Stock Market Volatility Just Hit Different - Here's Why
In a Nutshell
Markets broke down after a failed ceasefire-driven rally, with NASDAQ breaking key support at 685-700 amid earnings volatility. Live trading netted $11.8K by scalping multiple long/short swings with strict position sizing and profit-taking. Caution dominates on speculative names and earnings week, with SpaceX down 47% from highs as reality hits overvalued positions.
These notes were generated by AI and may contain inaccuracies.
Markets propped up on news of mediators proposing a 10-day ceasefire on strikes to revive the Iran and US interim deal. Iranian president denied the reports, stating the country is at full-scale war with the United States. This uncertainty coincides with companies reporting earnings this week.
Companies reporting earnings this week include Tesla, Alphabet, ServiceNow, IBM, and Intel. The major names for the Magnificent 7 are Alphabet and Tesla, while ServiceNow, IBM, and Intel represent the key tech names. Live streaming of earnings is being considered for Wednesday and Thursday after markets close.
The NASDAQ showed an ascending uptrend pattern driven by ceasefire excitement, but this proved to be a trap. Price rallied, peaked, pulled back, and broke structure with a full breakdown pattern. The ascending uptrend support was broken, and price is now forming lower highs and lower lows.
A portion of the Micron Technologies position is being trimmed. The position was entered at oversold levels. Trading activity has been frequent and will likely be reduced.
Today's live trading session with the LPP team generated 11.6K in profits. A long position was carried over the weekend and profits were taken at market open. Multiple trades followed: short position taken and profits realized, long position taken and profits realized, short position taken and profits realized, long position taken and profits realized. Position sizing was managed carefully with direction confirmed before entry, and greed was avoided.
Some days allow for working well with the market, while other days involve battling against it. Today involved working with the market effectively. The LPP team was able to observe this approach live.
The NASDAQ is testing major support at 685. Price retested 700 but faces rejection risk, which would send it back down. Earnings reports this week add to the significance of these levels.
Key questions for upcoming earnings include whether companies are overspending, whether projections are overvalued, and how the semiconductor space will be impacted.
SpaceX is down over 47% from all-time highs, having reached highs of 230 and currently trading at lows of 122, representing a 46.95% decline. The stock hit lows of 120 during the morning session. Over $1.5 trillion in market cap was lost in the past month. During irrational times, irrational valuations are supported, but eventually reality sets in and fundamentals matter.
When considering speculative investments, understand that there are appropriate moments for such positions. Bitcoin is cited as an example of an asset that can prop itself up during irrational times but only for short periods. Eventually, it crashes 50 to 80% as crypto traders overleverage and overhype positions.
Another push up prompted selling 25 shares to lock in profits, bringing the daily total to 11.8K. The full position was then closed at 11.8K for the day.
Netflix reported earnings last week and reached new 52-week lows. The stock appears oversold but remains bearish. AMC reported its best earnings in company history and gained approximately 17%. Irene gained 15% on the day following announcement of a potential deal.
Irene shows a strong descending pattern on larger timeframes. Patterns tend to repeat themselves. At elevated levels, continuation must be monitored, and signs of resistance or pullback should prompt caution due to history of aggressive selling. When in doubt, cashing out is advised, especially on speculative names.
Earnings week brings big earnings and market volatility. This should motivate mindful exposure management, careful position sizing, and readiness to cash out when uncertain. Live trading occurs every morning. LPP is designed for those ready to stop reacting to the market and learn to stay ahead. Previous live sessions can be previewed before joining. The second link in the description provides access to one-time payment lifetime access with a discount code. The goal is to end the year on a green note.
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