Pullbacks in the Mega Cap Mag 7? No way batman!

BY ANDREW GIOVINAZZI

February 27, 2024

Yo Pit Crazies,

 

The Trade Zone closes soon due to demand and the class filling up.  Get in while the getting is good.

 

You know it is a slow newsday when Palo Alto Networks Inc (Ticker: PANW) dominates the news after Rep Nancy Pelosi buys calls in 2025 in the cyber security firm.  The little run to all time highs last week and the brush with 5100 SPX got traders buying stocks like rabid dogs.  Today traders were happier jumping on the perfect Pelosi train.

3 month chart in PANW

Apple Inc (Ticker: AAPL) continues to trade poorly.  With stocks at an all time high AAPL is 10% off of its all time highs.  AI got tossed a monkey wrench when the Google Gemini product produced results that did not pass Fintwit muster.  It seems AI 1.0 is no better than the folks who program it.  That pulled the whole sector down.  It is a reminder that poor management could mess up the AI revolution in the short term.


Bitcoin is getting love to make a new run to all time highs and beyond.  Coinbase Inc (Ticker: COIN)

Apple Inc (Ticker: AAPL) continues to trade poorly.  With stocks at an all time high AAPL is 10% off of its all time highs.  AI got tossed a monkey wrench when the Google Gemini product produced results that did not pass Fintwit muster.  It seems AI 1.0 is no better than the folks who program it.  That pulled the whole sector down.  It is a reminder that poor management could mess up the AI revolution in the short term.


Bitcoin is getting love to make a new run to all time highs and beyond.  Coinbase Inc (Ticker: COIN)

For whatever reason, now that stocks have tasted 5100, some hot money is going to Bitcoin related assets.  Mega Cap Tech is getting wrecked save Tesla Inc (Ticker: TSLA) which helped a bit Monday.

 

Let’s look at some ideas.

 

Bitcoin is on a streaky bender

In a hot market on a slow day, news that moves the needle really gets stocks going that have a passing connection to the news.  Bitcoin is running to all-time highs at this point.  Stocks like RobinHood Market Inc (Ticker: HOOD) Block Inc (Ticker: SQ) and Tesla Inc (Ticker: TSLA) are all associated with Bitcoin and the news reading algos do remember those types of things.

 

HOOD is very near making a 2 year high, which is in break out territory.

I am long HOOD strangles in the Easy Button going well, SQ calls from a Pro Chat Trade idea not going well and TSLA call butterflies going well from the Friday OP Live sessions I do with Mark and Licia.

 

Sign up for those here if you want actionable ideas on a Friday morning pre open on the Tradier Hub:

 

Mark, Licia and Andrew are streaming live every Friday on the Option Pit YouTube channel.

 

And sign up for a free Tradier Hub account for tons of exclusive content.

 

In the AI cycle, there are other narratives that can jump in everyone once in a while and hungry traders can ride that horse too.

To Your Trading Success,

 

-AG

Andrew Giovinazzi

30-Year Trading Pro

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Mark Sebastian

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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About the Author

Mark Sebastian

Mark Sebastian

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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