Tech is Crashing. We Are Buying. 📉💸

📰 Intro: How to Trade a Bleeding Market

The market is weak right now. The tech darlings that usually lead the pack are selling off hard, and even commodities are pulling back (though they remain relatively stronger).

While the amateurs are throwing in the towel and giving up, this is exactly when the real work gets done. A weak market is a giant filter—it strips away the garbage and highlights the absolute strongest stocks on the market.

Here is how I am playing this environment, and the fatal mistake you need to avoid.

The "All-In" Trap Many people think that when you find a good setup, you should buy your entire position all at once. If they have $1,000 to invest as a long-term or position trader, they dump it in on day one. This is a mistake. 

In a bad market, many good setups will fail. If you go all-in right away, you take unnecessary damage.

Instead, you need to use Progressive Exposure and separate your capital into 3 batches.

The 3-Batch System:

1. The Pilot Position: Start with a small, low-risk initial entry to test the waters.

2. Prove It & Scale: If the stock moves in your favor, raise your stop-loss on the first batch to breakeven, and then add your second batch.

3. The Final Tranche: Repeat the process. Raise your stops again, and add the final batch only once the trend is confirmed.

Since the market is choppy, many good setups will inevitably fail. The best way to navigate this is to take small pilot positions in strong names. These strong names will be the biggest runners when the tide swings in our favor.

It keeps you engaged and tracking the market's pulse without the risk of taking heavy losses.

The $GEV ( ▲ 0.16% ) Masterclass

To show you exactly how this works, let's look at my current, open position in $GEV ( ▲ 0.16% )  (GE Vernova).

I didn't buy my full position on day one. By scaling in slowly using the 3-Batch System and trailing my stops up along the way, I have completely locked down my downside.

Right now, I am only risking $40 of my actual capital on this trade, but I am sitting on a $700 open profit.

The trade is still running, and I am still in the process of building the full position as the stock continues to prove me right. This is how you survive and thrive in a weak market—let the winners pull you into the trade.

Think about that for a second. That $700 USD open profit from just one properly executed trade is enough to pay for a Profit Punch premium subscription for 4 years.

If you want to stop guessing, protect your capital in this choppy market, and get access to the exact systems and setups we use every day, it's time to step up.

Now, let's look at the large-cap setups I am watching right now to anchor the portfolio.

🏆 Top Big-Cap Setup

$LLY ( ▲ 4.86% ) (Eli Lilly) – Long Term Trade

The Context: While the rest of the market panics, the weight-loss drug king is ignoring the noise. Unprecedented demand for Zepbound and Mounjaro continues to drive massive revenue growth, insulating this stock from tech-sector volatility.

The Setup: We are seeing a massive Big Base Breakout on the monthly chart, which is now forming a high, tight monthly flag.

• The Pattern: A flat base with only a ~10% correction. This is incredibly constructive.

• Strategy: Good time to start building a position.

• Risk Management: Risk 0.15% to 0.2% of your account per leg. Raise your stop loss on the previous leg every time you add.

🇨🇳 The Contrarian Play: Chinese Automakers

Context: Very deep corrections are notoriously untrustworthy, but the monthly signals here are so strong that they warrant a starter position. We are bottom-fishing with strict risk management.

$NIO ( ▲ 4.34% )  (Nio Inc.) – Long Term Trade

• The Setup: Textbook monthly setup. We have a monthly moving average crossover test, the RSI is testing a crossover signal, and the Composite Index is flashing bullish. Start building a pilot position and see where the trend takes you.

• Use $NIOG ( ▲ 9.38% ) the x2 ETF for a more powerful move

$LI ( ▲ 0.82% )  (Li Auto) – Long Term Trade

• The Setup: We are seeing a massive Monthly Shakeout (bear trap) combined with a break of the long-term downtrend line. The momentum is shifting.

🚨 Coming Up in Part 2: The "AI Builders" Breakout

In Part 2 of this week's newsletter, I am breaking down the only two sectors that are completely ignoring the market crash right now: Utilities and Construction. 

I have 10 specific setups mapped out, including a 7-month base breakout and a massive infrastructure cup and handle.

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