4/8/25 Recap

The SPY had a huge open and evenso did not even sniff the 8 ema which tells you just how oversold we were after the last 3 sessions. It isn’t often you bounce $40 on the SPY and can’t touch your 8 day average, I would chalk this up as a deadcat bounce. Tomorrow morning we were promised 50% more tariffs on China from President Trump and China vowed last night to fight to the end, those are not really encouraging words if you’re looking for the market to go up. Realistically unless China somehow folds in the next 24 hours, it seems they will see higher tariffs and I imagine based on last week by this friday we will see their countermove. We also have some infighting going on within the Trump camp where Elon Musk called Trump’s top trade advisor Peter Navarro a “moron” on Twitter. So it does not appear everyone is on the same page at this moment. I think today is a day to take off some risk into tomorrow morning and if Trump decides to walk back his comments then you miss a small move but if he implements 104% tariffs on China, I can’t imagine how we react positively but crazier things have happened.

It is tough to think this is a real bounce, it is just impossible because we could possibly have a massive down day tomorrow if we followthrough on tariffs, even look at now we’re well off today’s highs. The last 3 days the NQ was down 1000 points 3 days in a row at one point, that has never happened. A bounce is natural after such a drastic move, just wait 1-2 days before placing new trades is all I ask, just see what Trump does tomorrow morning. If he hits China with 50% and they come back with another 50%, I can promise you the market will not be happy at all and the likelihood of that happening seems quite high right now. Will we be higher in 6 months? Probably but you’re taking way too much risk adding when China is saying they are willing to fight to the end. I still refuse to see how we’re gaining leverage on other countries with our market in shambles, other countries are looking at us and wondering what happens if they don’t make a deal, does the US market just keep heading lower? That certainly isn’t a win for America.

Of course you have great names down 30-40% like MSFT,AMZN,AAPL,META sure those are probably fine as long term holds but you’re going to get some volatile moves with an elevated VIX and a trade war nowhere near its end. I think too many people are complacent with what is going on, we’ve bought the dip for a very long time, this is an upending of the entire global order that has been in place for a very long time, I don’t think 3 down days prices that in, it is just going to take time until we know how these companies earnings look on the other side of things. Again throw out everything you’ve known about all these companies you love, we are in a new world where we just do not know their forward margins and earnings. For the time being Ken Griffin said this is a 20 year dream and costs on the middle class will rise dramatically. That is just the reality of the situation and unless someone backs off soon, it will continue to be messy.

Recent Trades

DDOG - Datadog popped 4% today in this tech stock rally and these 97.5 short puts that were sold yesterday for 24+ are now 18.5. I would close these if you took them, that was a quick 20% and let’s regroup after tomorrow.

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