Why TSMC’s $56B Bet & ASTS’s SHIELD Deal are Today’s Top Trades 😰 | LIVE Jan 16

Key Concepts

• Market Volatility & Technical Analysis: The market is characterized by rapid shifts and requires a strong understanding of technical indicators (VWAP, trendlines, moving averages) for successful trading.
• Catalyst Driven Price Action: Price movements often precede news events, with news acting as a catalyst for existing trends. Identifying genuine catalysts is crucial.
• IPO Risk & Reward: IPOs offer potential for quick profits but carry significant risk, requiring a disciplined approach and awareness of potential downsides.
• Sector Rotation & Strength: Identifying strong and weak sectors (semiconductors vs. software) is vital for informed trading decisions.
• Imbalance Trading & Scalping: Exploiting imbalances in buy/sell volume through quick scalps can generate profits in volatile markets.

Market Overview & Initial Sell-Offs (Part 1)

The session began with a discussion of market volatility, focusing on Netflix (NFLX) experiencing a multi-week sell-off after reaching all-time highs in the 134s. Support levels were identified at 82 and potentially 70, with the sell-off attributed to a higher timeframe reversion needing a catalyst (like news events) to continue. The speaker noted Netflix was “using every and any reason to sell some more.” The failed PSKY (Paramount/Skydance) deal was analyzed, with Adira arguing PSKY’s frustration was unwarranted, as Paramount was explicitly informed their offer was insufficient, particularly regarding the valuation of the cable side of the business. She characterized David Ellison’s lobbying of the European Commission as “dicey” and “shady,” believing Netflix “will and probably should get this deal.” A rapid rundown of stocks followed, including SMCI (Super Micro Computer - up 9.5%), Tesla (TSLA), Silver (SLV - down 3.3%), Verro (Venus Concept - up over 500% due to a share repurchase program), and Sky Corp Solar (PN), analyzed based on price action and volume.

Real-Time Trading & Technical Deep Dive (Part 2)

The focus shifted to real-time market observations and trade setups. PN (Sky Corp Solar) was discussed as a momentum-driven stock with a potentially fading catalyst (a 2 million share repurchase program announced December 4th). The speaker detailed short positions in AMD (Advanced Micro Devices) at VWAP, with a plan to add if it broke a trendline, and Tesla (TSLA), cautiously adding to a short position aiming for a bid around 439.50. A significant portion of the segment clarified VWAP calculations, distinguishing between charting platform VWAP (aligned with E-Signal) and potential CME VWAP calculations. Silver (SLV) was identified as a bullish trade following a breakout, with partial profits taken. The software sector was highlighted as weak (Figma, Adobe, Workday, HubSpot, CRM), emphasizing the importance of recognizing when a stock has lost its bid. IPOs were discussed, with Figma serving as a cautionary tale and SpaceX/OpenAI viewed with anticipation, but requiring careful timing.

IPOs, Sector Trends & Recap (Part 3)

The discussion centered on upcoming IPOs (SpaceX, OpenAI, Anthropic), with SpaceX expected to be the largest ever, benefiting Morgan Stanley and Goldman Sachs. Cororeweave was contrasted with Figma, illustrating the risk/reward profile of IPOs. A strong performance from TSMC drove gains in the semiconductor equipment sector (LRCX, GEV). The energy sector was mixed, with utilities (Vistra, CG) declining while traditional energy companies (XOM, EOG, Pioneer, Phillips) also faced headwinds. Costco’s surge was attributed to a trend reversal, while Walmart’s upcoming NASDAQ 100 inclusion was expected to create volatility. Successful trades were executed in Silver and Tesla. Earnings reports were deemed more impactful than Fed policy, with Netflix and Intel’s upcoming reports highlighted. Micron gained 6.6% during the session.

Conclusion

The session underscored the importance of technical analysis, identifying catalysts, and adapting to rapidly changing market conditions. A cautious approach to IPOs, coupled with a focus on sector rotation and imbalance trading, was emphasized. The dynamic interplay between price action, news events, and volume analysis proved crucial for navigating the volatile market landscape, with a consistent emphasis on risk management and quick profit-taking. The overall takeaway is that successful trading requires a blend of technical expertise, real-time observation, and a disciplined approach to capitalizing on market opportunities.