Ignore concerning data, full steam ahead
Join me as I organize my thoughts about the upcoming week
For the last several letters I've been lost and bearish. I did state that how the market reacts to the 100 and 200 day smas would be telling. That time has passed, and we not only climbed quickly over these last two, but we haven't even revisited them for confirmation. We did confirm the 50 day already, and the 20 day is quickly coming up to the now flat 100 and 200 days.
Market Review
What does this mean? We are up over 5% this week and back in bull mode. Even if 6130 is resistance at first, the inclination is up. I've been saying, so long as things don't get worse, the market is expecting things to get better. That's a pretty dumb statement, but obviously true. While tariffs aren't completed, Trump flinched, despite saying he wouldn't, and the market now believes he will do whatever it takes to keep the market happy. That's been the case for many years now, that the fed and government will step in as a floor, but there was doubt when Trump was saying he wasn't looking at the market.
From here it looks like we would either confirm the 100/200 day at around 5780, at worst coming down to 5680, OR continue up to ATH.
We are less than 4% from all-time highs, which puts us back into a regular drawdown.
Which means I should start scaling up my aggressiveness. This past week I had my puts close on Sunday, and then on Wednesday I entered a conservative long put. All of this led to an increase .3% in the main account. Not much progress this week, but the deepest I recorded in the newsletters was -72.24, so I am up ~7% from there.
Currently at 5 and 14 deltas, with the calls expiring in 2 weeks.
Posts
I hope the prices come down more than eggs did, but the trader in my wonders what ramifications that'll have. Pharma is a huge industry, and if they aren't making their money this way, they will change it to another way.
Even though the general tariff with china is down, cheap goods is still high.
Wait, never mind, I think.
In other news, inflation has continued on its trend down.
Wasn't it just last week that I said the consumer was fine? Here we have a beautiful chart showing that credit card delinquencies are at the higher rate since the GFC. And prices haven't even increased from tariffs yet.
But the market is apparently unbothered. We just had a bullish cross in net new highs.
And the risk of recession has come down.
It's impressive, and I'll admit I didn't believe it would happen, that the market recovered this quickly. Very strong response from participants. In the depths of a decline, many say the world is ending, and usually I can offer a more grounded take, that things aren't nearly as bad as they say, but I got fooled this time.
The speed of the drop, and the self-inflicted nature, really did make it different this time. As bad as COVID-19 got, we knew they would throw money at the problem until it went away. When you purposely crash the market, it’ll only let up when you cave.
I've heard around that we are expecting housing to stay at these price levels, and allow incomes to catch up. I'm interested in getting another apartment, and so I spent all last year getting my finances right, and that work of course continues this year. SO I am hoping for a housing crash, for me to snap up a property or two.
And then out of left field we have news today about some more tariffs. I'm not sure what this even means, so I will be keeping an eye on this as the weekend goes on.
Quick Charts
Vix is down at the range from the beginning of the year. With the volatility behind us, when will we see the next bump? Typically, we have periods of calm after an event like liberation day. Down 20.5% this week.
From ~63 to 75 this week.
Small decrease, perhaps they are taking some profits from the move up? Sometimes people rag on NAAIM, but they basically caught near the bottom, on a pullback, at a logical spot.
From 63 last letter to 71 this week. Of concern, we are at the levels of resistance from late last year.
For AAII it's 35.9 this week, up from 29.4, and still under the high from 1/22 at 43.4.
After two letters of it being funky, things look normal again. With 4 cuts on the schedule, two this year, and two in 2026.
Earnings and Events
2024 Results
Q2 Winners: ELF, FSLR, CHWY, CRWD, AVGO, ADBE, ORCL, FDX.
Q3 Winners: GS, SPOT, LMT, ENPH, TMO, RTX, MCD, PYPL, PLTR, UBER, UPST, SHOP, LLY, TTD, SE, ORCL, MU
Q3 Losers: UPS, QCOM, LRCX, MBLY, W, INTC, ROKU, SMCI, ABNB, DG, AVGO
Q4 Winners: TSLA, CVNA, PLTR, ELF, SHOP, SPOT, DIS, SNOW, DE, CRM, LULU, ULTA, AVGO
Q4 Losers: HOOD, ROKU, W, MELI, NVAX, RKT, AMAT, TGT, ORCL, ADBE, MU
2025 Results
Q1 Winners: JPM, GS, MS, NFLX, PLTR, SPOT, UBER, NET, SMCI, UPST, HOOD, MGM, ABNB, ROKU, PLUG
Q1 Losers: UPS, DECK, PYPL, ELF, TTD, TWLO, FSLR, BBY, CRWD, ADBE
Q2 Winners: JPM, TSLA, NOW, LRCX, MSFT, DIS, TTD
Q2 Losers: UNH, ENPH, DASH
Last Week
SE +16.55
WMT +1.4%
DE +8.1%
AMAT +6.1%
This Week
Interested in: HD PANW TGT SNOW
Jobless, more pmi, and home sales
Thoughts
The market is ignoring any issues and on its ways to all-time highs
Rating
My attempt at being clearer on my expectations for the upcoming week:
Bullish
Bullish/Neutral
Neutral/Bullish
Neutral
Neutral/Bearish
Bearish/Neutral
Bearish
I thought we would be at #5 this week, and realistically we were #3. We likely continue that into next week. We may dip early in the week to confirm the smas if needed, but then recover by next week. Another scenario is that a confirmation isn't needed, and we continue our way up, which would be pushing a #2.
Conclusion
I wouldn't say I'm in sync with the market here. I have a pretty conservative position on, but have stopped day trading in favor of keeping something on all the time. As I gain comfort, I will increase aggressiveness.
Good luck out there!
As always, staying realistic and nimble is key to moving forward productively.
Leave a comment to say hello or a like to boost the newsletter.
Socials
Twitter: @toddhorst
Discord: https://discord.gg/gt7WaZN
Affiliate Links
Tastytrade - My primary broker. I have my primary margin account and IRA here where I trade strangles on /ES.
Robinhood - For dead simple charts (without the noise) of spy daily. I keep my dividend portfolio here because it’s a simple platform. I do not use for options.
WeBull - I use for charting and news. I do believe they will be the new “it” broker eventually when they finish implementing options and futures. I have some spill over long-term holdings here.
Tradingview - The best charting platform period.
Disclaimer
This newsletter is not trading or investment advice but for general informational purposes only. This newsletter represents my personal opinions, which I am sharing publicly as my personal blog. Futures, stocks, and bonds trading of any kind involves a lot of risk. No guarantee of any profit whatsoever is made. In fact, you may lose everything you have. So be very careful. I guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC, or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. By reading and using this newsletter or any of my publications, you are agreeing to these terms. Information and quotes shared in this blog can be 100% wrong. Markets are risky and can go to 0 at any time. Furthermore, you will not share or copy any content in this blog as it is the authors’ IP. By reading this blog, you accept these terms of conditions and acknowledge I am sharing this blog as my personal trading journal, nothing more.