Chapters
00:00 Intro
02:07 Does the Market Need a Flush?
06:29 Melt-Up to 780–800 on the QQQs?
09:18 Liquidity, 3–5% Dips & an Earnings Expansion
14:47 Monster Bases Breaking Out & the 1996 Chart
17:13 Trim and Trail: Staying Ahead of the Trend
22:58 GP's $ARM 2x Trade & Building $TAN
26:44 Anticipating, Not Predicting: Buy the Breakout
33:30 $IGV, $MSFT, $CRDO, $ZS & $NOW
36:57 GP: Mean Reversion & a $NOW Death Cross
44:18 Bitcoin's Capitulation, Zcash & Saylor
50:15 $CRWD, $OPEN & Biotech
53:56 $CRWV & Nick's $VST ABCD
57:01 $TSLA: Distribution or a 2019 Rhyme?
1:00:10 Zoomer Charts, UNH & Robotics
1:04:29 Final Words
Market Hours #178 went out live on Tuesday, June 2, with Ben, Nick and GP, and Ben and GP wore their playoff hats. The market had been grinding higher for weeks, so the opening argument was whether it needs a flush to bring traders and liquidity back. From there they talked about an earnings expansion, the case for buying breakouts instead of bases, the snap-back rally in software, Bitcoin's capitulation next to a bid in Zcash, and whether Tesla's chart is distribution or a rhyme with June 2019.
Nick's setups, levels and trades
Nick said a melt-up can be miserable to trade, but intraday you still get rotation into the names in favor, and both breakouts and backtests are working. The QQQs hadn't even backtested to the 20-day in this rip, though they came close on Tuesday, May 19. After the QQQs took out 723, he leaned toward a continued melt-up to about 780–800, then more volatility, an interim top and a likely retest of the 640–660 area. As a technical trader, he said his job is "to not think too much and to respect risk." He can't pick the top, so he trims and trails. Google, Amazon and Tesla were getting bought off their lows, Apple was at all-time highs, Meta wasn't following through lower, and Nvidia and Microsoft were resting. The lesson he's taking with him is to stop trying to get cute: trail-stopping is easier for him than selling at arbitrary points. On swing trades, if a position isn't working almost right away in this market, it's a waste of time, since so much else is working. Pick your time frame and use the moving average that matches it. On Rivian, he said you can be as bullish as you want, but it's in a base, and he can rotate his dollars many times over and re-enter on the breakout.
He thought HACK was outperforming the IGV that day, and both had been gifts on the week's open. On the IGV, playing it against the prior day's low was close to a no-brainer. If that low got undercut, he'd want a reclaim of 103 for an undercut-and-rally trade. He wanted Microsoft to hold its 10-day and not dip too far into Friday's breakout candle. PLTR was backtesting but still holding its channel breakout. CRDO got dinged after hours, trading as low as about 190, then opened above 200 and got bought, which is what you want to see in an uptrend. NET and ZS both got hit on earnings and bought up too, and ZS was sitting on its 50-day. On ServiceNow, he didn't see a failure at the 200-day so much as a backfill against 120. If you're not in it, the 120–140 range is where he'd want a three-week tight or volatility contraction before it rips through the 200-day. Answering GP's mean-reversion case, he said the IGV had reclaimed pivot lows inside its range, so as long as 94–98 holds, it's more than a mean-reversion trade. But a flat-to-declining 200-day will take a lot of time and energy to turn, and it acts "like a governor."
He said he's still riding CrowdStrike. On Vistra, he liked the entry when it took out 158–159, the prior day's high, and he thinks the recent spike through 140 acts as a spring. He laid out a short-term ABCD: the B point at 167 needs to be taken out, ideally on volume, for a measured move to about 185–186, with bigger implications on the larger time frame. He floated a regular show tearing apart the monthly candles after each monthly close. On Tesla, he thought the chart looked like it was drying up for a potential move higher. On bull markets, he said they forgive sloppy analysis, so press any pattern that's working "until finally it doesn't work," then move on. He's traded in and out of RR, which always seems to get cut when he cleans up positions, but he thinks it's a good look as long as it stays above $3.
Ben's setups, levels and trades
Ben asked what they were even complaining about with the market ripping. He pulled up the QQQs on the weekly and monthly. Going back to COVID, the index has rarely been this extended from its moving averages. Everyone's worried the bottom falls out, but that worry keeps building the wall higher, and he built his portfolio to ride exactly this. Where it stops, he doesn't know, and he doesn't want to be the last one off the train. He had an older 740 level marked on the chart and added another higher at 780. He said he's the exception to the buy-the-breakout rule because he keeps buying stage ones, and that trading every up and down in a stage one is how he lowers his cost basis.
On trimming, he recalled sitting with Rachel Stocks at an afterparty in New York a month earlier, talking about trimming the Bags Brothers account he runs for his kids. A month later, it was up another 100% and he hadn't trimmed. His usual approach is to trim on the way up until his risk is out, then let it run. The kids' account is up something like 1,800%, so taking his basis out would be prudent. With a 20-year runway, though, their portfolio should carry more risk than his.
On ServiceNow's weekly, he noted the 200-day was at 141 and the 200-week at 140, so a pause there was no surprise. His breakout line was around 124, and as long as that holds, he isn't concerned. He expects it to either catch a bid or chop and tighten into a VCP before a decision point. He doesn't want to see it do what Bitcoin did. On crypto, he said Ethereum, Solana and Chainlink had all been weak next to Zcash. He made a bold call without technical backing: this week is the last week of Bitcoin's bottoming process. He pointed out the alert they'd had on CrowdStrike around 460. He wished someone had told him to buy CoreWeave in the 60s and 70s, and said it still looked good above the breakout level, which he wanted to see hold. On a viewer's pick, Dominion Energy, he said the chart didn't look bad, though he didn't like the one huge-volume sell bar. He also noted that IREN, one of the names from last week's community rip, was up 8% on the week.
He told a story about a friend at dinner who said UNH is fine now. Ben's response was that most UNH buyers bought the first 25% dip because it was cheap, then the second and the third, had no cash left at the real low, and spent most of the time waiting to get back to breakeven. "That's what bull markets do. They forgive behavior." You can tell that to Boeing shareholders. In robotics, he likes Rockwell Automation. For new money, he'd think about Intuitive Surgical and Rockwell, and his list of five names to put money to work in that day included GLW, Oracle, IREN and CoreWeave.
GP's setups, levels and trades
GP said he thinks the market needs a flush. Not a monster one, but an index pullback of 3% or so, which in this market means names fall 30–40%. The grind is fine for investors, but traders provide liquidity, and without them coming in, the market lacks the liquidity to move higher. Liquidity usually comes on a dip. His SPX target was 7741, the 161 extension from a 2023 post, and about 782 on SPY. He pointed out how fast the rotation had become: Rocket Lab, ASTS and other space names pulled in 30–35% in two days after Blue Origin's rocket blew up. Breaking news, he joked: "money rotates." He didn't see an immediate top. War headlines in the Middle East had stopped moving the market, because news is shocking the first time but not the fifteenth, though oil still had a bid.
In his view, the move is fundamental, and people typecast it as the dot-com boom because they can't grasp that the market is finally getting an expansion in earnings. S&P estimates are climbing. The day before, Google said it would spend $80 billion, which is capex for Google but a boom for Nvidia, AMD, ARM, Dell, CoreWeave and whoever else gets the money. He called Jensen Huang "the greatest allocator of our time." Nvidia has invested in names like CoreWeave and IREN, is growing its dividend 25x quarter over quarter, and plans to return 50% of free cash flow. Expansionary candles get corrections, but they rarely return to where the expansion started. Nvidia is still 13–14x from its 2023 lows, and Tesla went from 12 to 414. Look at the yearly charts: Ford has been basing for nearly 30 years, FSLR 20, Micron, Intel, Akamai and Cisco 25, and IBM 24. A guest on The Compound pointed out that median tech earnings didn't peak until 1996, and the S&P rose 159% from there.
On staying ahead of the trend, he said he needs to trim Dell and ARM as they hit his levels and find the next area of exposure, like solar. He builds and trims. He's in ARM and Dell from about the low 160s and wants a core ARM position as it breaks out of a two-year base. When the core position broke out, he added the 2x ETF, buying around 11, closing half at 22 when it doubled and the rest at 30. That captured the gains he wanted while he kept his core, and the 2x ETFs also help with wash-sale rules. He didn't do the same on Dell, "even as seasoned traders, we continue to make mistakes." The cash from the 2x went into TAN, because multi-month bases in solar are where the powerful moves come from. Nick called this anticipating, not predicting. GP called it probability. Micron's first breakout failed, but the second attempt at its 25-year base needed no research or TAM story. Gold over 2100 was the same lesson, and so was Nvidia: buy the breakout and you still got 10x. "You will perform better in all markets buying the breakout than the base," he said, pointing to El Pollo Loco, which has gone nowhere for nearly 20 years, and to Tesla, where buying the all-time-high breakout near 24 would have been far less painful than holding through the base.
On software, he offered a different perspective: these could be mean-reversion trades. ServiceNow's 50- and 200-week moving averages were converging on a death cross, which often brings strength into the cross and then continuation lower, after a 30–40% move in two days that looked like short covering. Microsoft was down about $16, had already given back its gap after being rejected under the 200-day, and Nick said you could call it an island. GP cited Nick's own rule: a gap that fills that fast is weak. The IGV lacked multi-time frame alignment. It was stronger than many of its names and working on a daily golden cross, which could bring a pullback to the 200-day while the individual names get sold harder. CrowdStrike had been the beast, better than any software name except maybe PANW.
On Bitcoin, he said it fails at every bullish opportunity, but it's still holding its five-year base breakout between about 60 and 67 (thousand). Zcash is the opposite and finds buyers on every dip, so maybe Bitcoiners are converting to it. The capitulation reminded him of the IGV on April 10: who's left to sell? His answer was Saylor, who had sold some Bitcoin and bought bonds the week before. "When the CEO goes back on his word, it is not a good thing for the stock," he said, comparing it to Elon selling about $60 billion in 2022 as Tesla went from $315 to $100. On OPEN, which he'd called the Ron Popeil stock (set it and forget it), he said it now looks ready to break. It's back over the pivot, with a funky inverse head and shoulders and a slow decline on very little volume, which he reads as quiet accumulation around $4.90–5. He'd sell to the euphoric crowd at $9.50–10. His theory is that rates are coming down. He said biotech will be a big AI beneficiary and is cheap next to growth, though you have to sort through the pump-and-dumps. He liked PRME, Digital Turbine (APPS) finally breaking out but not yet confirming, and XBI flagging after its breakout with small caps leading.
On Tesla, he had posted a chart from June 3, 2019, after a 50% selloff. That low marked the start of the 2021 breakout cycle. He remembered texting Dio with Tesla at 180, then selling Apple and doubling down on Tesla. This time, Tesla had a 20-point down day on no news, right back to the 414 pivot, a level it had tagged many times before. "I do not think it's distribution." He also warned about the "aggressive zoomer charts" showing up, the mirror image of the doomer charts at the end of March. A cup and handle is a continuation pattern, so the top of the cup is the all-time high, not the middle of a stage-one base 30–40% below it. His closing names were DocuSign, Hinge, Oscar, the gold miners and OUST, plus CoreWeave, which he thinks takes out its all-time highs. As for Circle, "Circle is the trash that is crypto."
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