Weekly Plan 02.20.24
Good morning Traders-
Interesting stuff coming out here. The techs are all way lower.
Okay, techs are all way lower, and that's good because we're not in much stuff.
We're almost in nothing, and we want things to go. Okay?
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So, first, let's start with Bitcoin. Bitcoin is better. It's trying to break up. If it breaks up, COIN 0.00%↑ can hit 200 pretty fast, actually, like the 190s. If you can get them in at two bucks, it becomes an interesting play. MSTR 0.00%↑ down 100 points on nothing with Bitcoin pretty much at its high, so keep an eye on that one.
Okay, now let's go to techs, NVDA 0.00%↑ . The wait time went from 11 months to four months, but it actually makes sense because the new product is going to come in probably three to four months. So why are you going to order something that's going to take you 11 months when you have a new product, right? I mean, like if you have, say, DELL 0.00%↑ was selling laptops, which they do, and they're telling you you're not going to get the laptop for a year, but then a new version is going to come out. Nobody's going to buy the old version. Now, they'll keep buying it, but less, so that actually makes sense.
Now, you've got another upgrade of 1050 price target on Nvidia. So here's the thing. If Nvidia is good and they guide up and it runs, probably gets to 830, 840, possibly 900 if they do a split. If they don't do a split, they don't guide up, probably goes to 600. Okay, so you just have to know that that's happening.
SMCI 0.00%↑ was up 25 today, what a move on Friday. Now, some people sent me some messages and they said, 'I couldn't get into SMCI.' Okay, so here's the thing about trading. Let's talk about the basics of trading and why people get dumb.
Okay, look, I say it like it is. So that's it. So we had LRCX 0.00%↑ and our LRCX 950s were $11. They were $11 from $2, okay, but we also had the 925s. They were $30, but they were bid $28 ask $30, and it was $32 in the money. So I'm like, 'What the hell is going on here?' And I'm trying to sell it for $30, and he wouldn't fill them because he knew within a minute it was going to go low. He wouldn't fill them. Meanwhile, it took me three or four iterations of cancel, replace, cancel, replace, cancel, replace, and while I was doing that, SMCI, which had hit 1067, dropped 40. Okay? So at that point, I'm trying to buy the SMCI 950 puts, and the bid was two, the ask was three. Okay, now here's the thing. So I put the order in at $8. Now, this is where I'm saying people get silly. Just as something bid two or three. If the stock is moving 10 points down every 10 seconds, why do you think the price is not going to go up? So to send me a message saying, 'it already moved $5.' Well, the stock moved $50 in the time that it took me to get it. Now, the only reason I got it and I got it at, what, six is because I put it in at eight. Now, let's say you put it in at eight and he fills you at eight, and then the stock doesn't go down. That means the price goes back to three, and you're down $5 within a second. Are you okay with being down $5? If you're not okay, you never put the price higher. We had a good week, everything. So I'm good with losing $8. $8 on 80 contracts, I was good with losing $64,000. I didn't care. That's the only way you get a fill on something that's moving like that. If you think--I mean, I had another question from a guy said, 'why don't you just put it in at $3.10?' What do you think's going to happen if SMCI drops 50 points? Is he going to give it to you 10 cents higher? Is he going to take it to $5 or $6, and then you miss it? That's up to you. If you're okay with that huge loss, then you put it in higher. If you're not, you don't. Or you wait till it stabilizes. Then, in the room, I said three times when it was at $890, and the $850 puts were $2, and I said, 'This guy is an idiot. Who's going to sell those?' Remember, if you buy an option, somebody has to sell that option to you, somebody, the market maker somewhere else. So if the price is $1.50 to $2, who's selling that to you? Because I'm like, 'This thing--this can drop another 100 points.' And it did drop 100 points. That $2 went to $50. Who is selling that to you? I mean, the market maker is taking that risk because he's a moron. I mean, that price $40 out of the money with 2 hours to go should have been $10 because no sane person in the world is going to sell that to you. Only the market maker. So I'm sure he got called into a meeting after that by his boss. He said, 'If you do this again, don't come in. Just take an UBER 0.00%↑ home. We're not going to even give you the car from your parking lot because we're going to sell it to make up for your losses.'
Okay, so two things here to learn is if you want to buy something, there are times you have to put in--and you don't do a market order because if you did, if I did a market on that SMCI, I may not have gotten $6. I may get $30. It may have filled me at $30. Now, a $30 did go to $150. So kind of crazy, right? Okay, $30 went to $150, right? So you still made money. So then the next question was when I sold it. Like, 'Sam, why are you selling it?' I'm like, 'We got 80 contracts, and we just made 24 points. We made $200,000. And the way SMCI moves, maybe it goes right back up, and you lose that $200,000. Why would you not do that? Okay, guys, so you got to get smarter. Okay, I don't care if you get stupid greedy, you're going to get butchered. So why wouldn't you sell those and buy the next ones?'
Here's the thing that I say, and it amazes me that the people in the world that don't understand this. If you buy something at one and you sell it at five, you're up four points. If you put a point in and buy the next one, you just subtract from five. You subtract the point you put in. It's like you got four for that option. So you took one to four. I understand you put one in. You really got five. And that's what you see from it. It doesn't work that way. If you made 10 grand and you put a grand back in, you just tell yourself you made nine grand.
Now, there's a bunch of morons out there and idiots that say, ‘You won one, you lost one. You only have a 50% hit rate.' I'm like, 'I'm up nine grand, and I'm one for one.' See, this is the stupidity of statistics. I mean, just like the Super Bowl, these guys are arguing about Shanahan did the right thing. Let me tell you, you're going to give the ball to Mahomes. You're going to give the ball to Mahomes on four downs, you have to factor that in. So this is the same thing in stocks. You have to factor in what's going on. This is SMCI. It goes up 10, 20, 30. SMCI is up 24 today. What if it opens at 950 today, and if Nvidia is good and it goes to 1,600.
Now, another message I got says, 'You just said it was going to go to 1,600.' I said, 'I said, yeah, it's going to go to 1600. Doesn't mean today.' So it went down. Now, maybe it does come back up. You have to be dynamic. If you expect every account, every single position in your account to go to zero--say you have 50 grand in, you say it's going to go to zero. Okay, I'm good with that. Then you go buy an SMCI position. You're up 200 grand. 50 went to zero. You're up 150 grand. This is TRADING101. It's very, very straightforward, but you got people, 'Well, I can't afford $6.' Okay, I couldn't afford $6 in 92, 93 when I was playing either. So you don't play those. You go slow.
Another question from people that were out there. They're like, 'Well, I got a small account. Why should I play it?' That's up to you. But if you have an account, let's say it's five grand, and you're up to eight grand, what's wrong with putting a grand in? You're profitable. You're up 3,000 to buy an option, SMCI, NVDA, that can go to 10 or 15, and you go one to 15. What's wrong with that? If you lose it, you're still at five grand to seven grand. You're up two grand. See, this is the logic of losers. Don't have the logic of losers. It depends on what you're trying to do.
Now, if you're trying to go five grand to 10 grand, and that's your yearly goal, you would never buy SMCI because you're at eight grand. You're like, 'I'm going to go slow. I have nine more months. I'm going to go slow.' That's up to you.
META 0.00%↑ , hits 488, and it's down 20. Let me tell you things that are going to happen. If Nvidia is good, and I'm not telling you Nvidia is going to be good, if Nvidia is good, Meta is at 500. SMCI is probably at 1200. Okay?
If Bitcoin runs today, Coinbase could be 190 in the first 10 minutes, and MicroStrategy can go all the way to 780. If Nvidia is good, SNOW 0.00%↑ can go all the way to 250. On a miss, SNOW can go to 160. If Nvidia is bad, AVGO 0.00%↑ is going to hit 1150. ASML 0.00%↑ , LRCX 0.00%↑ , going to tank. ARM 0.00%↑ is going to go to 100. Snowflake is going to go to 200. MDB 0.00%↑ is going to go to 400. Meta, going to go to probably 430. SMCI probably go to 500.
Now, I don't know what's going to happen, but here's the thing. People were asking me Friday, said, 'go buy. Why are you not buying for next week?' Because I knew, first of all, the market could open down on today. I knew it, and that's why I didn't buy any because we still like the upside, but we don't want to buy down.
So, yeah, so we knew it, and so we laid off, and we're going to see. So now, if Nvidia--I would love Nvidia to pop down to, say, 709, maybe 699, then we go in. So you end up buying something, and you're still there. You don't have to buy today. You can buy tomorrow before the close, then we see. Then we see. Then we see.
Okay, that's trading. That's being smarter. Be smarter. You get better. Okay, last one. We'll get going here. Under the run after earning. Better to get calls or wait. Okay, ADBE 0.00%↑ . So it took us a couple of days to figure it out. We couldn't really figure out why it was going down. And then OpenAI released their thing. And if you can get OpenAI and their product is cheaper than Adobe and it's better than Adobe and it's newer than Adobe, then Adobe going to go to 400. Now, we're not saying it is. We're just saying that's the perception. And if that's the perception, it started going down and it went all the way down to 546 from 630-640. It's now 90 points. And there's no particular reason to buy it till they come out and tell you something of either their product is way better, they have their own product that's doing the same thing, and their cost is cheaper.
Let me tell you, MSFT 0.00%↑ hasn't released their Co-Pilot numbers because they're probably pretty shitty. Okay, I'm just telling you. And if GOOGL 0.00%↑ or somebody else, META, comes out and says their product is better than Microsoft, Microsoft going to go down 80, 90 points.
Here's the thing that's going on with the AI. Okay? Is all these companies are going to be in trouble if they're not in it. And they may still be in trouble if they're in it because it's a new world. If you have a better product, you're going to use the better product. If it's cheaper, you're not going to just say, 'Oh, well, I'm a Microsoft fan. I love Microsoft.' You're not going to use Microsoft if everything is better. If Microsoft is better or is good and they charge less, then you're going to do it. Okay, so very, very interesting. Very straightforward. If you have a database on AMZN 0.00%↑ AWS that's free or is good for what you need, you're not going to go pay for ORCL 0.00%↑. You're not going to do it. Okay, so you have to understand that you have to factor all this stuff in.
Now, Adobe, when is enough enough? I don't know. But here's the thing. If OpenAI's product can do everything Adobe can do and say they're going to give you a six-month free trial, people are going to leave Adobe so fast, can make your head spin. But if Adobe is better and it's reasonable in price, then everybody will get it.
Oh, one more. I forgot.
Lam Research, ASML. They way down today. I love ASML 950s, but they were $11. They're going to open at $6. I'm not going to sniff on the 6. But if they get to 2, I love them at 2. And I think Lam Research, which is 956, he's 915, he's down 45 points on AMAT 0.00%↑ earnings, which are as good as earnings you'll ever see in your life. But what they're doing, people are just selling. Let them sell it. This is why you don't go in and get stuff that's way higher. And you have to chill and expect zero works. It may not work for you because you lie to yourself. Don't lie to yourself. Buy less. Go slow. And when you have profits, even if you have five grand to eight grand, you have profits. Maybe you say, "I'm going to take a shot with a grand." I never said, "Take the shot with eight grand." Okay. So very, very straightforward. That's what we know. That's what we know.
Let's get to the morning.
Good morning. Good morning, everybody.
Stocks go up. Stocks go down.
SPX. SPY 0.00%↑ We're down a bit. What are we down? What are we down? I think we were down 15, 16. Okay. Let's just assume 16. That puts it at 4985 is somewhere in there. Down 25. Okay. There you go. 4985. 4980ish. You got 4952 on the downside. And you got 5030 on the upside. And you're in a range. But once again, with Nvidia coming out, this thing can go up or down 80, 90 points. Very straightforward.
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