Transcription
We're rallying a little bit after hours here, guys. And some of this I redid and I just want to go through a couple things that I think are super important. You're still not breaking through that 725 level. And I want to get into this one core concept because I think you guys could really benefit because people are getting whipsalled out there and a lot of people don't understand the concept of holding things core and a trading position. I'm going to tie this into earnings tonight. I'm going to jump right into it for time sake. As always, subscribe, click all notifications. Let's get to it.
Now, I want to take a second to talk about what happens in environments like this because it gets goofy, but you, in my opinion, you have to trade it, but you have to understand the volatility that you're dealing with. So, if we take the magnet off and let's just look at the first five minutes of earnings here, and you're down 11% or $129. The majority of people that are going to sit there and say, "Oh, we'll just hold it." That's not really very realistic. You have to sit there and look at these movements and really think about what you're going to do in those kinds of environments.
What I tend to do in these kinds of environments is this, and you'll hear me say this live. I have a core position which I will keep as a swing position and then I will have a trading position and that position is based upon what? Trading. Just pulling money out. Constantly pulling money out of it as a day trade. Most people will tell you that, oh no, make a decision. Just hold it. You're never going to scale doing that. And I'm just going to explain why. You're not going to be able to handle the volatility. Most people say, "Oh, no. Yes, I will."
Now, if you work your way up to where you're holding a significant amount of something like this and it all of a sudden opens and it's down $129 in 5 minutes, you're not sitting there and going, "Oh, I believe in you." Like, that's not what you're doing. What you're doing is going, "Oh my gosh, I can't believe I didn't sell the open." So instead of that by straddling this in a system we have a core position and a trading position around it makes life easy and that's exactly what we're doing. We have all of these we have core positions on where we're doing swings in the community or longer day trades that we've held and then what we're doing on top of that is putting ourselves in a position that when we see certain patterns we're taking advantage of it. Today this became very clear that they wanted to be long and strong. Now we can discuss whether this is at that exhaustive buying stage or not but that's not up for debate is that when it starts breaking out that it has the potential to move. So when we start seeing this we can take advantage of it and keep a core position on it's going to allow our main thesis to play out and then on top of that we have our other thesis which is the trading position here.
Watch this play out live. SanDisk I'm going to buy for a minute and I'll let you know exactly what I'm doing with it in 1 minute. The SanDisk is gone. I'm up in that. Not much. I'm just going to hold it for a minute. I'm going to chill out here and just watch everything. Keeps going. I'll just keep winning. So, I don't really have to chase anything. 322. So, now I'm up $20 on that trade. I'm just going to trim some. I'm just going to keep winning there. So, I'm not going to do anything with it. I'm up $30. I'm going to sell a piece of that day trade off. Up 30 bucks. 40 on that trim. I don't want to be trimming these when they're falling. It's too fast. I'm going to trim when it's doing that. Usually when I cheer, it's time to like pull something out. Up 60, trimmed on these kinds of pushes like right into that. I'm just going to trim again up 70. All I'm doing is just pulling money out as it goes. I'm not doing anything with the core position, but I'm down to about half of that day trade. See this right here? Once that forms on a 5m minute, that will become my stop on the remainder of that trade. Okay, I am 100% out of my day trade.
Now, when you understand these concepts, you can do them over and over again. I tend to do them with full percentages. Meaning, let's say a full percent is going to be 10% of a position of an account. Let's just say that's not how I set my positions up. I send them up per unit of risk. But if I look at something like this, like we bought this on earnings that day because it was ridiculous that it came down. This allows us, this kind of strategy allows us to stay in while this is going on. And it means that you pretty much like let's say your position size is 10%. Right? And let's just say that means that you can own 100 shares of this. Doesn't really matter. So you're putting 50 shares on and then you're taking 50 off and you're trading around that 50. But core stays on long as the day doesn't break. The reason that this works better is because anyone will look at this in hindsight and say to you, "Oh, well, you could have just bought here and then bloopy blippity bloop and then you'd be up $400 on the whole thing. That's why I do this." Well, what were they doing here? What did they do that day? Right when it gapped up to 691 and then by the end of the day closed at 569 they weren't doing it that way that day because they had a super secret password that told them you were going to gap down $100 or this reversal. What did they do? Right? This is the things that when you see you have to have actual processes in place to do this because it's not about just maximizing one idea. It's about having a process that works throughout the years. And it takes a while for you to design what's going to work for you. I can only tell you what works for me. You have to do what makes you comfortable. But this kind of thing will keep me in names. It will keep me in names like STX. It'll keep me in names like Western Digital.
When Western Digital had earnings the other day and I read the report, it was a fantastic report. It was really simple. I came in, I said, I'm going to buy. I'm going to trade out a half and I want to hold the other half. And as long as it doesn't break this, I'm out. Now, that allows me that when this trades up and I'm up a decent amount to not say, well, do I hold? I already have it thought out. One's a core, like one I'm going to just say it in units. Like, I have two units. We'll say one's a core, one's a trading. I'm up $50. Okay, I'm out. Well, I can just trade that portion again this day as well and take advantage of the volatility. I'm not married to the fact that I can't have that trading position back on that I couldn't get in that any day that it looked advantageous to have a trading position on. I hope this makes sense. It's a really important concept to get. I'd like to dive into it more in another video, but this is the kind of thing that will keep you in trades.
When we were looking at Intel and we bought Intel down here and then it rallies up, pulls back, I actually put another trade on at like 84 or something and then it's rallying up and then it's rallying up and then I get an inside bar here and I'm like, you know, I'm not holding this into this. I don't know how this is going to play out. Blah blah. I cut it and then people will say, "Oo, well, you got out before." Yeah, man. There's a buy button. I can just get back in the next day if I want. Right? It doesn't matter. You just set up the process and then those processes are set up and then when you come in during the day, you're like, "Oh, this is I have a core position here. I have a trading position here. I have a full position in this." And then you can quantify your risk. It also allows you to be much more nimble and handle drawdowns because once those draw downs kick in, you want to be able to read information.
So today, you had a piece of information and everybody read the thing wrong and they read it wrong and they read it fast. It was right here and it was the US is working with Asia to fix the bottleneck with chips on memory side on the memory side of chips. And so for some reason they sold this down. If you have a full position size on and you're in here and then all of a sudden your stock's down 70 71 from 75, you can panic. You could get out. If you have a core position and a trading position and something like this happens, it actually gives you the ability to go back in there and buy more. And that's exactly what we did today when this happened. I'll give you an example. So, you can see the movement here. And from there, you can see this is what we did. I'll just blow it up this way. So, you see the bottleneck here. And this is just me typing fast. Spelled wrong. But, you know, I bought EWI and then I just tagged it. So, they know what I'm doing. They know where my stop is. And all I'm doing is buying in there because I've read the news. I don't have the full position on. I can add to my core position, which is a lot lower on that news. And then I take advantage of it, but I've already designated that this is a trading position. So, when it trades up into these movements, I'm actually scaling out of it. And then all of a sudden, we're hitting new highs. And instead of panic selling some and an hour later going, "This thing's at new highs. I'm going to buy it back and then having it roll back over on you again." We avoid all that because we're taking advantage of the volatility.
If you don't have a process to take advantage, specifically in this market, how many times have you gotten stopped out of things and then they just rip? It's exhausting. And with the way the headlines read right now, it's certainly they're certainly not making it any easier. And I don't think that they're going to anytime soon. After hours, we had some huge movers. AMD is actually up $30 at the time of recording this. It's been pretty wild. We had that piece of news that happened with Anthropic, and a lot of these reversed right on that news, and then from there, they just kept ripping. But a lot of these names were actually down before that Anthropic news, and since then, the majority of them have a bid and they've been holding that bid. Now the conference call is going on right now at the time of recording this and the conference call is going exceptionally well and she's talking about growth out for the next 5 years 35% in CPUs and we're seeing that move the name. What's so interesting is it's not moving all of them commensurate. So it's a really kind of weird market after hours and I'll show you a couple more things that are interesting but this obviously had a massive reversal. The earnings were good. The guide was good. I don't know that it's this after moving 100%. But you know, you have so many people like myself that love shorting this name, they just get trapped and then you can just see and that's pretty much it. That's pretty much the end of the story. So I tend to just do it with puts and then trade around the puts. It just seems a little easier to do.
If you look at Intel today and the huge move up $15, am I getting concerned about getting to that point of exhaustive buying? Yeah, I do get concerned about exhaustive buying. You know, when I don't really get concerned about it, when everyone's asking me, is this exhaustive buying? That usually just means that the answer is no. So, if we look at something like this, Intel absolutely crushed, forms, breaks out, forms a little three bar pattern, breaks out again, looks like it's going to break, and then goes after hours. I'm really surprised if AMD does hold here, why you wouldn't see Intel push even more on this. And it ties into a couple other things. You're seeing it after hours on Micron. So in other words, we're seeing Micron continue to push, but I believe that push has more to do with the Google news than with anything else. So for me, that Google news was absolutely huge with Anthropic. And I'm surprised you're only up how much you're up. I think people will digest that news tomorrow, understand the partnership there, and really want to start paying attention to this. I mean, you formed a beautiful flag. The flag's holding, and it looks great. We did see some deterioration today in the big seven with what was happening with Amazon and how Amazon's breaking down after hours. I thought that was kind of interesting. I have a position there. Meta is trying to hold on for dear life to that 600 and that is a huge put wall there and it's doing an okay job. If we take a look at something like a Microsoft, you really have not got out of your own way since earnings. But overall, I mean, Google tonight, yeah, I'm a little surprised you're not up more if I had to tell you what's the most surprising thing on that news, $200 billion. I think it's an absolutely huge move and I'm absolutely really surprised that you're not up more.
I am I do think that you're going to get more people that are going to look at DRAM now based upon a couple things. So, first and foremost, the one piece that I would take from the AMD call, and I tried to listen to as much of it on and off as I was recording this again, do I think you deserve to be here? No, not at all. I mean, you increase guidance, but you you're a $400 stock earning $139 a quarter. Like, okay, but I'll trade it. I'll trade. If it moves, I'll trade it, but I don't get it. I think the important part of this is if she's right about the CPU growth, you really have to take a look at what that means for something along the lines of DRAM and how much more demand is going to be there for DRAM for computers. And I think that that's what people are starting to understand. So for me, yeah, I think it's absolutely huge and I think that that's exactly what you're starting to see. You're seeing the DRAMs even up again tonight. EWY, which is, you know, we've been in and out of this thing forever, but you're bidding up again. And I think that you're going to see this continue. That's where I think that this is heading. I think the DRAM space is going to be absolutely huge, but overall, did you have some other names out there that were okay? Yeah, Light was okay. It wasn't great, but you did move on that news. So all when this news hit, it all hit around the same time on Anthropic and then everything just kind of reversed and then everything started settling back down. I don't view it as bad. I just view it as the stock moved a lot in a very short period of time. And when you start to see that things like OI, we're watching this after hours again, of course, and you're just not seeing, pardon the voice, rough day, but you're going to see these names and they're going to have some movement to them. And then of course you're going to have other movement as well. Uh ARM this week. Now people will start to like that because of the CPU data as well.
I guess the way that I'm looking at it is this. There's one constant here and the constant is whether it's CPUs, whether it is GPUs, whether it is data centers, no matter what you say, you need more memory. Even the US is coming out trying to figure out how they're going to partner more with Asia and these other countries to get more memory chips. It's becoming a national interest and I think that if you go back and look at what we refer to as the four horsemen, I don't see any reason for that to change at all. And I certainly don't see any reason for people to start looking at Micron and wondering why it is where it is or wondering why SanDisk is up the way it is or wondering why EWY is. I think it's very clear why they are where they are. That's it.