8/1/25 Recap

The SPY opened up below the 21 ema, I’ve been warning you for days to lighten up and you saw me unload most of my leverage this week, this move shouldn’t shock you. We’ve been in an uptrend since mid April and as of today, assuming we don’t save it into the close, the uptrend is over. 626.59 is the level we have to recover today otherwise, that’s it, that means this isn’t time to dip buy or be a hero or anything. It’s time to move aside with short term trades and keep your long term trades. In the short term, a move under the 21 ema signals a shift in trend and it means you need to start selling covered calls and moving to cash until we reclaim that moving average if we close here. What works now is defensive stuff look at COST,WMT, PM, all green today and what doesn’t work now is tech. Can you short things now? I myself do not short things because there’s always some fake pump higher, but if you wanted to be a bear, this is when you’d do it. I think it is easier to step aside and just wait. Simple enough and now the next support would be that yellow line, the 50 day, below. This could all be a moot point and we reclaim the 21 by day’s end but it is very notable that this was our first open below it in 3 months.

I’m very direct with you and I had one day this week where I didn’t post trade ideas because I said let’s wait and see what happens after FOMC and the big earnings. That’s all over and now we have a potentially major trend shift starting to unfold, don’t overcomplicate things, yes the megacaps are fine, yes they will likely be higher 12 months from now, but this is where the computers running the markets turn into sellers. We’ve all made a ton of money this year, and like I said yesterday, you don’t have to be max long every single day. The market is a simple game, my rule is you press things in uptrends over the 21 ema and you lighten up in downtrends below that, if you do that, you won’t ever get decimated. You could sort of see this coming yesterday in the database someone bought 10,000 weekly NVDA puts at 175 with the stock over 180 and the way NVDA was gapping up everyday that seemed like lighting money on fire but sure enough that player was right on the money and NVDA flushed hard today.

My Open Book

Very good day for me I’m actually green while the NQ is down 400! I feel really good about my positioning right now. When I took all that leverage off 2 days ago and bought that huge TLT position I won’t lie I was sick to my stomach watching the NQ open up 300 yesterday, but here we are with the market losing the 21 ema and if I didn’t remove all that leverage I would have been smashed today. That’s why you can’t let it mentally get to you when you make a decision, you have to do what’s best for you and not worry about missing moves because you’re absolutely going to miss some moves. As I said at the time I was more than content being up over 50% this year and if I was wrong, so be it, but fortunately my intuition was right and now I’m in a really good spot to add names lower here in a few days/weeks.