08/23/2024

Hey Trader,

Here’s why we shorted NVDA the day before earnings.

Everyone else was calling for a bull flag breakout, just like last earnings, where we saw a similar setup that did break higher.

But this time, two things stood out.

First, the FOMO factor. Traders who missed the last breakout were too eager to jump in again, thinking it would be just as easy. My mentor always told me, "The market is designed to fool the masses," and this was a classic contrarian setup. Sure enough, we got the gap lower.

Second, the pattern itself was different. While it looked like a bull coil gaining steam, if you looked closely, it was more of a broadening top — a sign of losing momentum, not gaining.

Mark set us up with a nice, inexpensive put fly on NVDA. While everyone else was panicking over the drop, we came out on top. The key is being on the right side of the market — and we are.

I believe the market will continue lower until we get job numbers. As I mentioned in my last letter, the market needs to break out now — and it still hasn’t. That's concerning.

Either way, we are going to trade it like we see it.

Join us for a week right here and check it out. You get a Free Trial as a Trading Today reader!

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Always be closing,

Olivia Voz