How I manage days like today....

Notes from a sell everything day

Days like today suck. There’s no sweet way to spin it. AI and momentum got washed out across the board, plenty of names down 10-15%, and yesterday wasn’t much better. If you’re in this space you felt it. It’s a sell everything AI market right now, plain and simple.

So how do I actually handle a day like this. I go back to my research. I reread my own reports and remind myself where my conviction sits and why it’s there. Price action moves fast and it’s easy to let it drag your perspective around with it. My job is to keep the two separate, price is what the market is doing right now, conviction is what I know about the business.

That conviction comes from a specific checklist. Do I want to own leading stocks? Yes. Do I want them trending above a rising 50 day moving average? Yes. Do I want them building tight flags and breaking out clean? Yes. That’s the setup I’m always hunting for. The market doesn’t always make it that easy. Trading isn’t easy, and days like today are part of the game.

I run heavy size and I hold leading names for as long as they let me. Part of that process is letting cost basis work in my favor. I own $VPG at $45 and $PENG around $30, both up well over 100% from cost. Both businesses are executing on all cylinders. Stocks like that have earned the right to keep working even when they cool off with the rest of the momentum trade.

Drawdowns come with that territory. Chasing real outperformance means accepting more volatility, that’s the trade you’re signing up for the moment you decide to build concentrated conviction instead of hugging an index.

The other piece of today’s work was scanning monthly and weekly charts across 50+ names over the last few hours, checking which higher timeframe setups held up and which fell apart. $PENG on the higher timeframe still looks fantastic. It’s off its high of $89, but that’s the sell everything tape doing what it does, not the business or the high timeframe setup deteriorating. $VPG on the weekly is the same story, well off its highs but doing nothing wrong from a business or high timeframe setup. The thesis on both has only gotten stronger since I bought them, and my targets sit well above where they’re trading today.

None of that means I get sloppy on new risk. New buys get managed tight, especially with any real size behind them. I’m fine running smaller size and letting a new position breathe, but the moment I’m putting larger capital to work, the risk management gets tighter even when conviction is high. This environment will punish you if not. I also have advised to not press the gas and probe. I have come out liking the risk to reward on put sales, but still don’t think new, size risk in this environment is worth it. Can that change in a moment’s notice? Yes. That is the beauty of the market.

Today stung. Honestly one of the worse days of my trading career, but it’s been a great year, and I own names I believe in deeply. Go back to why you bought the stock. If the thesis has only gotten stronger since you did and you have a cost basis advantage, you’re in a good spot. And if you’re sitting on cash, days like today are the gift to probe and be ready to press the gas when the environment becomes ripe for more risk-on.

Have a good night guys!