With the Iran war ongoing, the past week has been very headline driven. A core tenet to remember is the trend tends to continue. Even if the trend is whipsaw markets.
Markets closed at the lows on Friday and gapped down on Monday. No surprise there. Oil closed near the highs on Friday, and gapped up. Again, no surprise. Remember, the markets are a leading indicator. This applies to overnight and swing trades in particular. But if you do one thing right, volatility is a hedge.
Here’s the Daily Accelerator agenda for today:
- The Big Picture: My most basic rules for trading volatile stocks in any market. Pay attention.
- Watchlist: One big tech company had a stroke of genius, and I really like the stock.
- On My Radar: Volatility is up and sentiment is down. All the more reason to take extreme ownership.
The Big Picture
If you followed the rules, the past week has been incredible. If you broke the rules, you’ve probably had a pretty bad week. That’s what volatility does.
What are the rules? If you’re day trading speculative stocks, penny stocks, or volatile stocks like the big movers…
Never add to a loser. Ever. I don’t care what justifications you want to make up. Never. It is the iron law. You only add to winners.
Now, if you’re swing trading a quality stock in a hot sector, that’s another thing. It’s completely different because you want the dips.
This is where people mix up day trading and long-term trading. You have to completely disconnect your investor brain from short-term trading. One reason so many people end up in trouble is they use the investor mindset to trade chart patterns.
The market rewards good decision making and punishes bad decision making. It doesn’t matter whether you trade penny stocks, mid-price stocks, or the S&P 500. When they fade into the close, you cut. When they close strong, that’s your sign to hold overnight.
People constantly want to fight it. It goes back to the idea that you should cut your losers and let your winners run. Why hold and hope? Why pray over the weekend that it will gap up when it’ll probably gap down?
Winners hold winners… Losers hold losers.
My Take
Remember, there are three time frames that I trade:
- Day trading
- Swing trading
- Buy-and-hold
I don’t even look at my IRA or 401k when the market is whipsawing. I have retirement accounts but I don’t even look at them when the market is like this. Who cares? Look at the S&P 500 100-year chart. Forget about them and trade short term so that when things get rocky, you can offset. I think of short-term trading as a hedge. Instead of crying about your long-term holdings, trade the whipsaw. It’s the ultimate hedge and right now… It’s a target-rich environment.
Watchlist
Apple Inc. (NAASDAQ: AAPL) did something very interesting when they came out with their own silicon chips. Decades ago, Apple had Motorola processors. Then they switched to Intel, and then they started making their own. In hindsight, what they did with the memory architecture was genius. It makes Apple the go-to computer for running your own AIs.
Source StocksToTrade AAPL, 2-year, daily candle, 200D MA, bullish
A Mac Mini retails for $600. Because of the memory infrastructure, it’s a perfect local AI server. If you run any of the performance benchmarks they just crush it.
Apple is predominantly a consumer company. But I think this opens up big potential for them expanding into small data centers. I don’t see Apple in the enterprise data center space. Nvidia owns that and Google has their own chips, as well. But when it comes to small data centers, or if you run locally like I do, Apple had a stroke of genius with this hardware.
By the way, you can’t get a Mac Mini or a Mac Studio right now for this exact reason. Again, I’m not talking about the big data center hardware. Nvidia is still the leader there. But when it comes to the stock, I like this idea.
On My Radar
- The CBOE Volatility Index (VIX) closed above 30 on March 27 for the first time since April 2025. Meanwhile…
- The University of Michigan’s sentiment index fell to 53.5% – a 3-month low. No surprise there. Gas is about four bucks a gallon around me with fear of inflation tied to the war. Talk of “boots on the ground” in Iran is adding to the pressure on major indexes.
- Extreme Ownership: How U.S. Navy SEALs Lead and Win by Jocko Willink and Leif Babin is a “must-read” for every trader. If you want to be successful, that is…
- You might know I have 120+ acres. It was so nice to have decent weather over the weekend that I walked almost 50,000 steps. After the screen time and trading… take a walk.