🚨 The Stock Market Is Falling - What You Need To Do!
In a Nutshell
Markets surged on false US-Iran peace deal reports that later proved fake, leaving prices elevated despite the misinformation. Technical oversold conditions suggest buying dips is preferable to shorting, with earnings from Meta, Tesla, and IBM tomorrow providing direction. Netflix and SpaceX both present poor risk-reward setups at current levels, while the speaker advises proper position sizing and avoiding overtrading for beginners.
These notes were generated by AI and may contain inaccuracies.
Markets experienced unusual volatility as Micron, NASDAQ, and S&P 500 all moved sharply higher. The key question is what moved the market and what quickly changed the direction. SpaceX and Netflix are scheduled to report earnings after market close today.
US and Iran reportedly agreed to a deal to end the war, which markets initially celebrated. Approximately $750-800 billion was added back to the market in just minutes due to the de-escalation news. However, these reports are now believed to be false. Oil prices initially dropped on the peace deal news but are now beginning to recover.
Markets are being manipulated based on fake news that drove oil markets lower and overall markets higher based on false pretenses that were not confirmed. Once catalysts are factored in, markets never fully sell back off, leaving them somewhat elevated. This creates bull trap situations where investors get caught in false rallies.
Markets remain technically oversold with strong support at 700. Meta, Tesla, and IBM are scheduled to report earnings tomorrow, which should provide clarity on whether markets will begin to recover. The current dip presents an attractive buying opportunity, though intraday markets are propping themselves higher before big earnings reports despite known false information.
SpaceX is currently trading at $146 per share ahead of earnings. The company has a speculative valuation and is still figuring out its path to profitability, including determining spending plans for 2027. Based on recent lows of $104, there is 28% downside potential, while from recent highs there is 19% upside. The risk-to-reward ratio is not considered worth it given the current uncertainty.
Fair value analysis shows 11.7% more downside potential. The company has a negative 224 P/E ratio, generates $23 billion in revenue but loses $8 billion annually. The key question is whether SpaceX will continue accumulating billions in losses or finally begin achieving profitability. Today's earnings report will provide more insight into this trajectory.
Netflix appears relatively cheap on a P/E basis, though it lacks a good track record with earnings reactions. The last five earnings reports all resulted in negative market reactions, regardless of whether they were misses or beats. The stock's momentum remains stagnant despite being viewed as an attractive long-term investment at current levels.
The strategy for Netflix involves investing with the understanding that it may get worse before it gets better. This requires appropriate positioning to take advantage of perceived good value without expecting immediate recovery. The focus should be on long-term positioning rather than short-term momentum plays.
The speaker is currently break-even on the day with an open short position on Micron. The original position was long on Micron, profits were taken, then the position was reversed to short. The trade went from being up approximately $1,000 to down $2,000 before returning to break-even. The speaker emphasizes not to copy this trade.
Markets remain technically oversold, making it more sensible to go long than short overall. The emphasis is on buying dips with money that can be tolerated and positioning for success rather than overtrading. Beginners are warned against overtrading and bag holding positions due to poor risk management. The principle of "less is more" applies particularly to new traders.
Risk-to-reward analysis shows 22% recovery potential based on recent highs compared to minimal 3% overbought reversal short positions. Markets are consistently more bullish than bearish, and position sizing should reflect this reality. The speaker maintains a short position for personal trading but explicitly states this does not constitute advice for others to follow.
The goal is to see viewers succeed through proper position size management, avoiding leverage, and positioning to tolerate volatility. Live trading streams are available through the LPP team with one-time payment and lifetime access, designed specifically for complete beginners. The link is available in the video description.
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