Monday, February 24, 2025

The Wealthpin Weekly Plan 02.24.25

Will it be a green week?
 
   
     
WORLD PREMIERE: Unlock the Power of My Wave Indicator at 1PM ET

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Monday, February 24th
“I do not mean to be sentimental about suffering…. but people who cannot suffer can never grow up, can never discover who they are.

- James Baldwin
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Well, ladies and gentlemen! Back from my ski trip last week…
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And the markets fell harder than I did on the slopes! Friday saw a massive 100 point drop on the SPX, erasing nearly a month and a half of gains. 
 
 
Seeing big red candles like that is never fun. But it was expected. Wednesday was vixpiration, which is when the market’s volatility instruments expire. It’s usually on the third Wednesday of every month or so. Volatility is a short instrument, so if markets rise into the vixpiration date, market makers will be forced to cover their shorts. If that happens, markets will drift higher. 

After vixpiration, however, there’s no need to cover any longer, so a selloff can commence. I actually told my friends about this on February 14th (but I don’t know if any of them made money lol). I

 
 
The question is: 

Is this a one-time selloff? Or will it turn into something more orderly and long-lasting? At this point, we’ve had multiple tests of SPX 6100, which have all been immediately reversed. I see two paths. One, we continue to chop up between the 6020 - 6100 levels like we have for the past few months. Two, we drop below 6000. If that happens, I think the markets could enter freefall mode and see a 20% correction. 

But we will have to wait and see what happens. Let’s look at some trade ideas for this week.

Euro-Defense

In December, I talked about how European defense stocks would likely be a good buy ahead of a Trump presidency. 

 
 
Right now, those stocks are up 5-30% depending on the ticker. I am still bullish on these companies. Recent comments made by Vance, plus the incoming truce in the Ukrainian War signals a major U.S. divestment of Euro-centrism. No longer will Europe be quite as protected by the American security umbrella. They will have to spend on their own defense. And defense companies will benefit from extra spending. 

DASH

 
 
After a significant run up, DASH is now in a bit of a retracement. I think there’s a support line at $180 or so. If it holds, DASH could recover. In the meantime, I like the 21 MAR 25 $180 PUT. Trading for $2.50 right now. 

BROS

Starbucks just announced that it’s laying off 1,400 HQ staff amid flagging sales. Dutch Bros will hurt if Starbucks hurts, methinks. There is a pivot point at $59 or so. I think we could be looking at a retracement back to that level. In which case, the 21 MAR 25 $65 PUT options trading at $1.20 could be well in the money. 

Northrup Grumman

As tech melts, it might be a good idea to find other more defensive (pun intended) tickers to trade. Like NOC. 

 
 
Northrup Grumman is bouncing off its pivot point from back in July. I like the 21 MAR 25 $480 CALL for $3.35 or so. 

And don’t forget. Today at 1PM, I’m going to be revealing my brand new Wave Indicator that I’ve been using for the past few weeks to real money gains like these:

 
 
So be sure to tune in!
 
 
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To Better Trading,

Alex Reid
Wealthpin
 
WealthPin
   
     
   
 

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