8/20/25 Recap

The SPY is clinging onto the 21 ema right now after breaking down below it and recovering before losing it again. It is early in the session at 10:58 right now as I write this recap. 635.45 is the number to watch today on the SPY, if we close up below that later you’re going to want to de-risk your short term positions. I get it, 2 weeks ago we closed below the 21 ema for 1 session and bounced right back. The reality is this, 9 times out of 10 we close below the 21 ema nothing happens, but that 1 time markets really collapse, having discipline and closing up short term trades and reducing leverage below that level will save you.

Do I think anything is wrong with the market here? Not really earnings have been fine but we’ve gone straight up for 4-5 months now, a little pullback is normal. If we lose that 21, the 50 day just over 620 becomes our next level of interest. Jackson Hole these next few days should give us some clarity but one thing is certain, the momentum names that led us recently have mostly all gotten hit hard the last few sessions. One thing that stands out to me is the VIX is not even 20, this isn’t some sharp selloff, just seems like normal selling before a potentially major event. Crypto green today and leading the charge today is also not something you see in a risk off environment. So keep all that in mind as the session goes on.

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