Stock Market, Bitcoin, Oil, etc. Analysis for Week Ending April 24, 2026

Key Concepts

• VWAP (Volume Weighted Average Price): A trading benchmark used to determine the average price a security has traded at throughout a specific period, weighted by volume.
• Anchored VWAP: A VWAP calculation starting from a specific significant event (e.g., a market low, a year-to-date high, or a specific news event) to track the average cost basis of participants since that point.
• Moving Averages (5, 10, 20, 50, 200-day): Technical indicators used to smooth out price data and identify the direction of the trend.
• Higher Highs and Higher Lows: A classic technical pattern indicating an uptrend where the market consistently establishes new peaks and higher support levels.
• Scenario Mapping: The practice of preparing for multiple market outcomes (e.g., "if it breaks X, I do Y; if it holds Z, I do A") rather than predicting a single future.
• Trading Around a Position: The strategy of selling portions of a core holding during strength and re-buying them at lower support levels to lower the average cost basis.

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Market Overview and Philosophy

Brian Shannon emphasizes that traders should evaluate each market on its own merits rather than relying on theoretical correlations (e.g., the expectation that rising oil prices must hurt the S&P 500). He argues that when markets defy traditional correlations, traders should adjust their position sizing rather than fighting the trend.

• Key Insight: "We don't look at these theoretical relationships because often times the relationships are there, but when they aren't, you're going to be left wondering... why is this market wrong when in fact it's holding you back from making profits."
• Volume: Shannon dismisses concerns about "light volume" rallies, noting that the most critical metric is the VWAP from the market low, which confirms that buyers remain in control.

Risk Management Framework

Shannon outlines a disciplined approach to managing trades in extended markets:

1. The 5-Day Moving Average Rule: Crossing below the 5-day moving average is not an automatic "sell everything" signal; it is a signal to become cautious.
2. Staged Exits: Sell the first third of a position upon a lower low below the 5-day moving average. Keep the remaining portions protected by stops placed below the 10-day and 20-day moving averages.
3. Avoid Shorting Strength: He warns that shorting a market simply because it is "up too much" is a dangerous strategy that often leads to losses.
4. Innocent Until Proven Guilty: Maintain a bullish bias as long as the pattern of higher highs and higher lows remains intact.

Sector Analysis

• Semiconductors: Identified as the "absolute bull market leaders." Shannon notes that even in extended markets, shorter time frames (like the 65-minute chart) provide low-risk, high-probability entries by waiting for pullbacks to the VWAP.
• Biotech: Currently in a pullback phase. Shannon advises against buying while the 5-day moving average is declining. The strategy is to wait for the price to consolidate, allow the 5-day moving average to flatten, and then enter once momentum shifts back to the upside.
• Financials: These stocks hit resistance at the 200-day moving average. Shannon suggests waiting for a "higher low" to form on the daily chart before re-entering, rather than trying to catch a falling knife.
• Energy: Currently battling multiple "anchors" (month-to-date and year-to-date). He advises observing how the price interacts with these levels before committing capital.

Specific Asset Observations

• Tesla (TSLA): Currently in a stabilization phase after a significant decline. Shannon views the current price action as "noise" and suggests waiting for the stock to build a higher low and regain the 5-day moving average before initiating a new bullish campaign.
• Bitcoin: Maintains a steady uptrend. Shannon holds a 50% position, noting that he is not at 100% because the 200-day moving average is still declining, serving as a long-term technical headwind.

Synthesis and Conclusion

The core takeaway is that successful trading is not about predicting the future, but about managing risk through scenario mapping. Shannon stresses that traders should let the market prove its direction rather than forcing a thesis. By using tools like Anchored VWAP and moving averages, traders can identify "levels of interest" where the risk-to-reward ratio is favorable. The ultimate goal is to leverage time, minimize drawdowns, and participate in trends only when the evidence (higher highs/higher lows) supports the move.