Fool Me Once...?

That quote above is one of the reminders I keep at the top of my quick reference trading document. And this week, it kept popping into my head.

I spent a good part of last week caught up in the noise. I had been reading more news articles than usual, and I noticed two narratives: a lot of classical traders and investors were not sold on the rally (I still share this sentiment), while YouTuber’s were screaming to “buy the dip!”.

There was a lot flying around…tariffs on, tariffs off. Then Wednesday’s: “THIS IS A GREAT TIME TO BUY!!! DJT" post from Trump, followed just hours later by a 90-day pause on tariffs……🧐

The market launched higher, and short-term puts were instantly cooked. The president declared it's time to buy and then pauses tariffs just hours later…while institutions and insiders were already locked into calls and stock. 🤔 Okay…

What I will confirm is that the bounce that started Monday was technically sound. That move was reasonable, coming off the January 2022 pivot, which is also near the 2020 uptrend line.

And what I will say about recent action is: we have seen this before. I remember my first trading mentor calling the 2020 decline an anomaly. But maybe the real anomaly is just the idea of expecting normalcy when Trump’s playbook is in effect.

For my trading, the charts come first, but understanding the environment we are in is equally important. This includes what our overall trend is, where we are in the trend, and how price is reacting to key moving averages and levels. Most of the time, I don’t pay much attention to news outside of earnings or company-specific headlines.

That said, this environment is different. When a single post from the president can shift momentum mid-day, it’s worth staying more alert than usual. Being aware of potential intraday catalysts can help manage risk, especially in a market that’s moving more on reaction than technicals.

Now let's take a look at the technicals.

Market Outlook

The S&P 500 just bounced from a key structural level: the January 2022 pivot. While the bounce came near the long-standing 2020 uptrend line, the January 2022 pivot is what clearly held on both the weekly and monthly charts. The move was strong, but the path ahead remains uncertain. Price has pushed off the lows, is holding on the a key monthly EMA, but it still hasn’t reclaimed important resistance levels on the weekly and daily chart. This bounce is still in the proving phase.

🟢 Bullish Scenario

On the daily chart, the first hurdle for bulls is reclaiming the 10EMA and 20EMA. Above that, resistance lines up at 5666 and the daily 200SMA and 50SMA. A break above those levels and the moving averages means we are back in bull country. 

🔴 Bearish Scenario

If the bounce moves away from the daily EMAs, watch for a move back toward 5123 and 4953. We could retest the 2020 uptrend line which is around 4750 as well as the weekly 200SMA. A break below the 2020 uptrend line and 200SMA would compromise the broader uptrend structure.

⚪️ Neutral Scenario

The market could remain trapped between 4950 and 5405. This kind of base-building isn’t uncommon after sharp drops and strong rebounds. It gives traders time to define risk, let emotions settle, and prep for a clearer directional move. Patience here can lead to better setups once a breakout or breakdown becomes clear.

Stock Spotlight: CVNA

Heading into this week, CVNA is stuck between a few key levels, showing signs of strength off last week's low, but still trading under key resistance. The bounce off the 148 pivot was sharp, reclaiming the 10EMA and 20EMA.

🟢 Bullish Scenario

If CVNA continues up, it will face resistance around 219. But if it breaks above this level that includes the February 2024 uptrend line, May 2021 pivot, and the daily 50SMA, it will not have a lot of overhead. This would open a door toward around 250 and 260.

🔴 Bearish Scenario

Failure to break through 219, or lose the 10 and 20 EMAs, could set up another leg lower. A break back below the daily 200SMA would clear the path back to 157.

⚪️ Neutral / Chop Scenario

If price continues to hover between 194 and 219, we may just be seeing a consolidation phase within a broader downtrend. That would suggest neither bulls nor bears have full control, and we could expect choppy, range-bound behavior this week.

A break outside of this range with volume would help clarify the next direction.

So while I still come back to that question—do I want to be right, or do I want to be profitable?—this week reminded me that being profitable starts with staying alert and understanding that we are in a volatile period with a volatile president.

The market is reacting quickly, and sometimes irrationally, to headlines, posts, and shifting policy. The reactions may keep coming without much warning.

If you’re in options, tailor your stops. Be thoughtful about size. And don’t completely tune out the news—it’s not always about the long-term story, sometimes it’s the intraday noise that hits the hardest.

Stay grounded. Stay aware. And most of all, stay ready.