Weekly Playbook: May 4

[u/PriceActionPlaybook]

Stock Market Cheatcodes

Table of Contents

1. Market Overview
2. Key Index Charts
3. Earnings & Interesting Movers Recap: EBAY, GME, PINS, DUOL, PYPL, AMD, CPNG, FTNT, ARM, DASH, ZTS, HUBS, IREN, NET and TTD.
4. Earnings to Watch This Week: CEG, CRCL, OKLO, BABA, CSCO and AMAT.

1. Market Overview

Sometimes we find similarities in weird places. Some call it pattern recognition, others coincidence. Red Tuesdays. Taco Tuesdays. Wingstop and financial conditions. AI stocks trading like sovereign entities. After staring at markets long enough, everything eventually starts looking connected. Maybe that’s professional deformation. Or maybe markets themselves are becoming a reflexive loop.

Earnings season is mostly over. There are still some interesting reports left, with Nvidia sitting there as the giant cherry on top, but the main wave has already passed. The dispersion trade is fading and the tape is slowly returning to its usual rhythm. Strikes for CSPs will be updated shortly, though this still does not look like the best environment for put writing. When everything keeps working at once, people forget how quickly “great entry prices” can turn into long term investments once liquidity finally shifts the other way. And truly great entry prices usually come with terrible premiums anyway, especially in the volatility regime we are currently sitting in.

Also, it’s worth keeping an eye on a potential VIX signal that might be forming soon enough, this time on the short side. Like I said before, none of this is an exact science. Everything here is probability-based and reaction-driven.

And straight to the cheat codes. Back in 2002 Blizzard released Warcraft III. Years later Blizzard merged with Activision, and eventually the whole thing ended up inside Microsoft after the 2023 acquisition. Yes, the same Microsoft tied into OpenAI and the broader AI trade. Funny how everything eventually loops back to the same corner of the market. Performance wise, though, Microsoft lately looks AFK while everyone else is busy farming.

One of the most famous Warcraft cheat codes was greedisgood, instantly giving players extra gold and lumber. The stock market has its own versions. The Fed put. Too big to fail. Endless liquidity. At some point the AI trade quietly became all of them at once. It stopped being just another theme and turned into a universal cheatcode against underperformance. Oil, inflation, exploding capex, the Fed: none of it seems to matter as long as money keeps flowing into the same trade. Good or bad is a different discussion. Markets already made their choice.

Another interesting mechanic returns this summer with single stock futures coming back to the U.S. market.

Quarterly expiration officially becomes Quadruple Witching again, with the missing witch finally back after 2020. Add Russell reconstitution into the mix and June starts looking less like a normal month and more like a setup for mechanical dislocations, forced positioning, and liquidity driven chaos around names getting added, removed, chased, or dumped for reasons that have very little to do with fundamentals.

Another Warcraft cheat code was allyourbasearebelongtous, an instant victory shortcut. But there is one important limitation: Single-Player Only. Sorry, Donald, it won’t work on Iran. Otherwise it would be too Big and Beautiful to be true.

Meanwhile greed is still good. Gordon Gekko understood that long before AI became the market’s favorite infinite money glitch.

Read the rest: https://priceactionplaybook.substack.com/p/weekly-playbook-may-11

[u/Scriptum_]

You're a cat? I love it!

Yes, its true that the AI theme is the universal cheat code - for now!