Sell Rallies.
Weekly Plan 12.14.25
One of the remarkable things financial promoters use to lure in un-suspecting retail investors is by weaving a tale of extraordinarily high returns whether calling Bitcoin to trade into 1 million by 2027 or for a certain stock to be worth more than all of the mega caps combined.
I want to kick off the post today by warning about pitfalls of chasing these merchants of easy money tales. This could not come at a better time when the public markets in the US are shrinking. The billionaires and the insiders are quietly placing huge bets on good, solid companies in very early stages of growth by going private. This is where true value creation is happening, while the average retail is left to chase public stocks at these insanely high valuations, driven primarily by FOMO. This is an exclusive club and most are not in it.
Ask yourself— why are these promoters so keen on sharing what they truly believe is going to be a 1000% runner? Is it from goodness of their heart? If so then why do they dump stocks on you and use that money to go to private markets to buy early stage unicorns like Google bought 10% of SPACEX in 2015 and you will buy same stock 10 years later at 1.5 trillion dollar valuation?
The high-percentage gains (10X, 20X) used by promoters for assets like stocks or Bitcoin are designed to exploit deeply ingrained psychological biases in un-informed investors. This is a common tactic, particularly in low income producing assets. The prices of these assets are based on hype, not profits.
The primary tactic is to create an artificial sense of scarcity. Promoters frame the opportunity as a limited-time window to achieve life-changing or generational wealth, thereby triggering FOMO and neuron activation in non professionals.
Urgency: The message implies, “If you don’t buy now, the price will soar without you, and you will miss the only opportunity.” This bypasses rational analysis in favor of an impulsive emotional response.
Social or Tribal pressure: Promoters often hint that “smart money” or large groups are already buying, making the retail trader feel left behind if they hesitate.
In reality, this is the very defining characteristic of a “Pump and Dump” scheme.
The Pump: The manipulators quietly acquire a large position in a low-volume, illiquid asset (the pumpers are often the ones making the promotional pitch). In many cases they are the founders of such a company or crypto project themselves.
The Hype: They then use exaggerated claims (like the 10X promise) to pump up public interest and drive the price higher, attracting retail investors driven by FOMO.
The Dump: Once the price is sufficiently high, the manipulators dump their holdings onto the retail investors, cashing out large profits and causing the asset’s price to crash, leaving late buyers with heavy losses.
The key takeaway is that in real life, 10X returns are rare, take time, and are almost never guaranteed especially by some promoter on the internet. If the investment truly offered easy, guaranteed 10X gains, the promoters would simply take the opportunity themselves rather than sharing it with strangers.
Think of this as an analogy of a nudist colony. A nudist colony is rare. It is scarce. May be for some going to one is fun. May be a group of nudists convince some few hundred mainstream folks to become nudists themselves, but this does not mean that 8 billion people globally will become nudists. This is the exact same situation with crypto like Bitcoin. Yes it is scarce but that scarcity is man made. It is not based on anything fundamental!
If you have been a subscriber these last couple years or so, you would know we are no strangers to these big movers— a PLTR at $6, a SOFI at $10, HOOD at $3, a Carvana at 3 dollars or even a KGC at $5.
We do not promote stocks— we just find stocks with bright future selling down at deep discounts. This is our MO. We are not into pump and dump. We will find right stocks at right price when the time is right. 0 doubt.
As the year winds down and I look ahead to where the next 10 or 20 bagger might come from, it’s hard to ignore how few names in this market still feel capable of delivering that kind of upside.
Levels for next week
I have now rolled over to March for emini S&P500. Emini S&P500 March contract is now trading 6890. SPX at time of this post is trading 6830, so about a 60 point difference.
I use emini levels in these posts, unless noted otherwise, so please subtract about 60 from these to come up with SPX levels.
So the first zone of interest is that HVN I shared in chat below on Friday where coincidentally we saw the market carve out an exact low intraday at 6865 and rallied some 50 handles higher.
I think if we hold the high of this HVN at start of the week, there could be some selling pressure to explore what is right underneath the HVN low. If you are not aware what an HVN is please, read my post on HVN and LVN but in short this is the volume consolidation at the lows on Friday.
Couple of price action scenarios:
Scenario 1: This Friday low near 6860 remains key. If we break this and continue to hold advances against it, I think we could test 6783-6800 on the week. On the flip side, if this level continues to hold, we are probably going to test 6930.
Scenario 2: Edge case on week will be 6800 on downside and 6930-6950 on upside. I think there is enough firepower this week in terms of event risk to breakout of this range we have been seeing.
Outside of week to week and daily levels, I remain optimistic on size and extent of Fiscal and monetary support for these markets headed into 2026. Read my post from last week where I did a fuller and deeper dive on some of the more long term support levels on this market and a roadmap of how we get there.
Below are few tailwinds for equity markets—
AI related spend by the IT CIOs is now gaining steam. Spending on AI (including applications and services, not just hardware and data centers) is forecast to reach $632 billion by 2028, representing a Compound Annual Growth Rate (CAGR) of 29.0% over the 2024-2028 period. AI is cited by 42% of CIOs as the technology initiative driving the most IT investment in 2025, surpassing other critical areas like cybersecurity and data analytics.
The tariff stance from this admin has softened a lot. On top of that between next couple of weeks you have the SCOTUS decision on Trump tariffs which could further provide clarity on this going into 2026. I expect tariffs to now be a non issue going into the midterm year— this could on paper be supportive of equities if there is a dip.
On top of this, looser financial conditions provide a supportive growth environment for stocks and risk on in general. If treasury yields keep pushing higher, the next move for a Federal Reserve more aligned with President Trump’s thinking in 2026 could be a return to asset purchases aimed at capping borrowing costs across the economic. That path would likely weaken the dollar, risk stoking inflation, and further inflate equity prices.
The flip side of-course is that widening deficits will continue to push yields higher. This is one of the biggest risk to equity prices in 2026. You already saw this on Friday with 30 year yields pushing higher despite what I will call a “relatively dovish FED” a day before. On top of that, IF president Trump gets his way with sending $2000 “stimmy” checks to Americans, this could add even more fuel to the fire and we could see an upward pressure on yields.
Despite these risks, I think as long as Trump remains at the helm, my base case for 2026 will be higher growth in the US for some sectors, the year should continue to provide tailwinds for the top 10% of income earners, widen the wealth gap, and consequently dips should be supported.
Now the open question remains— what is a good dip? Is 6800 a good dip? I covered roadmap to a good dip and how we get there in my last weekly post. I think a 6000 dollar dip is a good dip in S&P500, but to get there we will need to begin to see this market close below 6750.
TSLA
As a short term lotto, keep an eye on this $440 TSLA Monthly/Weekly PUT, if had around 70 cents to a dollar. This will be a counter trend scalp trade where I will break even stop at 20-30% gain.
You have the FSD news out this weekend which could see the stock open gap up, but if the general market remains underwhelmed, this PUT could be a good scalp trade. If TSLA trades, 468-470, this could be at play as long as general market does not break out of the range high at 6950s.
XOM
Regular readers will recall, against all odds I have had a bullish view on XOM.
This stock has since then climbed about 20% higher and is now trading $118. I think if there are any dips into 114-115 on XOM, this could be supported to move higher unto 130s.
These June 2026 Monthly $125 calls look good from risk to reward between $3 and $4.
On a parting note, I want to talk about realizing the difference when day traders are active and when Other Time Frame traders have entered the mix.
This is mainly relevant for those of you who are active in day time frame. This is extremely important and if you do not grasp this, day trading will end in frustration, nothing more.
Nearly 60-70% of the sessions we are dealing with day traders and market maker algos slugging it out, providing and taking away liquidity, to eke out small gains, both up and down on the tape. These add up, it is not uncommon to see these type of traders stack 20-30 points even on dullest of days. This sort of action is very good for extremely fast traders who can flip from long to shorts within a moment’s notice.
For most everyone else, you want to be active on days when Other time frame traders are active. Which is like 1-3 sessions out of every 10. Volatility begets volatility and volume begets more volume. These type of sessions are best for cleaner, trend and counter trend moves. This is what we saw on Friday. Friday’s session is a template for these type of sessions.
Bottomline is just learning to differentiate if it is a day trader day or an other time frame trader day will make a huge difference to your trading. Make it a goal to learn to identify what type of session it is. Day trader day strategies will not work on trend days. And vice versa. The conclusion of this realization is that you want to control how much you are willing to lose any given day. Let us say you are a 20 point a day trader. This is a long term average of trading 6-12 months.
I will be sending out a list of key educational posts on this topic shortly, make sure you read the ones on market profile and brush up on key concepts like related markets and market internals.
This is really good if you can build on it by increasing your size from one lot to let say 10 lots. You can easily split the 10 lots and not able to make any meaningful dent in the market structure. In other words no one cares if you are a 10 lot trader. Size starts becoming an issue once you start swinging above a 100 lots per trade which is rare nowadays anyways, that was so 2011!
Now rather than trying to find the holy grail, focus on how you can increase your lot size. You are already consistently making 20 points a day which is very good, considering 70% of all sessions will be day trader sessions. Build on this by saving yourself from large losses.
The main issue is 2 fold and this is why most traders will fail—
Holy grail does not exist, you will not find it.
Your max loss is far larger than your average win. For a 20 point trader, to lose a 100 points on any given day, he or she is not coming back from this.
The answer is not to keep wasting your years finding holy grail. The solution is to stop losing more than 40-50 points on any given day and instead build psychology required to go from trading 1 lot to 10 lots to 20. This is the holy grail you want to find in 2026.
God speed and good luck.
~ ticcy
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