Warning: You Might Want To Sell Soon...
In a Nutshell
Markets are being artificially propped up by Trump's unverified claims, making long positions risky at elevated levels with poor risk-to-reward. MU and MSTR shorts were opened on overbought conditions, with LPP traders targeting reversals as these stocks remain vulnerable despite oversold readings. Bitcoin at $58k and MSTR's sharp decline signal deeper downside ahead if broader markets weaken, and leverage should be avoided on speculative assets.
These notes were generated by AI and may contain inaccuracies.
Trump announced that the US and Iran have agreed to halt strikes and meet this week in Qatar as soon as tomorrow. This claim was made to prop up the markets. Iran stated there is no intention to meet with the US tomorrow. Qatar confirmed that US envoys are at Doha but will not meet with Iranian officials. The market does not care about these developments and continues acting irrational.
Trump has been continuously doing this for the past 11 to 12 weeks. Be very careful not going long because direction and momentum are in your favor. Be very careful using leverage at these elevated levels, especially when markets are being propped up by Trump's tweets and nothing fundamentally. Be very careful being too overaggressive with long positions at these elevated levels in case they do begin to attack as Trump normally likes to do throughout the weekend.
On the QQQ daytime timeframe, markets were testing support at the EMA. They bounced right at that support and are going back up to retest previous highs. Risk-to-reward becomes less favorable because current levels are closer to resistance. Direction, momentum, and market sentiment remain favorable, but risk-to-reward is less attractive. Leverage becomes a very important part of managing this situation.
The LPP team is waiting for an overbought reversal to form. A short position was opened on MU because it was overextended with no reason propping itself up at elevated levels within a very short period of time. Overbought reversals are the favorite setup to short. Shorting is not recommended for complete beginners as it comes with greater risk. When an individual stock props itself up this quickly, it normally ends up selling off.
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