The SOLBAT Trade

I've Found The New HOOD Trade, Plus A Look At The Tariff Tantrum

Deadlines are looming, and the paperwork is coming in. The US sent out tariff letters to 14 countries, including Japan and South Korea.

Nikkei futures caught some heat, and we’ll probably see some followthrough once the Asian markets open.

However, some perspective!

The Nikkei nosed over to new 52 week highs, with a little failed breakout. The market is still above its 20EMA and the damage has been minimal.

I don’t know if Tariffs are going to be “a thing” anymore. It’s a known-unknown, and the risk markets have been pricing in news since the lows in April.

If enough participants are hedged, then it’s tough to see any big downside moves as they cover their hedges which puts a floor in the market.

I want to see how the market will act as it heads into the AVWAP from the Iranian aistrike lows. If aggressive buyers show up, then that’s telling us the bid in the market is still strong. If it’s shown no respect and volume picks up, then we can start parsing through any new short term risk narratives in the market.

My base case is still reversion-rotation. US markets are running hot, and you can correct that through time instead of price. So while names like MSFT take a breather, other names under the surface can run.

The New AI Trade

It’s still early innings in the AI supercycle, but the bottleneck has shifted. Last year it was all about semiconductors and NVDA, but that came to a halt with the Deepseek launch.

Now, it’s about electrons. Who controls the power, controls the outcome of the AI arms race.

It’s why nuclear has been a hot trade, like in OKLO:

But it’s going to take time to get nuclear up and running, even if it’s of the “small, modular” variety.

It’s easier to roll out solar farms.

With AI power demand, solar can stand on its own without subsidies. The market is beginning to respond. Here’s a look at a reversal pattern setup in TAN:

Because solar is intermittent, you’ll need batteries. Most of these stocks are dead in the water as they were a busted EV trade but are starting to show signs of life again. Here’s QS, a former high flyer that’s up 100% on news:

Many of these stocks are stuck in dilution hell and can’t sustain a bid as they’re itching to dump shares onto the market.

Yet it’s early in this space.

The New Robin Hood

A top momentum flyer has been HOOD, and there’s a stock exhibiting the same “sticky” pattern.

When a stock gets “overbought,” owners should take their profits and late buyers get punished.

But sometimes it gets sticky, and that’s a signal.

Like what we are seeing in RKLB:

The stock is “overbought,” and sellers show up into any push above $37. We see that again today, but by lunch the stock has reclaimed $37 and finished at day highs.

Continued holds of $37 and we’re looking at a parabolic extension with potential into $50.