Chapters
00:00 Intro: All Three Are Back
01:35 Nick: Trail Stops While Skiing
02:37 Ben: SMCI & Nvidia's Five-Week Runs
03:40 GP: The Three-Gap Rule
06:17 Nick: Sell Into Strength
08:55 Ben: Selling Is the Hardest Part
13:01 GP & Nick: Trailing Stops
17:05 Ben: Trim at 700?
19:40 GP: Rotate Nvidia Into SMCI
23:50 Where to Get Back Into Nvidia
28:29 GP: Tesla's Prove-It Moment
30:05 Nick: Tesla's January 25 Bar
34:12 Uber, Spotify, DraftKings & Disney
36:52 GP: Disney, Roku & Netflix
38:55 GP: Pfizer at the COVID Lows
42:29 Nick: MongoDB, KLA & Lam
44:04 GP: Boredom, Not Frustration
45:35 Nick: Don't Get Cute
47:08 GP: PayPal's Tightening Range
48:38 GP: Coinbase Levels
51:41 Nick: Bitcoin's Four Weeks Tight
53:46 Nick: What Is a Three-Week Tight?
56:51 Small Caps' Raging Debate
1:03:01 GP: Buy Gold on the Breakout
1:04:04 Wrap-Up
Market Hours #102 went out live on Monday evening, February 5, with Ben, GP and Nick all back together after Nick's ski week in Colorado. The hosts started with SMCI's 128% and Nvidia's 44% five-week runs. GP warned that a third straight gap could mark "close to the end if not the end of the move," and the group discussed how to take profits on huge gains. They also covered Tesla's prove-it moment, Netflix's subscriber surge, Pfizer at its COVID lows, boredom in a two-stock market, Coinbase, Bitcoin's four weeks tight and the small-cap debate.
Nick's setups, levels and trades
Nick didn't sell or reduce anything before his trip. He had his trail stops set, nothing triggered, and Google barely missed his stop: "I definitely would have gotten chopped out of some positions if I would have been sitting at my desk." On SMCI and Nvidia, "I think selling in strength is the prudent thing to do. If you're not going to sell any then have some hardcore sell rules." He uses trail stops because he started as a day trader and would sell too early. A mentor raised his stop under the low of the sixth prior weekly bar after each new high. Nick likes moving averages because they show behavioral change. If price moves your way by the same distance as your ATR-based stop, selling half leaves "a risk-free trade."
On Nvidia, if it grinds or moves sideways, he'd wait for a range to form, and "by the time you get an opportunity at 500 the 200 day moving average is already going to be through 500." On Tesla, he's watching the big-volume January 25 gap-down bar. "There is a chance that it put in its low today." He doesn't have much interest in trading it, though "Tesla just being Tesla like I think it could run to 300." It closed above 180.6, the low of that bar, and near term he thinks it goes back after 192–193, where it will battle the 10-day EMA and the declining 20-day. Unless you bought 180 with a stop under today's low, "don't bother just wait."
He likes MongoDB and is watching KLA and Lam Research curl up. He also wants Google to get bought into the gap: "I love that bar off the 50 day." IDEXX "ripped off the 50-day and put in a pivot high." Otherwise, "I'm in a wait and see." He keeps telling himself, "don't try to get cute just hold," because "boredom is not a reason to sell and boredom is not a reason to short the market either." Bitcoin is four weeks tight, not counting the current week. He explained that a three-week tight is three straight weekly closes within about 1–2% of each other. He treats it as "a price to trade against," "an opportunity to add into an existing position," and the B and C points for measuring the next leg.
Ben's setups, levels and trades
Ben asked how long SMCI's 128% and Nvidia's 44% five-week moves can last. A viewer said Nvidia is her largest position with a cost basis under 90, and he said, "I'd be selling calls forever on that." "I will stand firm in my conviction that selling is the hardest part." It's easier when he's selling calls and willing to be called away. For someone holding Nvidia from 110 in October 2022, he wouldn't close out, but seeing 700 on the screen while still holding from 110 would make him trim something. "I would rather be selling 700 than 665."
GP's setups, levels and trades
GP said SMCI's revenue guidance update showed "how cheap it was" and could be the final blowout, so he'd let it play out and then look for chances to get long. Nvidia is the one he's watching for a pullback or exhaustion move. He talked in June 2022 about a three-gap rule, and a gap up tomorrow would be day three: "after this long of an extended move is usually... close to the end if not the end of the move." That doesn't mean "it's going back to 100." Puts are so expensive that shorting it through options is "gambling ultimately." For profits, "set a trailing stop and let the market take you out. Don't take yourself out." Selling a quarter of a long-held position to help buy a house is "never a bad idea."
He wouldn't sell calls against Nvidia because implied volatility is surprisingly low for a year out. He would "sell some Nvidia and buy some SMCI" on a pullback. At a 37 billion market cap and about two times sales, with guidance raised to roughly 14–15 billion for 2024, SMCI "still seems really cheap to me." For a hypothetical trim at 700, he'd rebuy on the retest of the breakout at 500. The move could end at 900, with a retest of the consolidation around 600. At 1.7 trillion, he'd be "very cautious of the move" with earnings a couple of weeks out. Tesla is in a "prove me scenario," in a downtrend since 2021 with lower highs, and "there's no reason to be chasing this at this point until it shows you should be in it."
He expects a Disney breakout, and the reinstated dividend brings in a new investor base. Roku is on the verge of profitability. Netflix beat subscriber guidance of 8 million with 13.1 million, and its ad tier grew from 15 million to 23 million, yet "it's still trading well under its all-time highs" and doesn't want to get past 562. He's already in Pfizer: the risk is defined at 26.43, the COVID lows, against $3–4 of mean-reversion upside and a 6% dividend that gets more attractive as rates come down. "I think it's a hold for a while here." The market is "more boredom than frustration" because of the monetary regime shift, as Shopify keeps getting rejected at its weekly 200 SMA near 83. Meta's buyback and dividend punished anyone who got cute, and PayPal's ranges keep tightening, so "there's probably a coil move here somewhere."
Coinbase has good risk-reward at the 116.30 pivot; if that breaks, "I'd imagine we're going back to 100." The weekly 20 and the monthly nine sit near 105. On small caps, his message from FOMC was "we're going to cut rates, just be patient," so IWM should hold as a forward-looking market. It could range between 205 and 180, but "it looks really constructive to me." A close below the big monster candle at 185 is where he'd get really concerned. On gold, "buy over 200," because "gold has not taken out all-time highs yet. When it does the trade will be easier." For how long things can go sideways, "just look at IBM, a solid 24 years."
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