Market Overview
The SPY is on its way to a second consecutive close below the 21 EMA today, printing 765.26 currently against a 21 EMA sitting at 769.84. What makes this uglier is that the 8 EMA and 21 EMA have nearly converged, spread just 16 cents apart, which is a bearish compression signal. We saw a sharp rejection off today’s open, with price rolling over from 767 down to a low of 762.10, well below the 50 day at 768.18. VIX at 18.8 is not screaming panic, but the tape is not acting well and two closes below the 21 EMA puts us in a cautious posture heading into the back half of the week.
The index flow this morning is a tug of war, with the largest single print being a $108.9M bullish risk reversal in SPX Dec26, but that is being met with a cluster of bearish risk reversals totaling well over $160M across SPX and SPXW expiries ranging from Dec26 through Jan27. On the tech side, semi names are seeing put selling in SMH and SOXL, a combined $38M in premium sold on downside puts, which suggests some players are fading the weakness in chips and positioning for a floor.
On days like today I am not going to post flow for the sake of it. You should not be rushing to put new trades on.
Here are some trades of interest that didn’t make it into my scores:
In the flow that I provide here for Top Set Ups I score everything - it’s not new - I have been doing this since the original launch of my Discord. All trades over 30 dte that I identify and classify are scored. So if you are a member of the Discord you get access to this as live flow and as a separate dashboard. Its very helpful because it does a lot of the heavy lifting on technicals. Here I am using that NTRA example above.
It scores quite well but not well enough to put it as a top set up in my Daily Report.
