8/5/25 Recap

The SPY has had a wild 3 days. We closed below the 21 ema for the first time in 68 sessions on friday which should have been a trend shift and instantly followed it with a massive up day yesterday sending us back over the 8 ema which was followed up with today’s break of the 8 ema and retest of the 21. What a chaotic series of moves. Vix futures are up over 5% and this market feels like its teetering on an edge. With that said, today should give alot more clarity on direction with AMD reporting. That will move all the semis and we either will go higher or we’re breaking below the 21 ema again. I myself remain very cautious and not involved in any tech stocks ex my short AMD puts in January way lower. The market has been on easy mode for months, now things are getting tough and this type of environment chops up both call and put buyers. This is a good environment though for put sellers because the vix is a tad elevated and if we chop around sideways/down for a while they can still profit. A good piece of advice for this tape would be to focus on PEAD names, I’ve discussed this in the past but PEAD stands for Post Earnings Announcement Drift. We’re talking names like RDDT last week where it had a strong print and reaction and now should be strong for the quarter ahead. Names like that tend to be the least weak in weakness and the strongest if we’re in a strong tape, either way they lead. Selling puts lower into names with strength like that can really help you outperform in times of market uncertainty.

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