earnings. On gold, he takes a contrarian bullish stance on GLD, betting that persistent inflation and market inertia will eventually trigger a breakout, using a $2.25 debit call spread with July expiration. Finally, he shorts eBay with a modest $1.30 debit put spread, not expecting a collapse but a pullback to $100 after the failed GameStop takeover drama. Rick Ducat’s technical analysis confirms overbought conditions in Caterpillar, range-bound consolidation in GLD, and a fragile upside in eBay, all signaling potential reversals. The episode underscores that in uncertain times, the most dangerous trades aren’t the obvious ones—but the ones that look like winners until they don’t.