We’ve been talking a lot about market cycles on each Sunday video – how to anticipate them, ride them and exploit them.
My biggest gains, biggest trades, and most confident setups come as a cycle ends. Sometimes cycles are overall market euphoria other times, it’s just a sector or theme that is hot (like we discussed the last two weeks.
I would argue that we just went through a very large but, more importantly, WIDE-ranging market cycle.
What do I mean by that?
We had a 100% bounce off lows on TSLA, which fueled a lot of sentiment to the + side. We had a huge BTC bounce off lows which fueled the funny money in the market. FOMO came back to small caps and we had 2-3 daily gappers of 100-200% + movers.
We just had a huge break out on BBBY that fueled AMC GME and the rest of the meme names to some 20-50-100% moves before things started to unwind again. This gave the apes a sign of life again before taking it all away by weeks end.
We had LCID W CVNA and COIN all squeezing out. All very similar moves. People get used to doing the same thing over and over. Perhaps selling calls over and over because it’s free money until it’s not. Occasionally too many people end up doing the same thing and as you know things get crowded. Every now and again, we get that over extension that brings in a ton of liquidity and instead of fading right back it holds on. When it holds on, people don’t have a Plan B and end up stuck on the wrong side in a big way causing secondary squeezes as we saw on all.
And at the same time we had a sector/theme start up — which was clearly the artificial intelligence names (AI). Those focus names were AI BBAI and SOUN.
The most important thing right now is to focus on risk management and not getting too lenient when wrong. Watch your sizing on trades if you’re anticipating/expecting the same liquidity – this is the market where you’ll get chopped up trying to repeat the same trades on lower liquidity names.
2 notes for this week:
- Stay tuned for the T4AC San Diego Premiere tomorrow
- Our sale ends this week. If you want to join IU at a discount, now is the best time.
Video Scan and Game Plan
Stocks to Watch
XPON $3.20-3.50 level given on Friday worked really really well as long as traders behaved. Big squeeze out and exhaustion before close right into that level again before grinding back AHs. I am hopeful we take out the daily resistance and then they possibly walk sort of like GSUN.
SOUN amendment after hours on Friday doesn’t mean slam it — but understand what their goal is going to be moving forward. It’s possible AI gets soaked over the next week and if it does cautious with a strong bias but if it doesn’t or this has relative weakness take note.
BBAI same as rest – great key lines this week and incredible opportunity.
AI look left – use same lines we’ve been using more on the broadcast come Monday morning. Cautious coming in with too much of a bias prior to 945-10AM
CVNA very similar to the LCID unwind so far. Cautious stepping in front but interested in all morning shoves AFTER they prove to fail to follow through to fade cautiously.
Failed Follow Through:
HILS nice one on Friday – ideally morning rip then fade off again.
SQL same as HILS.
LUCY looking for ARQQ style trade – same fade idea on any good rips – just like GSUN
GSUN so far working very well – same concept as ARQQ etc.
Continuation:
OSCR monitoring for break out
TKAT so far good – no position but held well.
CETX no position but nice from Thursday scan – continued break out just hvae to watch if this turns into anything circuit halt ish etc.
TCBP notable that it hasn’t faded off – this could turn into a sneaky grind for big picture idea.
Staying Familiar:
Actually have a few good picks. I added 4 to my list. I like the way you laid this out good breakdown.