Hey everyone, welcome back to another Sunday Scan.
The market craziness continues well after Elections Day. Last week, we saw some great opportunities between PLTR, SMCI, GME, Crypto Basket, Quantum Names, Nuclear Names, etc.
It’s good to be aware of existing and upcoming market environments. As we start to approach the Thanksgiving Holiday, liquidity may subside, thus requiring an adjustment in your approach. Whatever you got away with trading over the last several sessions may not work in the upcoming couple of weeks because liquidity will tighten up.
Let’s get into the scan.
Video Scan and Game Plan
The Playback
TSLA Great example of the option cycle. Catalyst, bullish flows all the way up to monthly options expirations week (third Friday of each month). Then, as we approached the middle of mopex week, the mean reversion trade played out as option hedging because less necessary with decay hitting the calls.
MSTR same as Tesla with the option cycle but held up better with BTC still hanging around at highs.
DXY big move in the dollar with policy decisions and the Treasury Secretary pick going to be announced soon. Could be risk-off for markets if it stays up here. Sometimes large moves in the currency markets spill over into the equity markets as we saw a few months ago with Japan.
TNX bond yields are also at highs which can lead to risk-off action. Not a big impact yet but if it does start to hurt things then IWM and KRE could be targets for downside.
IWM small cap rate sensitive index could have a further correction if markets get into risk-off mode.
KRE same as IWM.
Main Watches
PLTR Quite the funny turn of events on Friday when one of the board members ended up deleting his entire Twitter account because of a previous tweet. Type of a ticker that will have a wide and dedicated following so that needs to be accounted for when trading it. The daily chart reminds me of the SMCI move early in the year as it started breaking out above 350. Just an idea to keep in mind, there are obviously more differences than similarities between both businesses, but worth taking a deeper look. As for next week, I’d like to participate in any gap-up parabolic and fail move – or – pops along trend, ideally if vwap stays heavy. I think the open will be volatile, but once/if a trend is established, then the opportunities may be cleaner/easier to see.
SMCI Had a nice bounce after hours on Friday on the news with NASDAQ. The looming dark cloud of delisting has kept the pressure on over the last several weeks, so maybe we’ll see some life return to it for a few days. One thing to remember with a ticker like this is its vulnerability to headline risk. So, regardless of whichever direction you trade it, be aware of the risk exposure. On Monday, I’d like to participate in any gap-up/exhaustion and look to fade momentum as it proves. There has been no change to the underlying story, so I feel any pops will be met with some pressure.
Crypto Basket – COIN MSTR MARA Not in any particular order/preference. Clearly, BTC is in the spotlight, so this basket will have its opportunities. We have seen sector/theme moves recur over the years, and this is no different. I like to use higher timeframes to define areas of interest/liquidity, and take opportunities around them.
IONQ Looking for a gap-up parabolic and fail.
CERO TCBP MTEM SPPL Just good to see some examples of the current environment.
TSLA / RIVN EV tax credit cut news will hit the smaller / newer EV companies more than TSLA long term since it has had such a headstart and has established infrastructure and profitability. Tesla’s next leg up may depend on the market but 300 is a key pivot area to keep in mind. Bullish above, bearish below.
Bio basket XBI LLY NVO VKTX MRNA all getting hit on the RFK Jr. news. Regulatory uncertainty may cause some big unwinds in the big winners from this year like LLY so keep an eye out for what has room to the downside and is acting the weakest.
NVDA Earnings this week and will have a major impact on the AI sector. NVDA is the last one standing for the most part as the rest of the names unwind. If NVDA has anything other than a perfect ER the entire sector will get smashed.
ASTS squeezed out to 30 before earnings and then gapped down. 20 is key area for further unwind or for it to hold and chop.
LMT NOC BAH government contract cut theme emerging with DOGE efforts to cut government spending. LMT has 75% of its revenue from government contracts so looking for downside as some of those may get slashed as budgets get adjusted. BAH has 98% of revenue from government contracts and NOC has 30-40%.
Thank you Chris & Stan.