12/1/25 Recap

The SPY gapped down big overnight and has reversed alot of it, but more notable is we are still forming another lower high. Look at Friday’s candle, it never took out the high from mid November. Until it does that, this is just a continuation of a downtrend. Tonight we have Powell speaking at 8 pm EST, so let’s see what comes of that. Overall we are in a short term uptrend here, the 8 ema crossed up through the 21 ema but we’re forming a lower high for the moment in a longer term downtrend, so that uncertainty is why I’m exercising caution myself after such a great year and moving aside.

So back to my weekend post about not liking the monthly candle, I got alot of emails and I want to clarify a few things. Alot of you said the recent candle looks like the April candle which ended up in a big move higher. That April candle, as you can see below, was a hammer off lows on massive volume, that was a washout candle. This candle is a hanging man because it occurred at highs, not lows. While there isn’t much historically to go off except the few examples I noted, that is more because stocks for the most part go up the overwhelming majority of the time, so why would there be a ton of examples of a bearish reversal on a monthly timeframe? Those would be rare. Again remember, candles are simply a visualization of the buying and selling occurring in the market, they’re important in understanding what is unfolding and you can read more about the hanging man candle at this link here.

Does it have to play out bearishly? No, but as I said, I’m up enough this year that I don’t have to be involved at all into the last 3 weeks to make my year so I’m trying to be a little cautious. I’m not opposed to using a ton of margin, but you have to be clear on the market direction being in an uptrend, it’s fine then, but if you’re iffy about it, just take a break and let it play out.

My Open Book

Trades I Made Today