Short IWM, our number one pick of the day, delivered, and hit our $275.50 target, swing SOC ripped 5.2%, and top pick PLTR added to our gains. Markets bounced back in the afternoon, but our playbook and top picks allowed for significant outperformance in an overall blood red tape.
_{*Our exclusive Discord Edition is delivered to Discord members before 7:00 AM ET every trading day.}

_{*This newsletter does not constitute investment advice. Past performance is not indicative of future results. StoryTrading contributors may buy, sell, or liquidate positions discussed at any time without notice. See storytrading.com/disclaimer for important disclosures. Our exclusive Discord Edition is delivered to Discord members before 7:00 AM ET every trading day.}

After correctly calling a Red Alert day yesterday, we’re back to being more constructive today, especially on QQQ and big-cap AI.

A misleading Financial Times story on OpenAI triggered a sharp sell-off across the AI trade. While many names rebounded following clarification, most remain below Wednesday’s close, including $NVDA, $ORCL, $AAOI, and $MU.

However, this is not a risk-free green day. As we warned yesterday, and the reason for our Red Alert, rising rates began weighing not just on IWM but also on QQQ.

There is potential for a reprieve today following a strong bounce in TLT and IWM’s sharp rebound off its 200 DMA, helped by President Trump touting progress in Iran negotiations and signaling no strikes before the midterm elections. However, positive Iran headlines have repeatedly been faded, and TLT is already back in the red this morning.

We see an opportunity to buy the dip in big-cap AI, but the risks from rates and geopolitics remain. As such, we are upgrading to Yellow Alert rather than Green and will continue hedging our longs with a short in IWM.

Bottom line: We’re buyers of the dip in big-cap AI today, but remain cautious on the broader market and will maintain our IWM short as a hedge.

Today’s Signal: 🟡

Get access to the complete Morning Note, featuring our macro outlook, Trump World developments, proximal catalysts, and high-conviction trade ideas before the opening bell.

Start your 7-Day Free Trial today and experience the full Morning Note before making any commitment.

👇 Click below to unlock your free access.👇