Weekend Study Session – May 9, 2026

by MarketMentor

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Read the transcript HERE

Key Takeaways

  • Tops are Processes, Bottoms are Events: Most market peaks develop over time through a “markup-distribution-markdown” cycle. However, vertical moves in the semiconductor sector (like March 2000) can end in violent, event-driven collapses.

  • The 200-Day Deviation Metric: Historically, semiconductor rallies top when the index is 35% to 45% above its 200-day moving average. Currently, stocks like Intel are 195% above that line, signaling an extreme, high-risk environment.

  • The “Mandalorian” Market Phase: We are in a “lockout rally.” The more a market is hated by those in cash, the higher it goes as they are eventually forced to “capitulate” and buy in at the top.

  • Execution > Knowledge: Your past failures or missed opportunities have zero relevance on the current trade. Professionalism is defined by current execution and the ability to manage risk to the penny.

  • Self-Awareness as a Weapon: If your current trading style (e.g., buying breakouts) isn’t working, stop immediately. It is better to do nothing and “sit on your hands” like Jesse Livermore than to reinforce bad habits.

The “Mars” Rally—Managing the Vertical Move

The Gravity of 195%

We are witnessing a semiconductor run for the history books. Intel ($INTC) is currently trading nearly 200% above its 200-day moving average. In technical terms, that’s not just a trend—it’s a rocket launch. But as Dan Fitzpatrick warns, the steeper the trajectory, the more violent the eventual return to earth. We aren’t predicting the end, but we are certainly keeping our hands near the ejection seat handle.

The ” Beverly Hillbillies” Economy

There is a strange dynamic under the hood of the latest jobs report. Much of the “AI boom” is being driven by temporary construction. Thousands of families are moving to Texas, Virginia, and Ohio to build data centers, only to be “AMF’d” (adios, my friend) once the last server is plugged in. This infrastructure build-out is a massive spike, but it is technically a moving average that will eventually roll over.

Don’t Be a “Sold-Out Bull”

The hardest part of a market like this is the psychology. If you’re sitting in cash, you likely “hate” this market. If you’re long, you’re likely “white-knuckling” your mouse. Dan’s advice is simple: Trust the 8-day EMA. As long as the price stays above that line, the bulls are in control. If you sold too early, don’t “revenge trade” at the peak just to feel vindicated. The market doesn’t care about your feelings; it only cares about your stops.

Protecting the Floor

You cannot control how much money the market will give you, but you can control exactly how much it can take back. By managing your “R-multiples” and respecting your stops, you dictate your account’s destiny. Whether you are trading a “slingshot” pattern or a “volatility squeeze,” the goal remains the same: Manage the downside, and the upside will take care of itself.

Strategy Session

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