Key Concepts
- Anchored VWAP (AVWAP): A technical analysis tool used to identify support and resistance levels based on specific events (e.g., earnings, highs, or trend changes).
- Agentic AI: AI systems capable of autonomous reasoning and task execution, a major theme in recent corporate partnerships (e.g., Microsoft/Ginko Bioworks).
- Mean Reversion: A trading strategy assuming that asset prices will eventually return to their historical average or a specific trend line.
- Liquidity Event: Significant market occurrences (like major IPOs) that create high volume and volatility, requiring specific risk management strategies.
- Sympathy Gap: When a stock moves in tandem with a sector leader due to shared catalysts or industry news.
- Bull Flag: A technical chart pattern indicating a consolidation phase within an uptrend, often signaling a potential breakout.
1. Market Overview and Key Trades
The session was characterized by high volatility in software and AI-related stocks, with significant divergence between tech giants and the crypto sector.
- Google (GOOG): Identified as the primary short trade of the day. Despite initial execution errors and being stopped out, the traders successfully re-entered the short position, capturing a move of approximately $4.00 to the downside.
- Marvell (MRVL): A standout performer, up 30% on the day. The stock is being closely watched for a potential move to the $300 level, supported by Jensen Huang’s (Nvidia CEO) bullish comments on its trillion-dollar potential.
- Intel (INTC): Experienced a failed short trade; the stock broke through the $107.30 resistance level, forcing a stop-out.
- Hewlett Packard (HPE): Attempted a breakout but faced significant profit-taking, resulting in a 10% pullback from its highs.
2. Sector Analysis
- Crypto/Blockchain: Described as being in a "definitive bear market." Bitcoin (BTC) and related assets like IBIT and MSTR are trending lower. Traders noted that MicroStrategy (MSTR) is facing a lack of confidence, with Bitcoin dropping below $70,000.
- Quantum Computing: Stocks like Rigetti (RGTI) and IonQ (IONQ) are in a consolidation phase. Rigetti is highlighted for a clean "bull flag" technical setup, though traders cautioned that these companies often lack fundamental revenue strength compared to their valuations.
- Exchanges: CME, CBOE, and ICE have seen recent weakness, potentially due to competition from perpetual futures offered by platforms like Coinbase.
3. Expert Insights: Brian Shannon (Alpha Trends)
Brian Shannon, author of Maximum Trading Gains with Anchored VWAP, provided specific technical guidance:
- Risk Management: Emphasized that traders should not let macro distractions (like SpaceX IPO rumors or geopolitical news) override price action.
- IPO Strategy: For major liquidity events like the upcoming SpaceX IPO, he advises using a 1-minute chart with an anchor on the first minute (the "negotiated" price) and the second minute (the start of "free market" trading) to define support.
- Profit Taking: He suggests using a 5-day moving average as a trailing stop for high-momentum stocks. If a stock closes below this, it is a signal to take partial profits.
4. Corporate News and Catalysts
- Microsoft (MSFT): Announced collaborations on "Agentic AI" with Ginko Bioworks and Salesforce, keeping the stock in focus despite recent volatility.
- Dollar General (DG): Reported Q1 earnings with a revenue miss, which the hosts labeled a "canary in the coal mine" for the broader consumer economy.
- C3 AI (AI): Upcoming earnings report is highly anticipated, with focus on sequential revenue growth and the return of founder Thomas Siebel as CEO.
5. Methodology and Frameworks
- The "Out" Strategy: The hosts stressed that every trade must have a predetermined exit strategy. For day trades, this often involves a hard stop at a specific price level or a trend line breach.
- Anchoring: Traders use the "anchor" method to identify where the "character" of a stock changed (e.g., a major earnings gap). Once a stock breaks below this anchor, it is often viewed as a sign of a trend reversal or a "disaster" scenario.
- Diversification: The hosts argued that while high-growth tech trades are exciting, maintaining a diversified portfolio (including stable names like IBM or Walmart) is essential for long-term survival.
Synthesis and Conclusion
The session highlighted the tension between high-momentum AI/tech trading and a struggling crypto sector. The key takeaway is the importance of disciplined execution over emotional trading. The hosts admitted to missing the "trade of the day" on Google due to poor focus, underscoring that even experienced traders struggle when they deviate from their pre-planned levels. The market remains highly sensitive to AI infrastructure spending, with companies like Marvell and Broadcom benefiting from the "scaling" narrative, while retail-focused stocks like Dollar General signal potential weakness in the consumer base. Traders are advised to stay focused on price action and anchored VWAP levels rather than reacting to external news headlines.
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