MSTR parabolic short: is this an A+ short opportunity?
My plan lately has been to trade a few times a month at most, trying to nail setups and make $100k in my A+ setups, such as parabolic runups and sell-the-news trades. The last two trades worked great: sell China into the economic conference in Oct, sell DJT into the election in Nov.
I don't have a very high endurance meter at that moment. Trading and having risk in the market is very draining, very tiring, very annoying. Shorting parabolic runups can be extremely difficult and thus I take an approach that's simple.
I wake up. I consider the factors. Then I ask myself: is it, right now, one of the 10 best setups of the year? If NO, then I don't trade it. I don't even want to risk $1k because that opens the possibility in mind to trade it again and lose 2k, which opens up the possibility in my mind to lose 5k, 10k, and so on... all self-justified because "well, I didn't lose 100k yet!" I don't want to fall into that trap. I'd rather go for a walk and eat a good sandwich then suffer through whack-a-mole bullshit trading.
MSTR today. I woke up. I imagined a scenario where it would rip through 500 in the first 30 minutes and maybe go insane to like 540-550... and maybe that would be worth a shot as an A+. Didn't think it was likely, just a thought that would get me involved. It didn't happen. Standard 10-15% gap up day that grinds all day. Some traders I know chased the micro dips and got v-ripped as the move was met with support. I hate that shit, I've been there chasing those dips short too. It just builds even more frustration at a time when conviction and courage are paramount.
Here's the thing now. It had a fake break over 500 to end the day and then it sold off. I'm starting to believe in a short-term top this week at that price. I wouldn't call it an OBVIOUS SCREAMING capitulation or blow-off--like the massive extension that was SMCI. The price-insensitive buying to create such violent action just isn't there at these levels near 500. So it seems more likely we get a more subtle correction. "Soft top" I'll call it. IMO We're now more likely to see 400 before 600. And here's another weird tell that I noticed when SMCI crossed 1000: I remember more tweets this morning about MSTR than any other day, just like the day SMCI topped. Even people who would never day trade or would ever take a position MSTR in either direction, started tweeting about it. That's a sign of a narrative peak and usually price does not lag far behind.
I have read a bunch of narratives on why this stock is up. The yield. High IQ Saylor. Reflexivity and financial engineering. Whatever. None of it matters to me. I don't like to overthink with any of that. It's important to stay flexible, listen to what the market tells you, what your gut tells you, and to not get stuck in rigid thoughts like "it has to blow off to 600 or I won't be involved".
I think if we gap up and erase that gap, then take out the 460 level on MSTR, there's probably a red daily candle down to the low 400s. Flushing the whole and "finding the eights" is usually ideal, so let's call 380 PERFECT day 1 target.
Could it go lower? I'm not sure, I try to look for the high probability one day move. I'm personally too bullish on bitcoin itself--it's my largest long term position--and maybe it goes through 100k to 120k. That could fuel MSTR again towards 800, who knows, hard to say. I'll be long gone by then.
Is this type of move worthy of "A+" label and thus my mental capital? I'm still trying to decide but my gut says I have to at least try tomorrow for the "soft top". I don't often like to write "game plan" posts like these because I don't want to be glued to a bias but I do feel this is the likely scenario. If it's just strong as hell at $500 and up from the opening print, I don't have to do anything. Good luck to all those who are hunting the white whale.