2/20/25 Recap

The SPY is clinging onto that 8 ema for dear life today. We’ve been flat so long that the 50 day is just over 1% away, any sharp move down and we can have some serious technical damage with the 100 day sloping up and less than 3% away. This morning we had a an earnings report from Walmart that spooked alot of people with a big miss on EPS and very cautious guide. That now makes the 2 largest retailers in the country, Walmart and Amazon, warning about consumers. Something to keep an eye on as the year progresses.

Recent Trades

BABA - Last August I wrote up Alibaba in a weekend best idea post where I laid out 3 potential long term trades on the name while it was $82 here. This morning BABA was over $143 at one point. These weekend best idea posts are just longer term trades you should be looking at. Look at the super aggressive trade at the bottom, that risk reversal would have 22 months to go right now and be up a fortune as those December 2026 150 calls have gone from 4.60 to 29+ right now. Yes BABA was a dog for a long time but when you place these trades for a credit, you’re afforded the luxury of sitting and waiting.

My Open Book

I enjoy days like this because although I am using a ton of leverage via the short puts I’m employing, the massive TLT position I have has completely buoyed me. I’m barely down $10,000 on a huge book, being down .14% when the NQ is down .75% and small caps near 1.2% is a major win for me. I’m sure there’s growth investors with $30,000 books down more than me today. The issue with leverage is if you use it, you have to know what you’re doing to keep from blowing up. I explained my thesis over the last few weeks. I’m short tons of puts because I like these names, just lower, I don’t like the economic data coming out so I’m using my cash for TLT and hopeful for rate cuts AND I’m selling covered calls on that TLT for weekly income. It sounds complex, less so than it really is, but if my thesis plays out I could make a fortune from here even as stocks dip because all these short puts are materially lower and TLT would rise. Will it play out? We shall see but I’m feeling very good about my positioning as I see the warning signs companies like Walmart put out today.