2/27/26 Recap
The SPY once again is holding that 100 day. This has been our do or die level for all of February, every dip here to this point has been bought. We have alot happening right now, we had a hot PPI this morning, we had block firing almost half its staff yesterday in our first potential “AI” mass layoff, and then we have the looking Iran situation this weekend. I’m in the camp the Block firing had nothing to do with AI and more to do with Jack Dorsey being a bad manager, when Elon bought Twitter from him, he fired 80% of the employees and the company functioned just fine. If this really were a watershed moment I think you would have seen more mass layoffs from the large corporations. As for Iran, I don’t know what happens, I do think if we happen to strike it will be just us striking nuclear sites but until the market gets more clarity on Iran and the potential job losses ahead, the market does what it always does, panic first.
On a longer term look we are closing up the month today and the SPY monthly is still well over the 8 month, this isn’t a bearish setup, yet. It very well could turn into one but until we lose that 8 month average, this is just a normal uptrend and you could even say this is a bull flag into the 8 month if you’re objective.
Tech stocks continue to be our headwind. Yesterday afternoon when Block announced the layoffs, without even questioning the how or why, Microsoft instantly dumped 2% as people began to price in mass layoffs and how that would impact MSFT revenues. This stuff is getting silly right now and its fine it just shows how on edge we are where Citrini smokes markets monday with his AI piece and then Block spooks investors again. For now the uncertainty and elevated VIX are going to be a tough thing for tech stocks to overcome, the QQQ remains in a bear flag and the 200 day keeps creeping up to nearly 590 now. I’d imagine if we strike Iran over the weekend, we break this bear flag down and maybe finally get that accompanying flush that has eluded bears for a month now. On the flipside if we strike some last minute peace deal with Iran, we could gap up enormously and once again try to clear all these moving averages overhead. It really is a binary thing right now and that’s why the VIX is bid.
On a longer term look, its hard to be bearish yet when the QQQ is also just flagging into the 8 month. Could it be forming a top? Sure, but until it loses that 8 month, you can’t just make a call like that because it is just as likely to find its footing here and rise up. We are weak, but we’re not bearish yet, we’re close. If you’re short here you’re basically hoping the uptrend is broken, and that’s possible, I just would rather see confirmation of a broken uptrend before getting bearish.
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