6/26/26 Recap

The SPY gapped down under the 50 day today and you can see right now it is rejecting it on the way back up. This is a downtrend, we knew that 3 days ago when we broke under the 21 ema. How long does this last? Nobody could tell you, in February we lost the 50 day for 1 session and then on March 1 we lost the 50 day and it took a month and a half to reclaim it. This is just a textbook downtrend with lower highs. When a key spot like this 50 day is lost, it is really your call what happens next. I would say if you’re concerned, you can sit in cash until we reclaim the 21 ema or you could just lighten up. If you’re someone who is using a ton of short term leverage you really only want to do that when you’re in an uptrend over the 21 day. You can never get caught up in a big move to the downside if you respect these simple rules. No market has ever crashed above the 21 ema, all those bad things happen below it. I myself have not added much this week, there are times where you don’t have to press things to the long side and for the time being this is one in my opinion. It could very well be short lived. I haven’t adjusted longer term trades I have on, but I have nothing expiring anytime soon.

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