Well, it’s safe to say chasing the bounce into Liberation Day was not the right move.
But, after the panic selling, it’s time to digest what’s next.
Liberation Day is a monumental day in American history.
Don’t get me wrong, America, and the global stock market, are going through a reset.
Reset from dependence on the U.S. government to plow into debt and fund the world’s economy.
A reset from other nations stripping America of jobs, factories, and ultimately income that had no right to leave our shores.
The short-term pain in the stock market is likely to be just that – short term.
As we navigate the volatility, let’s break down the smart traders (unusual options activity) and how they adjusted to the drop yesterday.
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There’s clearly a tilt to the bearish side, from what we have seen. Noticeably, this is all mixed up though.
A ton of bearish bets on the SPY, a bullish and bearish trade on IWM (small caps) but it’s the few big buys that have my attention.
Tesla (TSLA), Dell (DELL) and Camping World (CWH), all American focused companies seeing huge buys yesterday.
$2.6M on TSLA, $1.2M on DELL and $1.1M on CRW. Varying expirations, but each trader was willing to give it some time.
Odds are, they are not banking on today being the bottom.
They may get a better buying opportunity, but I think the story from here will be volatility.
It’s going to be impossible to capture the bottom here.
The main thing is to target specific stocks, just like these traders are with TSLA, DELL and CWH.
Smart traders are moving on from buying the broad ETFs as a buying opportunity, and then targeting the beaten down, high quality names that, for the most part, will see a smaller negative impact from tariffs.
We’ll keep an eye on, as the dust settles, for a new opportunity to jump into next week.
Have a great weekend everyone!
Trade Smart,
S.E.A.L. Alpha Team