SpaceX Drops 10% as Inflation Fears Build Into PCE Week | Stock Market Live

Key Concepts

• Volatility Halts: Regulatory mechanisms that pause trading for at least 5 minutes when a stock moves ±10% within a 5-minute window.
• VWAP (Volume Weighted Average Price): A key technical indicator used by the traders to determine support/resistance and entry/exit points.
• ABCD Pattern: A technical chart pattern used to identify potential trend continuations.
• Cash Secured Puts (CSP): An options strategy used to generate income or acquire shares at a lower price.
• Hyperscalers: Large-scale cloud providers (Google, Microsoft, Meta, etc.) driving the current AI infrastructure and compute demand.
• HBM (High Bandwidth Memory): Specialized memory critical for AI GPUs, currently experiencing supply constraints and high pricing power.

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1. Market Overview and Trading Strategy

The traders emphasize the importance of "taking a hit" and maintaining emotional discipline when trades go against them. They advocate for flexibility, noting that if a primary target (like SpaceX) doesn't provide a clean setup, traders should pivot to related "sympathy plays" (e.g., NASA or Rocket Lab) that respect technical indicators like VWAP.

• Key Trade Management: The hosts discuss "free rolling"—using unrealized gains from a winning position to add to the size without increasing overall risk.
• Market Sentiment: The hosts express a bullish long-term outlook on the AI/Tech sector, specifically focusing on the "AI buildout" and the massive capital expenditure (capex) cycle of hyperscalers.

2. Specific Stock Analysis and News

• SpaceX: The company signed a $6.3 billion compute deal with Reflection AI for access to Nvidia GB300 chips at the "Colossus 2" data center. Payments of $150M/month begin July 2026.
• Micron (MU): Bernstein raised the price target to $1,300. The stock is benefiting from HBM demand and tight supply. Analysts expect margin peaks in 2027 before new capacity comes online in 2028.
• Lucid (LCID): The company is cutting 18% of its workforce, eliminating the COO role, and canceling the second shift at its Arizona factory to save $158M annually.
• Meta: Mark Zuckerberg is replacing the head of WhatsApp with Kunal Shah (founder of Cred). The company is facing internal morale issues related to high-end engineers being tasked with AI labeling.
• Chevron (CVX): Signed a 20-year deal to supply natural gas to Microsoft’s "Project Kilby" data center in Texas, which will consume 2.67 gigawatts of power.

3. Technical Explanations

• Halts: The hosts clarify that halts are automatic exchange-enforced rules based on speed of movement, not subjective analysis. They advise traders to ignore VWAP and EMA during a halt, as price action is dictated by volatility rules.
• Volume/Price Divergence: A warning sign identified by the hosts where price makes higher highs, but volume bars show a declining trend, often signaling an impending pullback.

4. Real-World Applications and Perspectives

• Defense Tech: The discussion highlights the shift toward autonomous warfare, specifically mentioning the "autonomous wingman" drone programs (e.g., Anduril’s FQ44 Fury).
• Environmental Impact: A significant debate occurs regarding the environmental cost of data centers (water consumption and power grid strain). The hosts acknowledge the "anti-data center" narrative but argue that compute capacity is essential for economic growth and national security.

5. Notable Quotes

• "Patience can be waiting for one particular setup on one particular stock. It can also just mean looking for the right setup on anything in a group." — Neil, on the necessity of trading flexibility.
• "If you don't do it, somebody else will... everything you are able to make in the future is going to be reliant on how much compute capacity you have." — Joey, on the necessity of the AI infrastructure buildout.

6. Synthesis and Conclusion

The session concludes with a focus on the "AI infrastructure supercycle." While individual stocks like Netflix or Lucid face structural headwinds, the hosts remain heavily invested in the semiconductor and data center supply chain (Micron, Caterpillar, GE Vernova). The main takeaway for traders is to remain "setup-bound" rather than "symbol-bound"—if the primary trade doesn't offer a clean entry, look for the same technical setup in a related asset. The market is currently characterized by high volatility in small-cap gappers and a long-term grind in the major tech names.