10/14/25 Recap

The SPY had its second straight open below the 21 ema, went down and touched the 50 day and hammered there. When this happens, you have to just understand the situation and reduce your leverage and/or tech exposure which is why I sent that extra email friday afternoon confirming the 21 ema breakdown. Look at yesterday, the huge gap up was stuffed right at the 21 ema and today resumed lower. These periods of weakness happen and the reason tech is weak in them is because tech makes up the bulk of the SPY so when computers flip to sellers, tech gets sold harder, it is really that simple of an explanation. We’re trying to push back over the 21, let’s see where we close up today, that is most important.

Now how long does the weakness persist? I don’t have a crystal ball but you don’t want to press longs again until we reclaim an uptrend over the 21, could be tomorrow, could be 2 months from now, nobody knows but you don’t want to be in any weakness so you be patient when these uptrends breakdown. Ideally the market would hold the 50 day here like we’ve done so far since this all began in April and the VIX would collapse, but if it doesn’t then that 100 day just over 630 becomes a possibility. This doesn’t mean run out and close everything, it means anything you are in short term to the long side whether commons or calls, you probably do not want to be in that is say anything less than 8 week out trades as we are now in a bearish trend. Like I mentioned yesterday my best guess is some weakness here for a week or two until Trump most likely extends the deadline for a China deal again and then we can pretend these last 2 days with the nasty rhetoric between us and China can be a thing of the past. We’ve gone straight up for 6 months, a small period of weakness is not crazy, just know we’re in one and don’t overdo things with short term calls here and you will be fine.

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