9/3/25 Recap

The SPY gapped up overnight with the monster move from Google lifting it and also bringing Apple along for the ride after the ruling yesterday. While the bulls are rejoicing today, the market still looks weak under the surface with us rejecting the underside of the 8 ema so far right now. MSFT is red while MSFT,META, and AMZN are barely green. This is telling you other than GOOG/AAPL most of the megacaps are not participating today and continuing the weakness we saw yesterday. Focus on the close because nothing else matters. You want to see these key moving averages reclaimed.

The QQQ gapped under the 50 day yesterday for the first time in months and if Google didn’t save it late in the session who knows where it would’ve been today but this gap up today is stalling out right beneath the 21 ema so the bulls are not lifting it into blue skies for the moment. Monitor this because technically, this is still a sell until it closes over the 21.

I know it feels like anyone being cautious or prudent respecting levels like a real trader would looks silly because every breakdown seems like it gets bought instantly but like I’ve said many times, all it takes is 1 breakdown to go really badly, like the February one this year and you’d realize that risk management is a lost art. For me, as someone who uses a ton of leverage, I have to be cautious when things look iffy because if I don’t, then I can get caught up in massive losses to the downside quickly. Drawdowns can and will still happen so the only way to avoid them is to respect moving averages and be ontop of where the market is flashing warning signs. Yes 95% of technical breakdowns are short lived, the last 2 times the 21 ema broke on the SPY it was a 1 day long scare, but I’d rather respect my rules and miss 1 day of being long tech stocks than get caught up in a multi month downtrend.

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