Jul 7 – Jul 11, 2025
Nick SchmidtJuly 12, 2025SPY-0.28%QQQ-0.36%
Rotation week. Tech resting and money moving into banking, energy, construction. That's not distribution, that's healthy rotation and it's the lifeblood of a bull market. The extended names deserve multi-week consolidation and trying to fight that by chasing is how you get chopped up.
Bought SOUN on Monday's weakness and it ripped 25% in a day so I trimmed a quarter to sit easier and hold the core for a bigger move. Same approach I used with QUBT. UPWK was a quick shot that didn't work, bought at $13.45 with a $13 stop and got stopped Friday. The risk/reward was too good to pass up and it either worked or failed fast.
SMCI continues to be the cleanest position. The 10-week is rising toward my entry which makes the position essentially risk-free. Light volume on pullbacks, no real selling pressure. Exactly what you want to see.
Six positions, fully invested. SMCI is the standout. UPWK stopped Friday.
Bought SOUN on morning weakness and UPWK at $13.45 with a tight $13 stop.
Trimmed a quarter of SOUN after a 25% one-day gain to sit easier.
UPWK stopped at $13. Quick in and quick out.
50% of a stock's move is related to its industry group. A stock that looks good but no other stocks in the group look good is more likely to fail. So the process is step one identify the theme, step two identify one or two stocks in that theme that deserve my focus. I keep wanting to skip step one and go straight to the chart but the group context is what separates the setups that work from the ones that don't.
Low relative volume during sideways action is a huge tell of accumulation. I started sorting my watchlist by lowest relative volume daily and the names at the top are consistently the ones that set up next. It makes sense because drying volume means sellers are exhausted and the stock is just sitting there waiting for buyers to show up.
The strongest uptrends are made up of at least 50% red days and I think that's the thing that shakes most people out. They see a red day and think something is broken when the reality is that's just what a healthy trend looks like on a daily chart. Focusing on the weekly chart captures the large move without getting shaken out by the day-to-day noise.