Who controls the market?

It’s been a wild few days in the market, to say the least. I’m sure many of you have heard the commotion initially surrounding GameStop (GME) and AMC following shortly after.

The market was down yesterday and some people might wonder if we could start seeing a downward trend. If  so, how do we trade in these conditions?

My answer is I still remain mostly bullish…

Though yesterday was a down day, there are a lot of things to consider beyond GME and AMC. One of these things is earnings season. 

Earnings Season:

The market rallied hard into big tech earnings, but it’s also usually one of the most volatile weeks of the quarter. Some of these big tech names are also under-performing. So I don’t see any reason to panic, it’s just the market pulling back after being over-hyped.

My general approach right now is to look for short squeezes and look for additional companies that are reporting later on in February that I can trade a rally higher into the report.

Some of these names include:

  • PTON
  • SNAP
  • PINS
  • SQ

Nothing here has suggested to me that there will be any lasting effects on the overall market.

As far as GME and AMC are concerned, when the shorts are done covering these things usually revert to the mean really quickly, and based on my analysis, I think we can see that happening with the overnight action of the market. We’re simply just experiencing a multitude of factors that are making the market correct, but not change its direction.

Just remember to respect your risk tolerance and never put into the market what you cannot afford to lose

P.S. Tune in next Thursday where I give you my best recipe for riding a short squeeze!

2 thoughts on “Who controls the market?”

  1. Hello Danielle, And I’m so glad you’re healthy 🙂 I go in Stacked Profits Mastery Room. VZO is great. I have question. When you Long Option you use 50 % SL of the price paid. But what SL do you use with Vertical or Butterfly,…? Also 50% of the price paid? Thank you. Petr

    Reply

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