5/5/26 Recap

The SPY continues to just drift over the 8 ema, there isn’t much to say, I’ve been telling you for days on end that things are fine and we’re just on cruise control right now until that 8 ema is lost. When that happens the next stop is that 21 ema below but for now, enjoy it, this is easy mode and its funny to watch because I know so many have been so bearish for weeks but this is the reality of the market, charts tell a story, you can either choose to listen to what the charts are showing or you can fight gravity and try to be a hero. Again the how/why really doesn’t matter much at all, the price action is the truth. This has been a beautiful move up.

One thing I wanted to mention here was yesterday when I joked about that biotech risk reversal I flagged, I forgot the ticker but it was one of the 5 I highlighted in yesterday’s recap. Those to me are the gutsiest trades I find and here is why. Go back to the March 10 recap here and see CYTK, it was 62.xx then and it is up 20% today to just under $80. This risk reversal then is up a fortune right now and here is the thing I try to hammer home, when you do a trade like this, you pretty much have to be right or you’re dead. You can’t sell puts on a biotech because those names can just fall 80 or 90%. These aren’t tech stocks where a bad day is 15%, so when you see someone selling puts, into data, you better pay attention because as awful as biotech stocks are, these people win way more than they lose. If you’re scared of the bottom falling out you can always use put spreads to limit your max loss.

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