Stocks dropped hard on Friday, and I don’t really know why.
Maybe it was the riots in France. Maybe it was the run on CoreWeave, or all the oil news. Either way, this market is going to keep doing it.
AI can keep booming while AI stocks keep dropping out from under you.
I think this cycle gives us a string of small bubbles that inflate and pop in weeks, and maybe never the one giant bubble everybody’s waiting to ride.
That’s bad news if you’re waiting for a clean ride up.
For traders who know how to catch the turns, it’s the kind of market that can set you up for the rest of your life, and tomorrow morning I’ll show you how I made 66% on a stock that fell 10%.
You Can Be Right And Still Lose
In 1998, Long-Term Capital Management was run by some of the smartest people on Wall Street, including 2 Nobel Prize winners. The fund bet that prices on related bonds would come back in line, and it borrowed about $30 for every $1 it had to make that bet.
Then Russia stopped paying its debt in August 1998. Those prices pulled further apart, and the fund lost 44% of its value in one month.
Fourteen banks and brokerage firms had to put in about $3.6 billion to keep it from falling apart. A lot of those trades eventually worked out, but the fund couldn’t hold on long enough to see it.
The internet went the same way. Demand turned out bigger than anybody expected, and Global Crossing and WorldCom still went bankrupt. When you own the stock, you have high upside, but you could also get the bagel, which is zero.
The Market’s Going To Move
The resets come a lot faster now. In January 2025, Nvidia lost about $589 billion in market value in a single day, the biggest one-day loss in market history, after a Chinese startup called DeepSeek said it could build AI for far less.
Nvidia’s earnings didn’t change that day. How sure investors felt about its future did.
The same thing is happening across AI right now. A company can beat earnings, raise its outlook, and still watch its stock fall, because investors are paying less for every dollar of those earnings.
The VIX, Wall Street’s fear gauge, was sitting near 18 this morning. It measures how much movement options traders expect from the S&P 500 over the next month, and at this level, the market’s going to move.
Most people do one of two things with that. They panic and sell at the first sign the market is turning, or they sit on their hands and hope. The top 1% of traders anticipate the change and set up a trade to take advantage of it.
Sell The Stuff People Want
I’ve been getting rid of my oil stocks, because oil is a commodity and those stocks are trading at all-time highs. The easiest way to raise some dough to do other things is to sell the stuff that’s making a lot of money.
I sold a bunch of them in April, and now I’m like, “Okay, this is dumb. I should sell a bunch more.” By the end of the week, I’ll probably have about 10% of what I started the year with.
An all-time high is where a trade starts, and so is a 52-week low.
I Made 66% While The Stock Fell 10%
In Nokia (NOK), I saw the change in direction coming and set up a trade for it. The stock fell 10%, and I made 66%.
I’ll walk you through that exact trade tomorrow at 10:30 a.m. ET, in the first of 3 live classes. Class 1 is all about how to find and trade market tops and bottoms.
On Wednesday, I’ll show you how one adjustment to a stock position can cut your risk in half. In Altria (MO), the stock made me 2%, and my downside play made me an extra 100%.
On Thursday, I’ll show you how to trade the fastest-moving stocks for a fraction of the price. In Meta, I controlled 100 shares for $1,175 instead of $56,800.
When you enroll, you also get a $2,000 credit toward Trader X, our program for the top 1% of traders.
You want to be a top 1% trader. You want the X factor.
===>Enroll In All 3 Classes For $1
Andrew Giovinazzi
P.S. That $2,000 credit stays on your Option Pit account forever, so you can use it whenever you’re ready. Class 1 starts tomorrow at 10:30 a.m. ET, and it’s the one on tops and bottoms. Grab your seat for $1 here.