“Sometimes the best outcome is the most retarded” —me

It is so hard not to get caught up in the drama of the markets; it seems every asshole (myself included, with my little stocks blog) has their opinion about what should happen, or what is going to happen.

And while I wish we could see who exactly is making these trades for some sense-making, the volume does always at the end of the day tell a story: but my question to you, dear reader, is will you see the vol in time, and will you have the patience to make the inevitable trade on either side?

Flashback to me in the beginning of 2025: I texted my neighbor that I was feeling a bit bearish overall, not only because of the Trump presidency not going as well as everyone was expecting (I’m actually one of those people who didn’t vote for him) and the increasing worldwide global challenges, but just because that chart felt topped out to me.

2021-2022 was such a brutal time period for everyone, and the chart had the same “vibe” as that previous 2021 top. I was lucky enough this time around to have my darling stock HIMS hedging me along the way taking minimal losses for 2025 so far VS SPY, but I’d be lying if I said I was not caught off-guard with this *sudden* bearishness and tariffs, etc. (and a lot of traders on X were really spot-on with these calls when I was looking the other direction completely), even though on the macro from a chartist perspective, it was actually quite beautiful how it panned out in the end (though I wish I had the patience and capital to make the original swing). It just goes to show though, that the market does not care about your thesis, and will not wait until you have your paycheck to purchase puts at that perfect top.

I joked on Twitter when SPY was trading just around / above the 50DMA that it was simply too late for puts (though you definitely could have ridden it down a bit more, it just felt like chasing to me as a person who actually rarely trades the downside even though I will forever remain trying better foresee bearish trades).

Basically, I do not ever want to be running late to the sentiment / momentum trades, especially when sometimes the best indicator is simply inversing everyone. So I decided to stay out completely the last two weeks, holding some 3/21 calls I had been swinging anyways (no pain, no gain!).

Looking at SPY after the recent bloodbath, I have to say I want so badly to find a bottom, but I don’t want to be a hero, just look at things from both angles to be prepared when the price hits certain levels. So let’s take a look:

SPY BULLISH:
-bullish engulfing candle from Friday
-Bitcoin stabilized for a potential bottom being a tailwind for SPY
-SPY bottomed above $549.68 the last 4 trading sessions
-Does not have to make sense, sometimes the best outcome is the most retarded
-Green vol bar Friday
-NEEDS a close above 568-570!
-Mimic the previous move from SPY selloff
-NVDA held above its 10DMA the last 4 days
-Bitcoin needs to hold $75-80k, and surpass $85-90k

SPY BEARISH:
-still trading below 10/50/200DMA
-Sentiment overall bearish with tariffs, etc.
-Market fragility at this level with risk of more news taking us lower
-Needs a close below 556-549
-Watch news carefully and hold
-Bitcoin needs to break $80-75K

So all in all, despite the sentiment being that this is the end of times, there are in actuality more reasons to be bullish than bearish IMHO, but that doesn’t mean I could be wrong and we still go lower.

The key indicators that I’d be looking for is now seeing the market leader Nvidia hold its 10DMA on the daily chart and SPY closing back above the 200DMA. If SPY can close above the 200 day moving average in the next two sessions and grind back up to its respective 50 day moving average around 590 (knowing this number might fluctuate), I do believe a local bottom has been formed and would be looking into entering calls with that signal close above the 200 day moving average.

If SPY ends up rejecting the 50DMA, then I would say this could be a looming “bear market” rally and we would be continuing in a down trend potentially a lower low on the daily chart back into corrective territory.

Sometimes the outcome doesn’t have to make sense; maybe it is as simple as buying the dip with moving average confirmation as long as you’re careful, I have no clue.

I wish everyone the best for the remainder of Q1 2025, and I will be looking at taking some swings for April on this dip with the above signals for confirmation when the opportunity presents itself.