Blake Young watched the market turn cannibal today. There is no fresh money left to buy stocks.
Every dollar moving into semiconductors had to come out of something else. That is the only way to buy chips right now.
The numbers are brutal. $3.7 billion left the S&P 100 today, while just $890 million flowed back in.
Eighty-five of the top 100 stocks closed lower. Fifteen closed higher, and all fifteen winners were semiconductors.
Capital flowed out four to one. Broadcom (AVGO), Micron (MU), Intel (INTC), and AMD (AMD) soaked up nearly all of it.
Every sector turned negative. Bonds dropped. The only thing higher today was the US dollar.
Blake traces the panic to the new Fed chair. Forward guidance is going away. A task force is reshaping how the FOMC operates.
That uncertainty poured fuel on an already fragile tape.
Here is the part that matters for your trades. Blake is not chasing this selloff down. He wants to sell premium on the names still propped up.
Apple (AAPL), Microsoft (MSFT), JPMorgan (JPM), and Citi (C) all rallied into resistance. Blake sees each one failing from here.
In tonight’s video, Blake walks through four specific setups:
Apple broke its gap-up at the monkey bars. Blake sells the 300/305 vertical for a $1.90 credit, risking $3.10 and needing to be right 62% of the time.
Microsoft collapsed from nearly 470 to under 378. Blake sees 360 next. The 390 strike paid $1.75 before the selling dragged it to $1.60.
JPMorgan tested its six-month high and failed. Blake sells the 340/345 vertical for $1.85, needing to be right 63% on a $5 wide spread.
Citi stalled at 143 to 144 just like JPMorgan. Blake’s favorite trade is the 146/147 credit spread for $0.40 to $0.45. It only loses on a new record high.
Blake builds his edge into the structure of every trade. As he put it on Citi, he doesn’t have to be right. He just has to not be wrong.
The S&P futures closed down 1.13% at 7500. Blake expects 7400 within two or three days.
He sees another 100 handle lower over the next two weeks.
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