Hey Traders,
Today was a bloodbath in the markets.
Red candles everywhere. Stocks dropping left and right. Traders scrambling for cover like it was the end of the world.
But you know what? Not all stocks fell in line with the broad market.
It’s why I always say: there’s always a bull market somewhere.
Now, I know some folks might roll their eyes at this and think it’s just talk. But let me show you why it’s not…
See, last week, I shared three trending stocks with anyone who is signed up to receive text messages from me:
- ANET
- TPR
- SAP
I want to use these stocks to show you just how powerful trending stocks are.
Because while the broader markets got slammed today, two of those three stocks held their ground — and that says a lot about their strength.
Let’s break it all down.
ANET: When Gaps Can Be Warning Signs
I’ll start with the one that didn’t hold up: ANET.
On Friday, it hit a high of $133.57. But today, it dropped as low as $97.72 before settling at $100.34. That’s a 25% drop from its peak. Ouch.
Now, some folks might look at this and think, “Jack’s strategy doesn’t work.” But here’s the thing: no strategy wins 100% of the time.
What separates a good strategy from a bad one is how it stacks the odds in your favor over the long run.
And if we’re being honest, there were some warning signs with ANET:
Just a few days before Friday’s peak, it had gapped up over 3% in one day and was trading way too far away from its 20-day moving average.
That kind of overextension is like a runner sprinting too hard at the start of a marathon. Sure, it might keep going for a bit, but eventually, it’s going to run out of steam.
And while I didn’t expect a 25% crash, the gap and overextension were red flags.
TPR: Strong in the Storm
Next up, let’s talk about TPR.
This stock had a Friday high of $75.78 before dipping today to a low of $71.80 — just over a 5% drop at its worst. But by the end of the day, it closed at $72.45.
Here’s what’s important: even with that drop, TPR stayed well above its 20-day moving average of $69.33.
That’s a sign of strength. When a stock holds steady while the market is tanking, it’s showing you that investors believe in it.
And as I’ve always said, stocks that stay strong in a weak market are often the first to soar when the market recovers.
SAP: The Superstar
Finally, let’s look at SAP.
On Friday, it hit a high of $277.36. Today, it dipped to a low of $272.05 (just 1.9% down) before closing at $275.69 — barely over half a percent below Friday’s close.
Not only did SAP hold steady, but it also closed the day with a green candle. That’s downright amazing on a day when most stocks were seeing massive losses.
Just like TPR, SAP’s trendline tells the story. Its 20-day moving average sits at $260.87, far below its current price.
That’s exactly the kind of strength I’m looking for in trending stocks.
The Key Takeaways
Now, some of you might be wondering: “What’s the point of following these trends if ANET can crash like that?”
Here’s the deal: no one has a crystal ball. Not me, not you, not anyone.
The markets are unpredictable. But the goal isn’t to predict every move; it’s to stack the odds in your favor.
If you had placed long-term trades on these three stocks, you’d be sitting on two winners and one loser. I’ll take that any day of the week — especially considering today’s massive selloff.
But here’s the kicker: what if you had traded these using my favorite strategy, the 3-day credit spread?
The 3-Day Credit Spread Advantage
Let’s rewind to last week. Say you entered a 3 day spread on each of these stocks.
You would enter on Tuesday and it would have automatically closed itself on Friday.
You would have ended the week with three winners and you’d be sitting on the sidelines with cash in hand, completely avoided today’s mess.
That’s the beauty of short-term, high-probability setups like credit spreads. You’re in and out fast, limiting your exposure to surprises like the ones we saw today.
Final Thoughts
Today’s market drop was a clear example of why discipline matters in trading: Trends don’t guarantee perfection, but they do stack the odds in your favor.
TPR and SAP held strong, proving that there’s always a bull market somewhere. ANET stumbled, but that’s why we manage risk and diversify.
And if you’d traded these with the 3-day credit spread strategy, you’d be sitting pretty right now.
The lesson here is simple: stick to the plan, follow the trends, and keep stacking the odds in your favor.
As long as you’ve got the right stocks, days don’t need to scare you.
Trade well,
Jack Carter
P.S. If today’s market drop reminded you how quickly things can turn, you won’t want to miss the LIVE briefing I’m hosting with Nate Tucci tomorrow at 1 PM ET. He’ll show you how to stay ahead in this chaos — PLUS, he’s revealing his “two way” strategy that’s been cruising to an 83.3% win rate, even in markets like these. Reserve your spot here.
