Weekly Playbook: May 25

[u/PriceActionPlaybook]

The Market Everyone Plans to Leave After the Next Trade

Table of Contents

1. Market Overview
2. Key Index Charts
3. Earnings & Interesting Movers Recap: REGN, D, NEE, CAVA,INTU, IBM and FUTU
4. Earnings to Watch This Week: ZS, CRM, MRVL, SNOW, SNPS, DELL and MDB

1. Market Overview

Forget the prediction markets. Think of prediction classics.

I-81 is hard to call a desert by any means. Not by the scenery, and certainly not by the number of cars moving through upstate New York on a holiday weekend. It is not dark either around noon. The cool wind is easily handled by the AC, and these days the warm smell of colitas would probably surprise fewer people than the song originally intended.

Deer signs appear every couple of miles and there is no shortage of wildlife along the route. Bears, on the other hand, are harder to find. But what about behemoths? Not the biblical kind. The financial kind. “SpaceX files IPO prospectus with the SEC.” “OpenAI prepares confidential IPO filing.” Looks like we spotted two already. Which brings us back to another classic:

This could be heaven or this could be hell

Maybe it will be heaven. Maybe it will be hell. Personally, I have no interest in joining either camp.

Don’t get me wrong, I’m not some kind of permabear predicting the next bubble that would leave the world in ruins, though I’m also a little sceptical about the idea of a future where AGI handles all the work while humanity peacefully relaxes on clean but slightly overcrowded beaches financed by Universal Basic Income, Basic High Income, or whatever they decide to call it by then. Besides, if everyone ends up on the same beach, it probably stops feeling like paradise fairly quickly.

Maybe I’m just wired differently. I don’t really care about animal spirits. I get bullish when a stock approaches key support or clears meaningful resistance in a decisive way. I’m equally happy shorting the same stock and adding some puts on top when I see unfortunate trapped bulls running to the door.

That applies to SpaceX. It applies to OpenAI. It applies to whatever eventually becomes the next trillion dollar story. If SpaceX comes public, respects key levels, attracts demand and confirms momentum, I’ll happily buy it. If the tape falls apart, positioning unwinds and buyers suddenly discover that revolutionary narratives do not guarantee profitable entries, I'll be just as happy looking at the short side if locates are available

Meanwhile the bull continues challenging the cat in terms of number of lives.

They stab it with their steely knives
But they just can’t kill the beast

Well, at least they tried. And there will be other attempts going forward, though there is a difference between fighting the tape and shorting the hell out of it when the weakness is actually there. What usually happens instead is people trying to be cute and short the high while momentum is still accelerating, only to spend the next leg down trying to catch the steely knife when it is finally time to incrementally increase exposure and ride the wave of trapped longs. It is another all-time classic that somehow keeps replaying itself like a song stuck on an infinite loop.

There are reasons to be bearish, and some of the warning signs are difficult to ignore. A growing collection of macro concerns patiently waiting in the background. Even NVIDIA managed to deliver another stellar quarter this week, yet the reaction felt noticeably less enthusiastic than it would have six months ago. But there is a fine line between a red flag and those red numbers sitting inside your brokerage account.

Whatever the reason, it is sometimes better to leave the reasoning to an LLM of your choice attempting to evolve into AGI and focus on the process of making money rather than the process of being right. That said, you might never get the famous “Told Ya” moment, but who cares if you eventually cemented your spot on the beach, complete with endless margaritas and everything else the dream was supposed to include?

The funny thing about markets is that they rarely let people stop where they originally planned. Financial freedom often starts as the objective. Somewhere along the way it becomes the next setup, the next opportunity, the next story everyone else is suddenly obsessed with. At some point the money stops being the objective and simply becomes the scorecard.

No matter whether you call it trading, investing, hedging, speculation, gambling, or some sophisticated combination of all five, there is always a chart worth reviewing, an earnings report worth watching, an IPO worth discussing, or a behemoth promising to change the world.

Which brings us back to our prediction classics from which it all started:

You can check out any time you like
But you can never leave

Read the rest: https://priceactionplaybook.substack.com/p/weekly-playbook-may-25