10/27/25 Recap

The SPY broke out to new highs on the announced deal with China over the weekend. We never broke the 50 day recently, we reclaimed the 8 day last week and going into the weekend, we were at highs, caution was always warranted because you never know how these things go but it’s not like we were at lows and breaking down going into this. I always hate so many big gaps below as they tend to fill but focus on selling puts lower into the gaps and you will be fine.

I can’t really take this “deal” seriously because it is like all the other times we’ve claimed a breakthrough with China and it was really nothing. China has made it pretty clear they’re not going to give in to our actual demands and we make these surface level deals that Don can claim as big wins to the masses. I would say this tweet sums up the whole deal yesterday and I’ll discuss it more in my positioning below. China processes over 90% of the rare earths, for obvious reasons like environmental concerns, we don’t want to do that here, so we are in a pickle where we need these rare earths badly and don’t actually want it done here so we’re just heavily reliant on China and they know that and that is why they never really give in. We’re crushing them on exports with tariffs and they’re holding rare earths over our head. We are not on good terms no matter how it appears. China is trying to replace our consumer demand and we’re trying to replace their rare earths as fast as possible.

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