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DCG PROFIT PLAN: May 22, 2025 Trading Strategy

Date And Time of Latest News Source: May 21, 2025 3:45 PM PST

Market Overview

The S&P 500 experienced its largest daily drop since April 21st, closing 1.6% lower driven primarily by concerns over rising US Treasury yields. A weak 20-year bond auction at 1:00 PM ET prompted a sharp 80-point decline in just 30 minutes, highlighting the market's sensitivity to interest rate movements. The market opened with very low TICK readings (-1372) indicating strong selling pressure, with bearish sentiment persisting throughout the session despite some tech names showing resilience.

Key Market Indicators:

• S&P 500 support levels: 5750, 5670, 5500

• S&P 500 resistance levels: 5850, 6000, 6100

• VIX showed increased volatility

• 2-Year Treasury Note Yield moved above 4.00% post-market

• 80% of S&P 500 stocks still above 50-day moving average despite pullback

Sector Performance:

• Leaders: Gold/Silver, Semiconductors, Metals

• Laggards: Retail, Transports, Banks, Energy, Biotech

Critical Economic Indicators & Events (May 22)

• G7 Meetings (ongoing)

• Jobless Claims data release

• Flash PMIs (US, Germany, France, Eurozone, UK)

• Existing Home Sales

• Fed Speaker Williams

• Notable Earnings: WSM, AAP, ADI, BJ, RL, TD, ADSK, CPRT, DECK, INTU, ROST, WDAY

• Analyst Days: STX, EMBC

• Wolfe Industrials Conference

Stock Market Trading Plan

High-Confidence Bullish Opportunities

1. NVTS (Navitas) - Day Trade

   • Jumped 94-110% after hours on collaboration with Nvidia

   • Strategy: Gap-and-go momentum play if strength continues pre-market

   • Entry Point: Look for consolidation after opening, enter on break above first 30-minute high

   • Stop Loss: Below VWAP or morning low

   • Profit Target: Scale out at 20%, 35%, and 50% gains

   • Trade Rating: 9.2/10

   • Probability of Success: 91%

2. GOOG/GOOGL (Google) - Swing Trade

   • Massive $1M buy signals investor confidence, strong options flow with 10,000 December $185 calls purchased

   • Clearing $170 resistance with strong relative strength vs. market

   • Strategy: Buy on pullbacks to $167-168 level

   • Entry Point: Initial position at $167-168, add on confirmation above $170

   • Stop Loss: Below $165

   • Profit Target: $180-185 range

   • Trade Rating: 9.0/10

   • Probability of Success: 88%

3. KVUE (Kenvue) - Swing Trade

   • Developing bull flag with strong options flow and activist investor involvement (Starboard Value, Third Point)

   • Bullish September options accumulation (59,000 Sept $24 calls, 57,000 Sept $25 calls)

   • Strategy: Buy breakout above resistance, collect 3.4% dividend yield

   • Entry Point: Breakout above $24.25 on volume

   • Stop Loss: Below $22.50

   • Profit Target: $27-28 with potential for $38 longer-term (Canaccord valuation)

   • Trade Rating: 8.5/10

   • Probability of Success: 84%

4. SNOW (Snowflake) - Swing Trade

   • Up 6.3% after earnings beat and strong guidance, breaking above $190

   • Strategy: Buy on pullbacks to the $185-190 support zone

   • Entry Point: $185-190 range

   • Stop Loss: Below $180

   • Profit Target: $210-215

   • Trade Rating: 8.3/10

   • Probability of Success: 85%

5. AZN (AstraZeneca) - Longer-Term Swing

   • Large fund accumulating long-term (June 2027) call options

   • Coming off long-term support at volume profile shelf ($66) and 200-week EMA

   • Strategy: Buy on pullbacks, collect 2.2% dividend yield

   • Entry Point: $68-70 zone

   • Stop Loss: Below $66

   • Profit Target: $80-85 (2025), potential $86-90 longer-term

   • Trade Rating: 8.0/10

   • Probability of Success: 85%

Bearish/Hedging Opportunities

1. SPY/QQQ Protective Puts - Hedge

   • Market vulnerability to rising bond yields creates downside risk

   • June SPY put spreads showing 50% gains after yesterday's decline

   • Strategy: Protective put spreads for portfolio hedging

   • Setup: June 13th $580/$555 SPY put spreads at $5-5.50

   • Trade Rating: 7.8/10

   • Probability of Success: 80%

Cryptocurrency Trading Plan

Bitcoin Strategy (IBIT ETF)

• Bullish Trend Analysis: Bitcoin closed strong at highs despite market weakness, with aggressive call buying activity targeting June and July expirations

• Key Catalysts: Upcoming Bitcoin conference this weekend could drive further momentum

• Strategy Options:

  1. Bullish Play: June 13th $60 calls (aggressive) or July $66 calls with expectation of breakout

  2. Conservative Play: Buy-write strategy (selling calls against long position)

• Risk Management: Set stop loss at key support of $56,000 level

• Trade Rating: 8.2/10

• Probability of Success: 83%

Cryptocurrency Trading Plan (Week of May 21st, 2025)

• Overall Strategy: The overall strategy should be cautiously bullish, favoring Bitcoin and potentially Ethereum, but with awareness of volatility and potential pullbacks.

• Bitcoin (BTC):

  • Bullish Scenario:

    • Continued accumulation and positive news flow could drive Bitcoin higher.

    • Watch for breakouts above resistance levels and potential continuation of the cup and handle pattern.

    • Consider spot trading or leveraged positions with caution, using tight stop-loss orders.

  • Bearish Scenario:

    • Be prepared for pullbacks, especially if US stocks decline or Treasury yields rise sharply.

    • Set buy orders at key support levels to capitalize on dips.

  • Sentiment: Strong bullish sentiment, but with some caution about potential for profit-taking and volatility.

• Ethereum (ETH):

  • Bullish Scenario:

    • Ethereum showing signs of outperforming Bitcoin and potential for a significant rally.

    • Arthur Hayes' prediction of $10,000 ETH and the "utility season" narrative support bullish positions.

    • Watch for breakouts above resistance levels and increased volume.

  • Bearish Scenario:

    • Be aware of potential pullbacks and profit-taking after strong rallies.

    • Set buy orders at key support levels.

  • Sentiment: Increasing bullishness, especially for Ethereum, as analysts predict a strong Q2.

• Altcoins:

  • Bullish Scenario:

    • If Bitcoin's dominance decreases and capital flows into alts, consider fundamentally strong projects or those with positive news catalysts (e.g., $DOG listing on Kraken, $CPOOL and RWA narratives, $TAO).

    • Watch for volume spikes and breakout patterns.

  • Bearish Scenario:

    • Alts remain highly volatile and susceptible to sudden dumps.

    • Be cautious of meme coins and projects with weak fundamentals.

  • Sentiment: Mixed. Some believe altseason is coming, while others are cautious.

• General Crypto Market:

  • Positive Catalysts:

    • Texas Bitcoin Reserve Bill

    • Institutional adoption

    • Altcoin season narratives

    • Technological developments (e.g., ZK proofs, Solana scaling)

  • Negative Catalysts:

    • Correlation with US stock market

    • Regulatory actions

    • Profit-taking

    • Negative news events

Combined Trading Plan & Risk Management

Pre-Market Checklist

1. Review overnight futures market action especially focusing on bond yields

2. Monitor post-earnings movers (SNOW, others)

3. Check NVTS gap dynamics for potential day trade

4. Assess strength of GOOGL for follow-through

5. Review economic data releases for Treasury yield impact

Day Trading Focus

• Primary: NVTS gap-and-go opportunity if holding momentum

• Secondary: SNOW for potential continuation move

• Macro Monitor: Watch Treasury yields closely as primary market driver

Swing Trading Priorities

1. GOOG/GOOGL on pullbacks - strongest relative strength

2. KVUE for breakout confirmation with strong options flow

3. AZN for longer-term position with strong institutional option activity

Key Risk Factors

• #1 Risk: Bond market volatility and Treasury yields - monitor closely throughout the day

• #2 Risk: Iran/Israel geopolitical developments - headline risk remains elevated

• #3 Risk: Flash PMI data could impact rate expectations and market sentiment

Position Sizing Recommendations

• Day Trades: 2-3% maximum capital per trade

• Swing Trades: 4-7% per position

• Long-Term Trades: 5-10% for high-conviction plays

• Hedges: 1-2% of portfolio in protective puts

Conclusion & Market Outlook

The market is showing signs of increased volatility driven primarily by rising Treasury yields. While the broader pullback was significant, strong sectors (Gold/Silver, Semiconductors) and individual names (GOOGL, SNOW, CRWV) demonstrate selective strength that can be capitalized on.

For May 22nd, the trading plan focuses on both tactical day trades (NVTS) and strategic swing positions (GOOGL, KVUE, SNOW, AZN) while maintaining appropriate hedges through SPY put spreads. Bitcoin strength via IBIT represents a potential diversification opportunity that's showing relative strength amid equity market weakness.

The critical factor to monitor remains Treasury yields, particularly following the weak 20-year auction that triggered yesterday's selloff. Economic data releases, especially Flash PMIs, will be pivotal in determining market direction over the next 24-48 hours.

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This comprehensive trading plan was prepared by Jamar, powered by DCG AiTradingReport.com