TRUMP PREPARES FOR BIG ATTACK OVER THE WEEKEND...
In a Nutshell
Markets opened with heavy selling led by semiconductors but recovered, while Trump’s planned escalation with Israel against Iran drove oil prices to $88. Retail traders using leverage suffered mass liquidations, underscoring the need for small, unlevered positions to learn market behavior. Traders must decide before the weekend whether to hold positions or stay in cash amid rising geopolitical risk.
These notes were generated by AI and may contain inaccuracies.
Happy Friday. Markets experienced a roller coaster session with an initial wipeout of over 800 billion dollars from the US market as soon as trading opened. The semiconductor and memory chip sectors led the selling pressure, fueled by uncertainty from Asian markets. The market quickly recovered later in the session.
1.2 million retail traders in South Korea received margin calls this week, representing approximately 3.4% of the country's entire adult population. This statistic highlights the dangers of using leverage as a beginner. Many new traders go all-in with borrowed funds without first testing the market, leading to liquidation when prices move against them. This ruins their perspective on investing, often causing them to label the market as rigged after suffering losses.
Instead of using leverage, beginners should start by purchasing just one share of a stock to test the market. If the position drops 30-40-50%, the loss is minimal and the lesson is valuable. If the stock recovers, such as a 37% gain from previous lows, the experience builds confidence without catastrophic risk. This approach allows traders to understand market volatility firsthand. A single share position can demonstrate what a 5-10% daily drop would feel like at larger sizes like 10,000, 20,000, or 50,000 dollars.
Buying one share exposes beginners to market movements and helps them determine their personal risk tolerance. The goal is not to become a millionaire from a single trade but to gain experience and exposure. Once comfortable with one share, traders can scale up to 10 shares or more in future opportunities while keeping position sizes tasteful and manageable. Over-leveraging during uncertain periods where corrections of 25-35% can occur rapidly leads to liquidation.
Trump is offering paid access to his Truth Social feed at up to 100,000 dollars per month for quicker access. This follows a previous announcement where Trump proposed providing API access to Wall Street traders and firms for faster access to his posts. This is viewed as an abuse of power, a conflict of interest, and an attempt to enrich himself while holding elected office.
The Trump administration notified Israel that it is sending dozens more refueling planes ahead of a potential massive offensive against Iran. Options being considered include bombing Iranian infrastructure facilities such as power plants and nuclear sites. President Trump can order escalation in the coming days. This does not appear to be a de-escalation. Brent crude oil prices surged to 88 dollars per barrel as a result, making oil stocks and ETFs the big winners while broader markets declined.
Semiconductor stocks that had become overbought since hitting highs entered a descending pattern on the 30-minute timeframe with bearish market sentiment. A dead cat bounce occurred, bouncing from 804 and rallying nearly 100 points to 904. A long position was taken originally, with profits taken as the price approached previous highs. The position was later pulled back to the moving average. The market remains incredibly bullish despite the pullback, though structure is breaking and the direction is uncertain.
With one hour remaining in power hour, traders must decide whether to stay in cash or carry positions over the weekend given ongoing escalation risks in the Middle East. Semiconductor stocks are already down 25-30% but could fall further. The question is whether current levels are oversold enough that the upside potential outweighs the downside risk. There is no universally correct approach. Each trader must assess their own risk tolerance and conviction level.
If believing markets will recover, traders should form their plan of action before recovery begins rather than during it. Options include staying in cash until confirmation, buying small amounts, or going all in. The plan must be formed now. The action can happen later, but the decision framework needs to be established in advance. Updates on Asian market movements and Middle East tensions will continue to be provided.
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