Newsletter 04/08/2025

Quote of the day:Control the controllables. Focus on what matters. Put your energy into what drives you and makes you unstoppable! -AllistairMcCaw
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Good Morning!!!

Trade Recap:

• Weekend Tweet: As you saw in my tweet over the weekend, my thesis was: "Gap down, flush off open from margin calls and I'm a buyer."

• How it Played Out: The market action followed this scenario. We saw the gap down and the initial flush, which presented the buying opportunity I was looking for. Executing a trade like this feels incredible. Visualized the setup all weekend. Feels like more than just a win. Market looked like a small cap stock

  

Questions / Discussion:

• $SPY's Range, Market has changed: $SPY moved a massive $41. To put that in perspective, just two months ago, we were seeing daily ranges of around $2. This isane increase in market volatility can be tough to adjust. I will drill it into my head that I can not sit on the sideline for this but to capitalize on this opportunity need to understand that our trades CAN NOT be random.. Pick a spot and let it play out after confirmation of your personal strategy. The beautiful thing about volatility is you can risk $30 to make $90. That was basically my RR yesterday. During a non volatile market - we can not do that. You will see me think and say something of the similar as this environment continues:
  I am smart enough to know that I need to trade this environment but that I don’t understand enough to be stubborn about the bets I put on in this crazy market.

Now, let's address some of the questions and topics raised by subscribers:

Subscriber Questions and Discussion Points:

• Mindset on Open and Key Indicator (MRP @patelme4):

  • It's crucial to approach the open with a flexible mindset, I really try to stay out of indexes the first 15 minutes minimum - ideally until 10:00 am+. Allow all the emotions off open to get out. I have some MAs on my charts but I do not use indicators for entry and exits. I will use vwap as a guide. Typically when setting up a trade i am looking for a setup in my playbook around key levels. One of my favorites is a double top at the top of the no interest zone. If we immediately sell down through the no interest i may use VWAP as an initial risk and use levels as a guide after.
    

• Premiums in High Volatility (VIX at 60) (JG Trades @jg_trading):

  • With the VIX at 60, option premiums are extremely elevated. Options are expensive. The key is to be very selective and have a clear thesis with a good risk/reward profile. Even if your directional assumption is correct, the magnitude of the move can still cause losses. This is what we mean when we say, "you can be right and still be wrong."

• Going Long and Short Simultaneously in Volatile Markets (KA @ka_boom_sol):

  • This is an advanced strategy and requires careful execution. To be clear I do not do this and am certainly not advance enough for this but I do think It can be done, and here's a conceptual approach:

  • Levels: Use key support and resistance levels (like the "no interest" levels mentioned) to define your zones.

  • Example: In the "no interest" zone (487.68 - 501.01), you might consider a small long position near the lower end (487.68), with a tight stop, and a small short position near the higher end (501.01), also with a tight stop.

  • Midpoint Strategy: You could use the midpoint of the "no interest" zone as a key decision point. If the price is above the midpoint, favor longs; if below, favor shorts.

  • Risk Management is Paramount: The goal is to profit from volatility while minimizing directional risk. Position sizes must be small, and stops very tight. This strategy is about capturing quick moves within a range, not predicting large trends jmho as always. I think personally I would just be all over the place with this and would end up in a lose lose.
    
    

• Market Bias (JetsFanGreg @PrEzElBOY):”market bias”

  • This is a critical point. As I mentioned, even though I had a general idea of the potential setup over the weekend, I waited for the market to confirm my thesis.

  • Many traders get into trouble by having a strong pre-conceived notion ("bias") and trying to force the market to fit their view. I am smart enough to know that I don’t understand enough to be stubborn about the bets I put on in this crazy market.

  • The key is to remain objective, I was trying to find every reason not to take the trade above and it got to the point to where I could not find a reason based on the R:R

  • Bias is OK to have in the back of your mind as long as you do not allow it to control you. understand that nobody understands enough to be stubborn in this market

  Sectors/Stocks for Dip Buys (Ron Vara @Not_BruceBanner):

  • Are you asking from a trader's perspective or an investor's perspective?

  • I think having a plan for allocation is key. If you were on the sidelines for the past few years, I think this could be a nice opportunity, but understand:

    • What is your timeline? The market can go much lower and not see highs for some time.

    • IMO, all of this is key to your decision.

  • I think DCA is the most optimal way to gain exposure to the market but if you are looking more at short to medium term holds for a potential bounce

    • Consider factors like:

      • Have a watchlist and look for relative strength

        • For instance - I think cost has been holding up really well

      • Moving averages imo will be key. Who can regain them and build off of them

      • Strong fundamentals

      • Recent overreactions to market volatility

      • Long-term growth potential

      • Relative strength

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SPY – ALOT going on this week. Again wait for your pitch!

Small Caps: A ton of “black swans” recently. This is so interesting given the overall market.

• Seems SXTP is paid promotion

• NAOV maybe post 10:30 am if it is above 10 I will be interested.

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GOOD LUCK AND BE SAFE

H.H

_{“Hazard Zet Forward”}

_{PLEASE READ: I am doing this because I love the community and enjoy talking about stocks. I have a right to talk about stocks and I’m going to do just that. Nothing is advice. I am not a financial advisor. This is not advice (seriously, i mean it). I am not a pro. I could be buying or selling any ticker mentioned at any time. One more time - I could be buying or selling any ticker mentioned at any time. I will do what I want and I want you to do what YOU want. Any money made / lost is the result of your personal decision - “Daily Newsletter” “Hugh henne” “Mitch Hennessey” or anyone / anything connected to any of those are not liable.}