Daily Trading Recap - 2/5/26
Meltdown in the markets!
TLDR
Markets in panic mode with broad selling across stocks and crypto.
Traded HOOD to express the bounce thesis but didn’t work.
Took a quick short in AIM and covered into a fast wash.
Ideally we get full on capitulation gap downs tomorrow. Main watches: IBIT SBIT HOOD IGV
Trades I Took
With crypto and risk assets getting hit hard, I was looking for a potential bounce, and HOOD had the cleanest chart for that idea imo. Ideally, you get one last flush at the open, but we got the opposite. HOOD bounced right away, so I took a couple of small starter longs in case it just went without retesting the lows. That didn’t work, and it broke down pretty quickly, which was actually what I wanted to see.
Once the selling slowed, I got long again. It ground higher, but the volume you’d normally want just wasn’t there. I scaled out and recycled the position a few times, locked in gains, and then trailed out when it rolled back over. HOOD got very heavy into the close, which makes it an even better setup heading into tomorrow.
Typical small-cap short setup. I got short after the failed morning push and covered after a quick -15% drop. Not much else to say about it.
Took a small short position on the morning bounce and holding overnight. Mining stock that is selling off on the precious metals weakness.
Swings and Other Notable Mentions
We are clearly in a risk off environment. No plan on actively opening any traditional breakout swings. Focus will be on getting long the extremely oversold names.
Now is when you want to observe the tickers on your broad watchlist for relative strength. These pullbacks are healthy and a much needed reset. They flush out the crap so the real winners can continue to advance during the next stage.
Takeaways
This was a sit-on-your-hands kind of day, and I’m happy with how I handled it. I stayed selective, took what the market gave me, and didn’t force action when everything started to stall out. There are a lot of things setting up for tomorrow, especially with software still weak and crypto in full panic mode. If we get more downside in the morning, I’ll be stalking bounces.
Smart timing on HYMC shorting metals weakness. I ran a similiar play last week and miner vol really does amplify teh underlying metals moves. The correlation breaks down way faster than most retail expects during broad risk-off. Overnight hold could work if we gap dwon, but watching gold here too.