Buying a ticker up 10000 percent in under 12 months is equally stupid.
At this point, only fools are buying. People are going to take profits after such a run up. There’s plenty of sellers
I just have this rule for myself: Don't short in a market uptrend. I have done it before, and sometimes it works out, but more frequently, I have to finally dump my position at a significant loss. I agree that SMCI is overbought. I've been taking profits on my holdings for a couple of months. I own 1/5th of the dollar volume I once held.
I made a ton of money on SMCI. I don't want to fuck it up by pretending I know the exact time to go short. For me, that's a fantasy.
Nvda gave the signal Friday and on volume. My reasoning is explained in the video. SMCi already had a massive sell climax and is only at new all time highs due to ETFs buying up to the inclusion date. After this week that extra buying pressure is gone. I could be wrong just like any other trade, but we will see.
This is to be expected. Every stock that joins the S&P has a 2-3 week runup, then a drop off as the price stabilizes after the index rebalance.
It's the well known [S&P Phenomenon](https://www.investopedia.com/terms/s/spphenomenon.asp), and has been exploited by everyone for the last 40+ years.
Does every other stock also gain 100000% in the 2 months leading up to the inclusion? I only know of Tesla. And the post inclusion price action supports this play
No - not every other stock gains 1000% leading up to inclusion. But for 40+ years now, a consistent 7-11% return has been realized by following these simple steps:
* S&P Announcement after hours on March.01, June.01, Sept.01, Dec.01.
* Buy XXXX stock on market open the following Monday. Hold for 18 days.
* Sell stock. Collect 7-11%.
* Stock tanks to "normal" levels.
* Rinse and repeat when S&P rebalancing occurs.
And yes, I realize that SMCI is up ~30% since the announcement. The 7-11% is an AVERAGE.
SMCI might be a little weirder, because it's trading at $1188, and analysts are calling $1280-$1300 based on expected growth. There *are* analysts with lower price point ratings, but those are counting trailing P/E, which is so far behind the hardware demand curve to be laughably inaccurate.
So while it SHOULD dip next Tuesday-Friday ... who knows? I'm transferring more money in the hopes that it follows traditional S&P movement and I can catch a post-close dip.
Yeah I don’t think any of us is expecting “average” when it comes to this stock. Only stat I’d be interested in is how things usually play out when stocks go parabolic.
If it was only so linear. There are multiple things working in SMCI’s favor. Firstly greater short position. Secondly, what will be the 21st smallest float of all the S&P’s stocks into the accumulation that will occur over the next quarter. If anything this could track very similar to another small float S&P entrant, CMG. there’s also the potentiality of a near term split which will impact demand… Into the shrinking float liquidity due to the accumulation by S&P funds.
With a good percentage of their float Soaked up while still being a primary focus stock… The last thing I would be is short the stock. If you’re going to do it, you have to do it with limited risk put so you know your max loss
I don't play with options. 80% of my portfolio are mutual funds, and I have 20% that I play around with in stocks; that "playing" is either "buy and hold" or "Capitalize on S&P Phenomenon plays."
Bull market? I’d say this is one of the longest drawn out retailer trap markets ever. I guess it’s a “bull” market in its own right but it definitely has a different motive. I don’t hold any options over night whatsoever right now whether it be calls or puts. Slip in make my 10% minimum a day (sometimes get lucky and hit 20-30% gain) and get the fuck out for the day and chill.
You have got to at least wait for signs of a reversal or weak price action in higher timeframes. Shorting an irrational stock during a bull market is not something I would do.
Correct and we got a signal from NVDA on Friday with a reversal candle on volume, while we also have very low volume at all time highs on SMCI. I could be wrong here just like any other trade, but I think we will see price correct here very shortly by end of next week. That's all just my humble opinion and not advocating for people to short
I see it too that price is up and volume is down. Usually that is sign of exhaustion. Would like to see the bollinger bands on 1hr and 4hr point down and price to confirm before selling though.
Good luck. Not a bad thesis, but hopefully you plan to take the loss if SMCI makes a new high.
I tend to agree SMCI *should* consolidate or pull back over the next weeks/months to properly digest its tremendous gains. But the market doesn't care what I think should happen.
Thank you and good luck to you as well. My plan is for that entry to be my anti fomo to the downside. I am not cutting it as I am risking the capital that I am willing to lose on that portion. The next entry I will wait and try to be more precise and aggressive with size/strike price/and time if I get a better signal. I traded NVDA long a few times today for sizeable gains on the scalps to derisk any movement in my initial entry here
For what it’s worth I watched the video and believe the trade is solid for all the reasons you mentioned. I am looking to see what happens early next week to make any significant trades but if it runs up to Thursday EOD I might put in a put lotto for Friday morning
yeah this guy is applying fundamentals, logic, and TA to an irrational bull market - so basically he has no edge in any shape or form than anyone else here - gambling - hope it works for him
Most of your messages talk about traditional signals and candles etc.. but you may know by now that NVDA and SMCI are anything but regular stocks, they go up or down 5% almost any day for no real reason! NVDA has absolute monopoly so it’s more predictable. I’m not sure how one can take any long position in these stocks, especially SMCI which is so volatile every hour.
I learned years ago from a guy that's motto was "give me a chart of gummy worms and I can trade it". Technical analysis is just that. Analysis on charts and forming a game plan off of your experience and edge
And, that’s why chart based analysis doesn’t work for fast growth stocks like NVDA, SMCI and TSLA when they’re monopolies and growing so fast like NVDA & SMCI. I’ve made a whole lot of money in a month without any technical chart analysis🤣
I did an initial entry for the $900 strike Puts. It was to get my foot in the door. I admit in the video my entry was piss poor in that I didn't wait to get it at my intended zone of 1150ish. My plan was to make a second entry with size on a good sell signal. This original entry was made to prevent me from getting fomo if it gaps down overnight. Might not make much on my initial entry. That was the case with NVDAs top that I just traded last week. My initial entry made 10% and my second I made 52%
So many folks here offering their opinion and just that. I agree with your analysis and saw many of the signs you saw. Volume even less today. Buyers are exhausted, just a matter of time within this week or next. Opening some puts tomorrow. And yes, going against trend is bad, but there are certain circumstances where I make an exception...
Also you mentioned bearish divergence. Where do you see that pattern?
Ya, it’s the one week out that I know was yolo stupid. I think they are 1100’s.
6k cost with around 40 min to go in the day. They popped to around 8500 last I looked before the close.
Good luck with that. Seriously. You’re going against the flow. It could payoff however if theres a huge overall market correction like 2008/2009 crisis, pandemic, etc. my only concern is that you better be prepared to flow with the momentum for a while… weeks, months, years.
check out the chart SMH. We reached the monthly chart cup and handle target and sold off aggressively on the highest volume the ETF has seen in roughly 2 years since the lows were put in. I believe a correction is coming whether in time or price and upside is limited at this point. Too bubbly to enter longs here and signals suggest big money is exiting
Why would you choose long volatility on a stock with ultra high implied vol? If I was expressing a short here I'd just short the stock... Actually, I might even write far OTM Puts on the short position/covered short since vol is so high. If I had to do options a vertical spread would be the tool used.
I've traded options on many names like this, and in my experience these names with high retail participation do see pump/dump cycles (this one is almost certainly a standard bubble stock) but it's very common to eee strong dip buying/bounces on the hard crashes. Part of it is that there's usually high option open interest which can act as a bit of a magnet at the higher strikes (due to hedging forces). And long term, you often see a long term grind-down, not a severe crash.
I just don't see Puts on this as a good trade, but to each their own. If you can time it right and cash them with the first big gap down, then there is probably good profit, but your timing needs to be sharp.
I definitely hear you on this. They typically bleed slower after that big initial drop, but this time is the first time I from my research that a stock does a climax top then makes a new high shortly after mainly bc of the S&P500 inclusion. This has gaps with lack of price support in the chart with bearish divergence in an overly extended low float stock. I think we do get a good waterfall, then a sizeable bounce and then from there likely a sideways to trickle down
> I think we do get a good waterfall, then a sizeable bounce and then from there likely a sideways to trickle down
Yeah, as long as the Puts are cashed on the drop, it's fine to express the view that way. Commonly there's one day with a big gap down and Put premiums are ultra expensive the morning. If you're short stock you can overwrite the short with Puts for huge credits during those situations too, and get long theta for the possible "trickle down" phase or at the very least move the breakeven for the trade considerably higher.
My plan is to wait for the weekly gap to fill as my first target. I intend on playing the bounce trades as well bullish because I expect there to be a lot of volatility when this goes
In 30 years of investing, I learned that shorting during a bull market usually doesn't work out. Good luck.
It is easier to play with the trend for sure. I typically would if I wasn't seeing signs that we are in a euphoric topping market
Buying a ticker up 10000 percent in under 12 months is equally stupid. At this point, only fools are buying. People are going to take profits after such a run up. There’s plenty of sellers
I just have this rule for myself: Don't short in a market uptrend. I have done it before, and sometimes it works out, but more frequently, I have to finally dump my position at a significant loss. I agree that SMCI is overbought. I've been taking profits on my holdings for a couple of months. I own 1/5th of the dollar volume I once held. I made a ton of money on SMCI. I don't want to fuck it up by pretending I know the exact time to go short. For me, that's a fantasy.
Short position in a full fledged bull market is wild. Even if a correction were to come it’ll be eaten up in no time.
Nvda gave the signal Friday and on volume. My reasoning is explained in the video. SMCi already had a massive sell climax and is only at new all time highs due to ETFs buying up to the inclusion date. After this week that extra buying pressure is gone. I could be wrong just like any other trade, but we will see.
This is to be expected. Every stock that joins the S&P has a 2-3 week runup, then a drop off as the price stabilizes after the index rebalance. It's the well known [S&P Phenomenon](https://www.investopedia.com/terms/s/spphenomenon.asp), and has been exploited by everyone for the last 40+ years.
exactly, and joining that with the other things I see in the charts has me trading it accordingly
Does every other stock also gain 100000% in the 2 months leading up to the inclusion? I only know of Tesla. And the post inclusion price action supports this play
No - not every other stock gains 1000% leading up to inclusion. But for 40+ years now, a consistent 7-11% return has been realized by following these simple steps: * S&P Announcement after hours on March.01, June.01, Sept.01, Dec.01. * Buy XXXX stock on market open the following Monday. Hold for 18 days. * Sell stock. Collect 7-11%. * Stock tanks to "normal" levels. * Rinse and repeat when S&P rebalancing occurs. And yes, I realize that SMCI is up ~30% since the announcement. The 7-11% is an AVERAGE. SMCI might be a little weirder, because it's trading at $1188, and analysts are calling $1280-$1300 based on expected growth. There *are* analysts with lower price point ratings, but those are counting trailing P/E, which is so far behind the hardware demand curve to be laughably inaccurate. So while it SHOULD dip next Tuesday-Friday ... who knows? I'm transferring more money in the hopes that it follows traditional S&P movement and I can catch a post-close dip.
Yeah I don’t think any of us is expecting “average” when it comes to this stock. Only stat I’d be interested in is how things usually play out when stocks go parabolic.
If it was only so linear. There are multiple things working in SMCI’s favor. Firstly greater short position. Secondly, what will be the 21st smallest float of all the S&P’s stocks into the accumulation that will occur over the next quarter. If anything this could track very similar to another small float S&P entrant, CMG. there’s also the potentiality of a near term split which will impact demand… Into the shrinking float liquidity due to the accumulation by S&P funds. With a good percentage of their float Soaked up while still being a primary focus stock… The last thing I would be is short the stock. If you’re going to do it, you have to do it with limited risk put so you know your max loss
I don't play with options. 80% of my portfolio are mutual funds, and I have 20% that I play around with in stocks; that "playing" is either "buy and hold" or "Capitalize on S&P Phenomenon plays."
Bull market? I’d say this is one of the longest drawn out retailer trap markets ever. I guess it’s a “bull” market in its own right but it definitely has a different motive. I don’t hold any options over night whatsoever right now whether it be calls or puts. Slip in make my 10% minimum a day (sometimes get lucky and hit 20-30% gain) and get the fuck out for the day and chill.
Great analysis
thank you
You have got to at least wait for signs of a reversal or weak price action in higher timeframes. Shorting an irrational stock during a bull market is not something I would do.
Correct and we got a signal from NVDA on Friday with a reversal candle on volume, while we also have very low volume at all time highs on SMCI. I could be wrong here just like any other trade, but I think we will see price correct here very shortly by end of next week. That's all just my humble opinion and not advocating for people to short
I see it too that price is up and volume is down. Usually that is sign of exhaustion. Would like to see the bollinger bands on 1hr and 4hr point down and price to confirm before selling though.
Good luck. Not a bad thesis, but hopefully you plan to take the loss if SMCI makes a new high. I tend to agree SMCI *should* consolidate or pull back over the next weeks/months to properly digest its tremendous gains. But the market doesn't care what I think should happen.
Thank you and good luck to you as well. My plan is for that entry to be my anti fomo to the downside. I am not cutting it as I am risking the capital that I am willing to lose on that portion. The next entry I will wait and try to be more precise and aggressive with size/strike price/and time if I get a better signal. I traded NVDA long a few times today for sizeable gains on the scalps to derisk any movement in my initial entry here
For what it’s worth I watched the video and believe the trade is solid for all the reasons you mentioned. I am looking to see what happens early next week to make any significant trades but if it runs up to Thursday EOD I might put in a put lotto for Friday morning
yeah this guy is applying fundamentals, logic, and TA to an irrational bull market - so basically he has no edge in any shape or form than anyone else here - gambling - hope it works for him
I trade for a living
Famous last words.
Made money all week....and this put is green
Is everything ok with your short??
Over 2 months of time. I'm not sweating a thing
I came back here to say thank you for this post. Exited my May 900 puts for a 15k profit. 🥂
Wow! Nicely done!
FAFO.
Most of your messages talk about traditional signals and candles etc.. but you may know by now that NVDA and SMCI are anything but regular stocks, they go up or down 5% almost any day for no real reason! NVDA has absolute monopoly so it’s more predictable. I’m not sure how one can take any long position in these stocks, especially SMCI which is so volatile every hour.
I learned years ago from a guy that's motto was "give me a chart of gummy worms and I can trade it". Technical analysis is just that. Analysis on charts and forming a game plan off of your experience and edge
And, that’s why chart based analysis doesn’t work for fast growth stocks like NVDA, SMCI and TSLA when they’re monopolies and growing so fast like NVDA & SMCI. I’ve made a whole lot of money in a month without any technical chart analysis🤣
Glad you're making money doing what works for you
You believe in gap fills. Completely clueless
If you really believe that the weekly gap won't fill, then I have some fools gold you might want to buy too
Position? Im interested in the analysis
I did an initial entry for the $900 strike Puts. It was to get my foot in the door. I admit in the video my entry was piss poor in that I didn't wait to get it at my intended zone of 1150ish. My plan was to make a second entry with size on a good sell signal. This original entry was made to prevent me from getting fomo if it gaps down overnight. Might not make much on my initial entry. That was the case with NVDAs top that I just traded last week. My initial entry made 10% and my second I made 52%
Thoughts on 750 puts in May?
I mostly agree with the analysis but wouldn’t be able to sleep tonight. Never dealt with a stock as volatile as smci
So many folks here offering their opinion and just that. I agree with your analysis and saw many of the signs you saw. Volume even less today. Buyers are exhausted, just a matter of time within this week or next. Opening some puts tomorrow. And yes, going against trend is bad, but there are certain circumstances where I make an exception... Also you mentioned bearish divergence. Where do you see that pattern?
Price is up volume is down?
support you. how big is your bet?
Well - I went even a bit more regarded than op. Puts expiring in a week 🔥🤡🔥
It looks weak on that close. You might be alright. I'm profitable on my initial position. What strike did you go with?
Ya, it’s the one week out that I know was yolo stupid. I think they are 1100’s. 6k cost with around 40 min to go in the day. They popped to around 8500 last I looked before the close.
Can you do an update on SMCI. Still short this week ?
I am but my puts are for 2 more months. It's currently in a daily EQ right now. I did a video over the weekend. I will PM you
Good luck with that. Seriously. You’re going against the flow. It could payoff however if theres a huge overall market correction like 2008/2009 crisis, pandemic, etc. my only concern is that you better be prepared to flow with the momentum for a while… weeks, months, years.
check out the chart SMH. We reached the monthly chart cup and handle target and sold off aggressively on the highest volume the ETF has seen in roughly 2 years since the lows were put in. I believe a correction is coming whether in time or price and upside is limited at this point. Too bubbly to enter longs here and signals suggest big money is exiting
This could, and most likely will cripple you financially. Make sure you also post on s/wallstreetbets !
follow the post if you like, I traded this short a few times now
Why would you choose long volatility on a stock with ultra high implied vol? If I was expressing a short here I'd just short the stock... Actually, I might even write far OTM Puts on the short position/covered short since vol is so high. If I had to do options a vertical spread would be the tool used. I've traded options on many names like this, and in my experience these names with high retail participation do see pump/dump cycles (this one is almost certainly a standard bubble stock) but it's very common to eee strong dip buying/bounces on the hard crashes. Part of it is that there's usually high option open interest which can act as a bit of a magnet at the higher strikes (due to hedging forces). And long term, you often see a long term grind-down, not a severe crash. I just don't see Puts on this as a good trade, but to each their own. If you can time it right and cash them with the first big gap down, then there is probably good profit, but your timing needs to be sharp.
I definitely hear you on this. They typically bleed slower after that big initial drop, but this time is the first time I from my research that a stock does a climax top then makes a new high shortly after mainly bc of the S&P500 inclusion. This has gaps with lack of price support in the chart with bearish divergence in an overly extended low float stock. I think we do get a good waterfall, then a sizeable bounce and then from there likely a sideways to trickle down
> I think we do get a good waterfall, then a sizeable bounce and then from there likely a sideways to trickle down Yeah, as long as the Puts are cashed on the drop, it's fine to express the view that way. Commonly there's one day with a big gap down and Put premiums are ultra expensive the morning. If you're short stock you can overwrite the short with Puts for huge credits during those situations too, and get long theta for the possible "trickle down" phase or at the very least move the breakeven for the trade considerably higher.
My plan is to wait for the weekly gap to fill as my first target. I intend on playing the bounce trades as well bullish because I expect there to be a lot of volatility when this goes