Second post today but the close warrants it. We closed today with a clear change of trend, we lost the 8 and 21 ema while nearly tagging the 50 day. We are losing the 50 day afterhours as I write this because Trump dropped a second bomb on Truth Social after the close of the market. We haven’t been below the 50 day since April 30th. Did you read what I wrote in thursday’s recap? We got that elevator down move the next day, you could almost sense it coming in the market. There was complacency everywhere, people with the worst names ripping 30% in a week posting screenshots of how they were savants for being in a company with 0 revenue, I mean that sort of piggishness is the ultimate gluttony in markets.
So now we look at longer timeframes and we closed below the 8 week for the first time since late April as well. By all means, the market is telling you to get out. It is flat out saying you’re probably up enough this year, just close up everything and move aside for a few days/weeks/whatever timeframe until it recovers some of these moving averages and if you’re up enough this year and you’re happy, by all means do it. The market gives you ample time to not partake in a huge move down. If you exit now, should one occur, you won’t be involved that’s the beauty of respecting moving averages.
So why am I not closing up everything? Here is where my book is my book and it shouldn’t be your book. Even after yesterday I’m still up something like 80% on the year and I am going to owe a fortune in taxes next year so my thinking is, I’m pressing things all the way into year end, if I give alot back, so be it. I look at the positions I have open and think about where things are. As mostly a premium seller myself, I know if I can get to say 3 weeks before expiry with everything ok, the theta decay will have smoked my short puts, so we are talking 33 sessions until December 1 so that’s really my target, not opex. When I look at my book, yes on a day like yesterday with the VIX elevated, your short puts implode, but do I believe NVDA is going to 150 in the next 33 sessions, no I don’t, so I don’t care. I do care about AMD and AMZN, those are the 2 riskiest trades I have on, but again I sold my AMZN puts for 7.18 meaning I don’t lose money until 210 -7.18 which is 202.82 and with AMD I sold puts at 190 for 7.32 meaning I don’t lose money until 182.68. Do I see either of those levels coming if the market settles down? No not at all.
Yesterday was exactly like April, Trump created chaos with tariff talk and shocked markets. The panic will probably last a few more sessions, but for me personally, I’m comfortable with my holdings and 33 sessions to my target. You may have different targets and different objectives but I’ve said for weeks that December expiry is my target and I’m sticking to it. So please don’t look at what I’m doing and think of it being meaningful to your book. I don’t even care about the day to swings in my book, I could be down everyday next week and I wouldn’t care. Imagine if the market is down another 5% this year by Christmas, my short puts could all expire worthless and I profit alot while your long calls get killed. The same move could have different effects even though both of us are positioned bullish. I am a premium seller, my approach can work in up,down or sideways markets, if you’re a call buyer you need a strong uptrend which right now is not happening as we are completely broken down.
So please take this time to think about what your objectives are, my mantra with markets is simple, I believe we go up 90% of the time, but the 10% of the time we don’t go up is when people are overleveraged and get hurt so bad they quit or sell at the wrong time. The market told you the minute it lost the 21 yesterday it was time to reduce your risk, the question is, did you listen? If you didn’t listen, unless your answer is similar to mine, ask yourself why? For me as it sits right now I need these names below these levels in the next 33 sessions to be actually losing money, not short term on paper, but actually losing money, and they’re nowhere close as of now so I’m just not concerned.
AMZN - 202.82
AMD - 182.68
CRWV - 82.63
INTC - 31.79, 32, & 32.35
NVDA -147.05
UUUU - 12.63
IBIT - 57.29
Also I closed up my INTC commons afterhours friday, it sucks it was 39.xx friday but I got those shares at 33.xx 2 weeks ago and got out with a profit. I have plenty of exposure via short puts and my short calls at 37 added another .74 this week. I think we’re in for an ugly period here, that’s what happens under these moving averages, I think most sane people knew Trump wasn’t going to force China into a bad deal, which is why he was championing all those meaningless trade deals all year but could never get China to agree. China just called his bluff and now he’s lashing out because that’s about all he can do to show some strength. Hopefully he comes to his senses soon and we don’t go through another April selloff a second time around.
Have a good weekend. I will see you monday.