After a bullish start to the year, the stock market has returned to a tough tape. We kicked off the Presidents Day-shortened trading week Tuesday with weak outlooks from Walmart and Home Depot, as noted in their earnings reports, and the market dumped.
A normal market moves slowly and steadily higher, and then has these severe drops — it takes the escalator up and the elevator down, as the saying goes. In conditions like that, you can make money on the upside, and on the downside moves via puts.
But right now, we’re seeing the opposite where we’re taking the escalator down via slow selling, with these mega spikes to the upside where everyone suddenly has to buy every stock, sending them shooting 15% to 20% higher.
So it’s hard to buy puts, and calls aren’t really going anywhere in the chop.
That makes this more of stock picker’s tape — a pro’s tape — in picking your spots and being super picky with where you’re looking for trades.
For my money, the best thing to do in conditions like this is to scale back the size of your trades and be selective.
This is also historically a slow period in the market, and that is especially true right now. BUT… we do have some major economic numbers coming up
The Federal Open Market Committee releases its minutes at 2 p.m. ET on Wednesday, and that should be interesting because there’s a segment of Fed governors who want rates higher. But on the other side, we have Chair Jerome Powell, who clearly likes a bullish market, and that’s what he wants.
But enough of the macro stuff… you guys want TRADES. Check out Crush the Open up top. We covered trade ideas in Coinbase, Square and Nvidia — and a few cheaper, less risky ways to potentially play NVDA’s earnings call this week!
The trade ideas were all covered the last 7-8 minutes or so, and chatter on different ways to play Nvidia started around the 26-minute mark.
Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at [email protected] with your trading questions and I may cover them in a future video. You can also join my free Telegram channel, where I share market insights real time throughout the week, articles, videos and more!
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
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