8/29 Recap

The market looks like its on a launch pad right now, the SPY looks like a massive inverse head and shoulders that wants higher, we’re over all the moving averages, and flagging at the 8 ema. It could be a headfake always, but this is a bullish setup and has been ever since we got back over the 21 ema. There is nothing else to add here, stocks look good, and its very healthy that the other 493 stocks have finally decided to do something because having 7 stocks carry the market wasn’t really sustainable.

Let’s talk about SMCI, below, and my 21 ema rule, note the yellow arrow below, that was the day SMCI lost the 21 ema, look what has happened to it since. This is exactly why I have that rule in place, this isn’t voodoo, it’s truth, price action is truth. When a name falls below the 21 ema, it simply isn’t wanted, the why is irrelevant. I know some will say well we didn’t know the bad news SMCI had was coming, I would argue that the big money that was selling all along the way before that, did in fact know. As you’ll see below, it NEVER reclaimed the 21 ema(light blue) after it broke it. So my rule remains, never hold a name below the 21 ema, unless its something you’re confident in long term, but if you do, you better prepared for weakness as long as it is under there. This is truly the single most important thing you will ever take from me in terms of how to avoid weakness.

Recent Trades

AFRM - I highlighted this one twice in the last week here on 8/22 and here on 8/26. It is up 33% today. They had these massive risk reversals below into the print and the put selling before earnings was a definite sign of confidence. Those June 2025 $50 calls are up nearly 200% and were way out of the money leaps.Really impressive move.

Trends

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Today’s Unusual Options Flow

Here is today’s link to the database, as always it will expire tomorrow at the open, the rest of today’s trades will be added by this evening. Be sure to check the link below to get the rest of today’s trades.