Chapters
00:00 Intro
00:55 Knicks in the Finals & 1999 Parallels
02:32 $MU's Monster Run & the 200-SMA Rule
05:40 Memory Splits & Not Bullish Enough
09:18 Not Bearish Enough: Momentum vs. Everything Else
12:09 1999: Exxon, $MSFT & the QQQs Doubling
17:31 Rerating on Earnings & the 261 Extension
18:33 Software Basing & Revenge Shorts
20:44 Asymmetric Risk: GP's $MU, $ARM & $DELL Calls
26:36 Poker Math & Taking All 10 Trades
32:20 Breakouts as Confirmation & $RGTI
36:06 $TSLA's Three-Week Tight & $CRCL Alerts
44:03 $AVAV: The 200-Week & Nick's If-Then Map
55:43 Selling Winners & the Instant-Regret Rule
1:00:43 Final Words: 20% Moves & Shorting $TSLA Highs
Market Hours #177 went out live on Tuesday, May 26, the day after Memorial Day, with Nick and GP. Ben was out, so Nick ran the show, and Ben was due back the next day for the StockTwits Community Rip. GP opened by celebrating the Knicks' first Finals trip in 27 years and drew the 1999 parallels, while arguing this market is no bubble. From there they covered why stocks under the 200-day keep getting smoked, how far momentum can run, GP's asymmetric options trades in Micron, ARM and Dell, poker math for traders, Nick's if-then map for AeroVironment, and how to sell winners.
Nick's setups, levels and trades
Nick said that with moves this fast, getting trapped in a stage-one base or a range-bound name is doing yourself "a massive disservice." He'll sit through chop in the QQQs, but he doesn't have that conviction in an individual name. He wondered whether the memory and chip names start splitting, the way most of the mags did around 2021, and whether that would mark a more substantial pullback. He'd emailed Cookie that morning to say thanks for their golden-ratio show. It changed how he looks at the QQQs on the weekly and at the phrase "not bullish enough," which he says comes from the dominant trend. Using a top-down approach, if the largest time frame he follows is trending up, staying aligned with it keeps you on the right side. You could have played the short side when the QQQs broke the 200-day, but pressing shorts there got your face ripped a week later. He leans on if-thens over absolutes. If something doesn't happen that you expected, that's feedback, and you can reverse or exit.
Looking at software, he said it had reclaimed the range from below and was pushing into a declining 200-day. If you're short the market, he asked, why short Micron, AMD and Intel instead of names like these? On Micron's Friday candle, he said it was an inside day on a Friday into a three-day weekend on minimal volume, so he wouldn't have been thinking rollover. He credited Dio, MVG and Cubby Bears for getting him out of all-in, all-out thinking. If you're comfortable chasing, treat a breakout as confirmation, not an entry. If you missed it, "buy the backtest, buy a backfill, buy a week open." The market gives you plenty of chances at the right price. On Circle, if you got stopped out when it lost the 20-day, set alerts at 120 and 100 instead of discarding it. It still had a three-week tight, and the drop could be a "shake and bake" to clear out the three-week-tight crowd. Set the alerts, ignore it and let the trade come to you. He thinks a portfolio-manager approach helps concentrated traders: when a name is resting while others rip, piece out of it into what's working, which still keeps risk in check and leaves room to rebuild. The hardest part of a concentrated portfolio, he said, is sitting in a resting name while everything else rips. Scanning is the easy part of the game, and selling winners is the hardest.
He walked through AeroVironment in detail. The two high-volume candles stand out: one breakout and one breakdown, plus a big double top. A true double-top measured move would be a 200-point decline, which he called unrealistic unless you think it's going to zero. Instead it was putting in a higher low off the 50-week, with a descending wedge that could break out on the weekly close. Descending wedge breakouts often turn into double bottoms or break out and flag before continuing. The next pivot to reclaim was the low of the high-volume candle. If that's retaken, he immediately shifts to the camp that it goes after the 301 high and eventually takes out the recent highs on the weekly. Without a catalyst like earnings, he expects it to build a big cup and handle instead of ripping straight up. If it does, a 400-to-150 range is a 250-point measured move that could eventually push toward 650. He admitted he was getting ahead of himself, but said that's how if-then thinking works.
GP's setups, levels and trades
GP said the market is breaking out while everyone tries to short what he thinks will be revised as fundamental earnings growth. The Knicks last made the Finals in 1999, when the bubble went parabolic. "We are not in a bubble," he said, because in 1988 and 1999 stocks re-rated on expectations, and now they're re-rating on earnings that have already happened. Corrections will come, but the 261 extension on the QQQs is $892.48, roughly 20% away. On Micron, he said the shorts are "playing with their food" and can't go in for the kill. Money is flowing out of names under the 200 SMA, not even the mags as a group. Half the Dow names were under it, including Home Depot, Microsoft, Meta and, he believed, American Express. He used Disney as the example: "Find something under the 200-day, wait for it to test it, and then short it." Momentum is staying with momentum, and everything else is getting "the shank."
He said you may be bullish enough, but you're not bearish enough on what isn't working. Even Nvidia, in the sector that's going bananas, was flailing while momentum names broke out, consolidated a week or two and broke out again: ARM and Dell the week before, Micron that week, and the space names Rocket Lab and ASTS. Tesla randomly drops 1% in three minutes on flows, with narratives about people selling it for the SpaceX IPO. He pulled up 1999: Exxon Mobil, the largest company before the boom, went nowhere while the QQQs doubled in five months from October 1999 to March 2000, and Microsoft was the leader that kept going. Microsoft and Meta have underperformed for nearly a year, so if you're in the 1999 camp, you have to ask whether they're weak for a reason. He isn't in that camp, though. He thinks this is one of the first true earnings expansions in a long time. Software had done well but lacked momentum, and it was basing after the April bottom, just as they said it would. He called shorting Micron, AMD and Intel revenge trading by people who missed the move.
His main lesson was asymmetric pricing. Micron was around $880, and that Friday's 800 puts, a 10% drop by week's end, were priced so high that even a 10% drop might only double them. "When your contrarian theories work hand over fist is when the market doesn't see it." On Friday everyone saw an inverted hammer, so he bought Micron 900 calls at $3. They fell to $2.40 by Friday's close, and on Tuesday he sold a third of them around $34. Friday's candle sat above the 50% retrace of the consolidation, the high-volume May 12 red candle had a huge wick where buyers stepped in, and the selloff accelerated only near Friday's expiry. Puts 100 points out of the money cost about $7, while calls 100 points out cost $2–4. That was his third trade of this kind: the week before, he bought ARM 260 calls at $2.50 and sold them at 12–14. He rolled some of that profit into Dell calls at $1 and sold those at 22–34, then the Micron calls, which he'd sold at 21–34 so far while still holding more. The key is equal size each time. Put in $4,000 once and $40,000 the next and the math breaks. His poker analogy: tournament players need to win only about 2–3% of tournaments to break even for life, like Chris Moneymaker winning $10 million in 2003. Cards are probabilities, so if he gives you 10 trades, "take all 10," and if money's tight, split it.
He pointed out RGTI tagging his 23.71 level and bouncing to about 25, a 10% move in an hour and a half. The fundamental problem for most traders, he said, is paralysis from too much analysis instead of staying agnostic to price. He admitted January through March was miserable for him with premiums so high: "I kill what I eat," and he was in starvation mode. He never thought silver could have a 39% down day. He posted a Tesla chart with a three-week tight above 414.50, the 2021 all-time high, and a perfect wick off the rising 50-week, which would be a breakout in any other stock, "but it's Tesla." Circle was a three-week tight that failed, and crypto has been garbage for a long time. On Circle, he said the mistake is judging a weekly pattern on a daily basis. Cut it at 107, and if it closes at 114 on Friday for four weeks tight, you buy back emotional after an eight-point loss. Sometimes waiting for the Friday close means a bigger loss than he wants, but it cuts both ways. Tesla, Microsoft and Meta, which he holds, don't outperform when the market's red, and Meta had looked ready to go higher for weeks without doing anything.
His fresh name was AeroVironment. The last time it tagged the 200-week, it put in a volatility doji and ran from about 90–100 to 400 in a short time. He's using the 2x ETF to explore it and avoid wash-sale issues, and he'll build an equity position if it confirms. The level to reclaim is the expansion candle's low at 187.88, so roughly 188–190. Over 237, "it's go time." A rejection could revisit the weekly 200 SMA, and he'd start accumulating again near 146, the closing price of the last reversal off the 200-week. He called it a "results versus action" chart: buyers showed up on volume with two green weekly candles but couldn't stop it from going lower. Single-stock 2x and 1.5x ETFs let you test a thesis. AVXX was about $9.60, so you could hold a roughly 60-cent stop and convert to shares if it confirms. He added that bases at the 200-week take time, unlike a test of the 50-week, and pointed to ASTS, which double-hammered off its rising 50-week. Buyers at 68–75 two weeks earlier were up 60–70%. "Don't tell me there's not opportunities in this market."
On selling, his rule is "if I sell and I instantly regret it, it's a great sell." He trimmed AMD when it started failing the October gap below 203, because he wasn't going to ride another 80% drawdown. It's at 500 now, and he still holds a smaller position. On January 28, he closed a gold futures trade (five contracts, $100 a point) that ran another 120 points within minutes, about $60,000 missed. The next day was silver's most historic down day, about 38%. He was even pricing a house next to his brother in San Francisco at the end of January, which was a top signal. His closing thought: in this bull market, he thinks he can find one or two 20% moves a week with 2–5% risk when a trade fails, and five 20% trades double an account. He joked that shorting Tesla's high between 9:33 and 9:37 has paid about 10 points a day, and said trading is work, not Lambos or a one-hour-a-day fantasy. "Whenever I sell, I know in my heart of hearts that I will find another winner."
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