📉 Tech Rotation❓ Defense Stocks Fade Trump’s $1.5T Budget | LIVE Jan 8

Key Concepts

• Market Downtrend & Volatility: The market experienced a generally downward trend throughout the session, requiring adaptable trading strategies and careful risk management.
• Technical Analysis & Trade Execution: The traders heavily relied on technical indicators (VWAP, moving averages, trendlines, imbalances) to identify trading opportunities and execute trades in real-time.
• Risk Management is Paramount: Consistent emphasis was placed on utilizing stop-loss orders, scaling out of positions, and adapting to changing market conditions to minimize losses.
• Catalyst-Driven Trading: News events (tariff decisions, mergers, earnings reports) and macroeconomic factors significantly influenced trading decisions.
• Stock Draft Preparation: A stock draft for 2026 is being planned, focusing on both long and short positions within the S&P 500.

---

Market Overview & Initial Conditions (Part 1)

The trading session began with a significant market downturn, characterized by 15 consecutive bearish candles. The traders, Obie, Neil, and Sean, were actively navigating this environment, discussing potential investment opportunities and sharing their thought processes. Initial positions included Neil being long Google (GOOG) from $322+ and short Palantir (PLTR) at $120. The discussion encompassed day trading, swing trading, and long-term investing, with a strong emphasis on adhering to pre-defined trading plans. Stocks analyzed included Caterpillar (CAT), Proctor & Gamble (PG), Applied Digital (APLD), SoFi (SOFI), Global X Autonomous & Robotics ETF (GV), RichTech Robotics (RICH), Costco (COST), Tesla (TSLA), Intel (INTC), and Open Door (OPEN). Economic and political factors, such as Trump’s proposed military spending and potential tariff rollbacks, were considered, particularly regarding their impact on Costco.

Mid-Session Analysis & Live Trades (Part 2)

As the session progressed, the overall market sentiment remained largely negative, particularly for the NASDAQ. However, Tesla (TSLA) was identified as an outlier resisting the decline, with a potential breakout at $430 or $440 being monitored. Anticipation surrounding a Supreme Court decision on tariffs, potentially benefiting GM, Caterpillar, Apple, and Proctor & Gamble, added to the market dynamics. Live trades were executed, including managing a short position in Palantir (PLTR) with dynamic stop-loss adjustments and initiating a long position in iShares Biotechnology ETF (IBIT) based on VWAP. The banking sector (JPM, WFC) demonstrated strength, while Robinhood (HOOD) and other brokerage stocks (IBKR, SOFI) faced downward pressure. SoFi (SOFI) was noted for its volatility, requiring careful monitoring. For Canadian traders, BetaPro 3x daily leverage ETFs were mentioned with a risk disclaimer.

Late-Session Reactions & Future Planning (Part 3)

The final hour of trading saw continued volatility and rapid reactions to breaking news. A previously attempted long position in Palantir (PLTR) was stopped out with a small loss, highlighting the importance of tight stop-loss orders (5 cents). A successful trade in DraftKings (DKNG) was closed with a 4% profit. A potential short trade was identified in Hallebertton (HBT) based on a sell imbalance and a broken trendline. Apple (AAPL) was suggested as a potential dip-buying opportunity around $250. Silver and Gold (SLV, GLD) were identified as promising commodity trades, with silver being particularly volatile. Breaking news regarding a potential merger between RVMD and Merck (MRK) caused a significant price surge and a trading halt. The IBIT ETF trade was actively managed with partial profit-taking. Finally, the team announced plans for a stock draft for 2026, with rules being refined to include limitations on short positions to S&P 500 names.

---

Conclusion

This trading session exemplified the dynamic and challenging nature of the financial markets. The traders demonstrated a consistent focus on technical analysis, risk management, and adaptability, responding to both broad market trends and specific news events. The emphasis on pre-defined trading plans, dynamic stop-loss orders, and a willingness to adjust positions proved crucial in navigating the volatile environment. The upcoming stock draft further highlights the team’s commitment to ongoing research and strategic investment planning. The session underscored the importance of staying informed, disciplined, and prepared to capitalize on opportunities while mitigating potential losses.