What's up, traders? Happy Monday! The market was absolutely bonkers today, ripping over 2.73% higher. While the move was sparked by news around China, the technical reality is that we held critical support and are now challenging the 50-day moving average (50 DMA).
The sentiment shift was immediate—we went from extreme bear to extreme bullish really, really quick. This raises the most critical question for traders right now: Is today the bottom, or are we facing a massive market bounce bull trap?
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The Return of Speculative Money
One of the most encouraging signs during this massive upward move was the flow of capital. We saw heat in all the old speculative (specky) names. When risk-on money starts flowing, especially into high-beta names and even crypto ETFs, that’s a signal you have to respect.
We saw moves like 20% on tickers like BMNR. While these were heavily oversold, the sheer volume and momentum cannot be ignored.
Key Takeaway: Respect the flow. Speculative heat means traders are willing to take on risk again, a necessary ingredient for a sustained rally.
If you want to learn how to trade news check out this article I just wrote on Stock Market News!
🚨 Trading Strategy: How to Avoid the "Whoosh" Trap
While today was extremely bullish, we must be prepared to trade both ways. Do not assume we go straight up from here. The danger of a market bounce bull trap is very real.
A high-probability scenario that occurs frequently after these aggressive V-shaped moves is a quick retest:
- The Initial Rip: The market rockets higher, causing FOMO. (This is today).
- The "Whoosh Down": You get a sharp, swift candle down (potentially tomorrow or the next day) that scares bears and traps new longs.
- The Higher Low: The market then makes a higher low (a successful retest), consolidates around the EMA crossover area, and then rips back higher.
Do not be surprised if you see a significant pull-back that attempts to retest the recent breakout zone. Be mindful of this trap, as the real breakout may only occur after the successful retest.
The Top Watchlist for Tomorrow (Featuring ONDS)
Following a massive up day, the watch list is stacked with strong charts. Here are the names I’m focused on:
Top Breakout Candidates
ONDS: Volume Monster. 200 million shares of volume. Every dip has been bought up. Finally cleared its recent range.Top of the list for continued momentum.
AVGO Big Stick. 52 million shares of volume. Sitting right on the edge of a major breakout.Look for a weak open to buy the dip.
MSFT: Blue Chip Breakout. Sitting near a two-level breakout, approaching the 200-day moving average.Strong continuation play.
GCT: Inside day after a big push on news.Needs to take out $36.00 to confirm continuation.
Reversal and Support Plays
DDOG Post-earnings pop, pulled back six days in a row, now right at the 50-day moving average.Prime bounce location.
FSLY Coming back into the "Bone Zone" after the earnings pop. Did a hammer candle right on old breakout support.Look for a move over the nine EMA.
GOOGL: Options Explosion
You rarely see a blue chip like Alphabet (GOOGL) move 30 points in a day. The options activity was insane, with calls up 500% to 1000%—not on a 0DTE, but on a Monday! This kind of options action suggests major institutional money movement and makes GOOGL a must-watch for volatility.
AMTN: Nuclear Energy Play
This is being pumped as a DOE nuclear play. The float looks very tiny, which can lead to rapid price acceleration. If momentum builds, AMTN could see a muscular movement into the suction zone.
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🖋️ About the Author
Kunal Desai is the founder of Bulls on Wall Street and a veteran trader with over 20 years of experience. He’s trained thousands of traders to master setups, develop discipline, and trade consistently in real time.
