Okay folks, so we've got a lot to get ready for this week. Number One: We're going to talk about the hottest trade setups that you violently need to know about, number Two, a breakdown on Catalysts approaching this week, and lastly, notable earnings coming up. And before we start. I do want to take a moment to recognize the brave men and women who paid the ultimate sacrifice.

It's very easy to take peace for granted, especially here in the United States, but peace is never free. Someone had to and has to earn that peace. Happy Memorial Day! Okay, let's get to work. So the market finished off the week with a positive reversal.

after seven consecutive weeks of downtrending on Friday, it meaningfully broke over our red directional Sma line, which we consider testing in upward direction. Recent previous attempts to hold reversals upward have been futile, but the over concentration of bears during the overall downtrend, The overall sell-off which started at the end of March, suggests that we have a prospect for a contrarian rally in the near future, especially before the June 14th to 15th Fomc meeting, and perhaps even slightly after that if we don't get any knee-jerk decisions. My personal view is that markets have increasingly factored in Fed rate hikes at least the next couple of meetings, but the market has not factored in recessionary trends. It's probably overshot inflation expectations and undershot recessionary expectations.

Okay, moving on to plays: let's talk Sega: Siga de Biga On the 19th, we briefed on Sega at around nine dollars a share as it was running on the Monkey Pox trade hype. Catalyst Its Iv Smallpox therapy had been approved, setting the perfect stage for a run during a time period where demand for pox treatments that also could work with the new Monkey Pox outbreaks are needed. Keep in mind that whether or not outbreaks become a huge deal, governments and other organizations will still buy up potential treatments in order to be ready for any possibility and the speculation of where they're shopping next or which companies can meet demand. If this becomes a bigger outbreak has caused and will likely continue to cause in waves speculation, capital to flow in, and indeed, Sega ended up jumping to 15.

We reflected on it last Sunday and my take was that you'd see it pop early Monday morning which was now a week ago on weekend hype and then dump 40 to 60 percent and you want to pay attention to where it finds support for a new residual rally On the next hype wave related to this ongoing Monkey Pox story, it ended up popping Monday morning to 17.5 and then the next few days it did end up dumping around 50 50 55. I originally thought it would find support within the first couple of sessions, though I complained on Wednesday that you need to see more proof of concept and we ended up not really getting much in terms of proof of concept until Thursday and then you got a meaningful bounce. Then we briefed on it again. Friday morning because it was showing that proof of concept day over day and my take was the crucial levels for this are just under that 10 region for support and just over that or just under that 11 region for resistance.

Now see go! While it was a tease for the middle part of last week, it did end up having a bigger residual rally than I had expected and I'm pretty satisfied with it in terms of whether Sega has more opportunities this week. I believe you want to watch the case, outbreaks, and the media coverage on this based on my background and my zero scientific knowledge. although I did watch the Magic school Bus as a kid and they did a lot of scientific exploration. To me, it seems like the Monkey Pox outbreak story and thus the Monkey Pox trade has a very tight time horizon.

However, we are only in the first couple of weeks and outbreaks continue and the trend starts continuing. So my take is if that continues amplifying, you're going to see a smaller version of what happened last week to Sega happen again this week Probably looks something like this. it jumps up a bit in the early week before people take profits again, and then you want to watch to see if we can retain a higher low, a higher support. If we can retain around somewhere about that 10 level, that's a huge bouncing board to work towards a higher breakout past 17 5..

But remember to always have a clear entry and exit plan. In fact, if you look at the symptoms of Monkey Pox, they're very, very similar to the symptoms of losing on a monkeypox trait: fever, headache, muscle aches, backache, fatigue, chills, swollen lymph nodes. Who hasn't felt every single one of those symptoms? Especially those swollen lymph nodes When you're down on a position, remember Superman once said, with great great volatility comes great responsibility. Next, I've been increasingly looking for overreaction trades in this market.

You see stock after stock lose tons of value. On days where you get the biggest of blood bash, you get what's called a overreaction selling, but then a combination of margin calls and a combination of unthoughtful panic selling resulted in the price getting beat down a lot more than perhaps it deserved to, or at least initially deserve to. And that's when you play off the opportunity for a bouncy bounce. On Thursday we saw Avdl dump 68 on delay of their narcolepsy drug.

I felt that was a bit severe considering that the drug was delayed not denied and the reason for that delay. What was cited was the Fda wanted the company to add certification to one of its patents, a move that should allow them to get the approval down the road. So nothing here really changed. This dumped As if they were rejected, they certainly didn't reject it.

And that's the beat down I saw as an overreaction and it turns out that was the correct hypothesis. but you always wait for proof of concept. You got the proof of concept in the morning and we briefed on it at about 150ish a share and it ran to 266 at heights which is around a 76 percent increase. We certainly don't have these opportunities every day, but when we do, we gotta have fun with them.

If you'd like to join us for our daily morning briefings which are fairly violent in Zip Trade Review, I'll go ahead and give you a link to Ziptrader you below. You can check out everything we offer in terms of the full program, but it is a program that we expect you to put work into in order to get your money's worth out of it. And even without the program, you'll be able to get a ton of value out of these reflections and get some ideas in terms of what's working and what's not working in this market condition. But we do offer a program for folks who do want to take it a step further.

But speaking of our briefings, if you were reading them last week, you'll notice Redbox has been coming up again and again. But why? Charlie? Well, obviously it showed a ton of proof of concept with its overall reversal upward after it tanked following the chicken soup for the soul Acquisition news. And this is actually a pretty fascinating story. And what's crazy is that under the current formula, each Red Box share would be exchanged for Chicken Soup shares now worth about 59 cents.

which means that at a price of 7.71 as of close on Friday, it's about 13 times the buyout price on the first Momentum Cycle for Redbox, which we covered in depth on the channel. You didn't have that acquisition hanging over the head of investors, and when you did, all of a sudden you got a massive sell-off But now in the second Momentum cycle, the game has completely changed. now. traders are essentially racing against the clock to see how fast this can run up before the acquisition goes through, which is slated for some time.

In the vague words of Red Box and Chicken Soup for The Soul to be in the later half of 2022. And since the short sellers know the deal was for significantly less, they are ever emboldened to short this with Ortex estimating that 156 percent of free float has been sold short Now, which you can make your own conclusions on. But with the race against the clock towards acquisition, short sellers are very, very emboldened knowing. Okay, well at the end of the day, this is going to be worth about 59 cents, but buyers are ever motivated to buy this saying, wait a second.

Well, okay, maybe it's gonna be worth 59 cents in terms of the buyout, but that's not happening until the second half of the year. In the time before that, the high conviction short sellers can be squeezed out squeeze speculators are buying into the scene how far they can make it run before that inevitable acquisition. My projection is that this battle is going to continue at least until the end of Q2, which ends about June 30th. Why? Well, because the risk of acquisition doesn't start until then, Because again, they said the second half of 2022.

so they're not gonna do it this month. So Speculators know that they have at least a month to meaningfully put a pressure on short sellers that feel and really are justified in shorting the stock. The biggest concentration of put options into mid-june is at that one dollar strike price, which means a lot of players are essentially buying the right to be able to sell shares at one dollar less than a seventh of the current trading price. And in fact, most of the put options, even the more expensive contracts at strike prices that are more likely to be hit from three dollars to seven dollars are seeing the most concentration despite being far out of the money.

Still, the options chain symbolizes one thing that hedgers and markets overall are expecting Redbox to be trading at far far below this price, even as early as June 17th. partly because that's what makes sense based on the acquisition deal, but the level of conviction that we're seeing from the options chain and from short sellers may end up biting them really deeply in the rear if squeeze speculators cause a ricochet effect by buying the stock and squeezing them out before their thesis is even given time to be proven correct. and it will be proven correct overall. but not right now, right? It's a time crunch.

so this is a very fascinating play. And I'm not suggesting you should or shouldn't play it, but in terms of my take on it, it's very fascinating because you have short sellers that have a reason to be short this, and you have buyers who have a reason to get the heck out before the acquisition ends. But there's a lot of time between now and when the acquisition happens, and a lot of the short sellers that feel so justified in shorting. This could be in for a lot of heartburn if the price goes up a decent amount before everything falls apart.

What good is a big short position? If you get margin called before you can even realize that short, right? In terms of the latest on Bbig, Bbig's Kryptide spinoff, as you probably know, by now, was delayed once again. although Bbig cited both contractual and regulatory conditions, it's my understanding in my opinion that this was mostly Sec cost Kryptide filed form S1 on May 9th to go public outside of Bbig, but the Sec needs to approve it before the distribution can actually occur and they simply haven't approved it in time for the distribution to go as planned. So in terms of when the distribution and when this catalyst happens, the ball is really in the Sec's court. Bbig will in all likelihood continue its overall pump and dumpy trading that it's shown for really the last year.

In reaction to developments on this catalyst, let's talk overall Catalysts: This week, you're going to be hearing a lot about the Meme Revenge trade. The Us movie industry had a big holiday weekend thanks to Top Gun, Maverick, and the Chevy Cruze, but Top Gun was released solely in feeders and this Memorial weekend provided a huge opportunity for people to go see it. and it got excellent reviews providing subbing for Amc folks to be excited about with the overall uptrends that came last week. On top of that, you also have Gme Gamestop reporting earnings on Wednesday, the day of Wins Options for this week indicate market expectations are for a 20 to 25 move.

In either direction, a normal earnings report may imply a move of about two to three percent, maybe at most four or five percent. but a 20 to 25 move is Huge. And when Gme moves, especially if it's positive, you better bet that Amc is going to move. and a bunch of other meme related stocks and squeeze spectator stocks are also going to move quite a lot.

so certainly worth paying attention. And then the main two catalyst the market is going to be watching this week. In terms of the macro or Wednesday, you get Fed presidents James Bullard and John Williams giving a speech. It's not expected they are going to do anything to greatly change policy because we didn't have any big information come out, if anything, recent data has been a bit more on the positive side, so you're not expecting any more hawkish escalation.

But there's always that chance and you want to be aware of that. And then on Friday the employment report for May will be released. This will be anticipated and speculated on all week. Pay close attention to how fast wages are growing.

It's a bit of a lose-lose in that category because if wages start going down or stagnating, people are going to say oh, we're heading into a recession. If wage growth picks up all of a sudden, you get into that area where you could be in a wage price spiral, and then you have a bigger road ahead with the inflation narrative of the two, it's probably better to see weakness, because at least then you don't have to worry about. oh no, the Fed's gonna have to be even more aggressive. But it seems like right now you're just in a cycle where a lot of bad news needs to be priced in.

But let's talk earnings. So earnings season has mostly winded down the next earnings season where companies will be reporting Q2s are going to be in mid July through August, but for this week we still have some earnings reports ahead of us that you're going to want to know about Salesforce, Chargepoint, Hp, and Victoria's Secret. On Tuesday Chargepoint, I want to see them talk in detail about whether they are still able to move their charging station hardware and are seeing consistent growth and adoption on an overall trend. I'm also looking to see if they can elaborate on any benefits they will or have received in terms of the infrastructure bill.

In terms of Victoria's Secret, I'd like to know what her real secret is and it better not be too dirty if she is hiding lower than expected retail store sales. Expect the market to have a big impact. Wednesday the big story will of course again be Gme, but you also have Chewie C-3-a-i-u-i-path in Pure Storage. Thursday you have crowdstrike, Lululemon, Restoration Hardware, Akra, and Asana.

But in terms of Restoration Hardware, this is a very, very interesting case study in terms of what's going on with the market. With Rh, you get a peek into the spending habits of some of the wealthier consumers. Restoration Hardware has upscale furnishing and it was a huge, huge winner the last couple years, only to get obliterated as trends shifted and people didn't want to spend 500 000 for a small couch just because it says cloud on it. Okay, it's not actually 500 000, but you get the point right now.

The big question is, how are different income demographics adjusting to this overall crunching of financial conditions and each company is reporting a different take on how the consumer is doing based on their main demographic? I saw this post on Twitter a couple weeks ago that I enjoyed it said: Disney says the consumer is strong, Home Depot says the consumer is strong. Amazon says the consumer's strong, Visa says the consumer is strong, but Restoration Hardware says this is like, oh wait, and this is presumably written tongue-in-cheek But trend has started where a lot of the wealthier shoppers have not really cut back hugely on spending, but they started spending at cheaper and cheaper places. So look for some indications on the current trend when you get that Restoration Hardware report. Anyways, folks that capped off today's video, let me know what you think about the current stock market down below.

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