11/21/25 Recap

The SPY bounced off the 100 day right now, the bearish crossover I’ve discussed all week played out right after the 8 ema crossed down through the 21 for the first time in months. This is why I discuss the 21 ema so much, it is your barometer of short term health. Look at that arrow below and the day we lost the 21 ema, if you just respected that and went to cash waiting for a move back above the 21 ema, you missed the following 6 sessions of pain. The week before we lost it and in 1 day recovered, that happens alot, but you never have to be long markets under there, if you do that’s just a personal choice you’re making. These moves down are never surprises, the problem is if you look at this entire year, we lost the 21 ema on the SPY on a close 8 times, only 3 of those times did it lead to a prolonged move down. The problem is the complacency everyone has where they think it is always going to bounce right away.

I get these emails that ask why didn’t everything off myself and I’ve said countless times I have a huge capital gain this year so my plan was to press it into year end and if it didn’t work, I would simply roll my short puts out into next year or 2027 and harvest a big loss for this year while extending the trades for a credit. The short term losses really aren’t that big a deal to me, if I’m short puts on something like WYNN at 110 for this December and I feel like they may get assigned, all I would do is just roll them to say January 2027 for a huge credit of $5 ontop today and take that loss against my gains this year. So I’ve had a plan in mind this whole time and that’s why I have not really worried much about the move down.

Any time you enter any trade you’ve got to have your

plan a) what happens if it goes up?

plan b) what happens if it goes down?

If a trade goes against you, you don’t have to take a loss ever, unless you’re in short term calls, which I never am. If you’re in commons, you can just keep selling covered calls until the trade is called away. For instance, take the TSLA shares I bought this week under 400, that name popped to 430 yesterday and now its at 385 so what did I do? I rolled my short calls down to 405 for next week and hopefully I can get out with a small profit. If I can’t, then I lowered my basis and I’ll do it again the following week. You never have to take a loss unless you want to with commons, you can keep selling covered calls until you get called away while reducing your basis every single week.

What if you sell puts and the trade goes against you? You simply roll out the short puts further and lower for a credit if you want. If you go into a trade by selling puts at a key spot on the chart, then when it is time to roll out lower you should be in an even better position assuming the fundamental story hasn’t changed. Take TSLA above, I sold puts yesterday at 400 for next week, today it fell to 385, so what did I do? I turned around and rolled those short puts to 380 in December for a small credit. Now if the stock bounces, I still make what I was originally going to make and some more, but if I’m actually assigned shares it is at a lower entry. If December comes and it is lower, I can roll out to February, April, January 2027, whatever, you have options. So know what you’re getting yourself into when you’re playing with these. I don’t want to sound like Cathie Wood, but a little down time is ok if you harvest some losses in the interim. Stocks go up 90% of the time, the 10% of the time they don’t, use it to your advantage. Just have your plan b in mind and you can harvest some losses short term and position yourself for a bigger gain down the road.

Overall, just be realistic, stocks went straight up for 7 months. So many of you email me in this complete panic that we’re down 5% over a couple weeks, you cannot be serious thinking stocks only go in 1 direction, even though we pretty much do over time. You really have to be more composed, if you’re “trading” then why are you ignoring the loss of key moving averages like the 21 over a week ago? I explained why I ignored it above, if I closed everything today and rode cash into year end I’d still have over $4m in capital gains, so for me pressing things and harvesting losses short term is a win, you might have different goals than I do so don’t approach markets like I do.

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