Market Overview
The SPY could be going for its 3rd consecutive close below the 21 EMA today, and the action is getting worse, not better. We opened at 759.90, couldn’t hold 763, and are sitting at 762.43 with the 8 EMA at 767.68 and the 21 EMA at 768.88 now acting as resistance overhead. The 8 EMA has crossed below the 21 EMA with a tight -1.20 spread that is converging bearish, which is a textbook deterioration signal. VIX at 19.2 is elevated but not panicking yet, so there is room for this to get uglier before a real capitulation low forms. The 50 day at 766.95 is also flipping from support to resistance, and until we reclaim that cluster around 767-769, sellers are in control.
The dominant theme in morning flow is large institutional SPX bullish risk reversals, with the two biggest prints totaling nearly $260M in notional pointing toward upside targets in the 7000-8000 range through January 2027 - smart money is fading this dip on a longer time horizon. That said, there is notable counter-pressure in semis, with a bearish SMH put block and TSM puts bought adding up to nearly $15M on the bear side, suggesting the semi space specifically is under institutional pressure near term. QQQ flow is split with both puts and calls in size, but the put strike is closer in and the call strike is deep out and far dated, so the near-term lean in QQQ reads cautiously bearish.
I have included some names from my Cyber thematic stack - I have seven thematic stacks in the Professional Grade Trading Platform in the Discord. Cyber names are flying today.
You can drill down into individual names are review the Pillars that make up teh scores. Dark pool flow and options flow is included
There are 6 pillars in total.
