7/1/25 Recap

The SPY is barely down today, the larger move down was in the Nasdaq with it being down over 1% led by Tesla down 5% after the Trump/Musk feud took on a new chapter overnight. Overall nothing really worrisome, we’ve gone straight up for 2 months with very little consolidation. As I mentioned yesterday we are quite extended with the 21 ema down at 602 still almost 3% away. Markets get nutty for a bit, but rarely do they stay very extended from a key moving average like that. Overall nothing really to write home about just a rotation from tech today to some defensive names. That is a little bit of a yellow flag when you see names like PEP and MDLZ up 3% today, those are defensives and usually complete dogs to own, when they catch a bid its usually not good times ahead for the market but since no real technical damage has occurred I am just being cautious and watching what happens.

So I don’t really discuss the trades I flag, I just write up the ones I think are odd and whatever happens happens, but look at yesterday’s recap and this JMIA risk reversal that I flagged. Today JMIA was up 17% at one point on a takeover rumor, whether you put on this trade specifically or dabbled in shares, the point is these option flows are just a deeper look at how money is moving behind the scenes. JMIA has been a horrible stock for years, why did this player put this risk reversal on yesterday of all days? Is it possible this person was behind the takeover rumor? Could be, the markets a dirty game and the only way to see how big money is positioning is looking at these option flows. This JMIA risk reversal was up nearly 4x overnight, imagine if we had an SEC that actually looked into this stuff and asked questions like why this player randomly decided to sell 20,000 puts and buy 20,000 calls on JMIA hours before a buyout rumor spread. Just keep in mind, the odder the ticker and trade I flag, the higher likelihood something fishy is going on. I wish I had the ability to play in these garbage names but I cannot bring myself to do it.

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