The S&P 500 (SPY) looks fine on the surface. Blake Young just showed exactly why it isn’t.
In today’s video, Blake breaks down why the advance/decline number is misleading. 52 stocks are up, 49 are down. Balanced, right? Look at the capital flows and the story changes fast.
$1.7 billion is flowing into the stocks going up. $6 billion is flowing out of the stocks going down. That is a four-to-one ratio at the exact moment the market is testing a key resistance level.
Blake calls it profit-taking combined with short positioning. Not just closing longs. Actively setting up bearish trades at this level.
Add to that: the Chaikin money flow is past two standard deviations, meaning all the buyers that can buy have already bought. Volume has been shrinking throughout this entire rally. And today’s candle is forming a hanging man right at the 0% level of the monthly distribution.
Oil surged 3.5% today and Blake sees it heading to $107 by next week. With mines being placed in the Straits and no resolution on the horizon, elevated crude is not going away soon. That puts continued pressure on consumers and the broader economy.
Tonight’s video walks through specific setups Blake is targeting in this environment:
Altria (MO) is breaking out toward $69 to $70. Blake details a 66/69 call spread for roughly $1.25, targeting 70% of max gains before earnings on April 30.
CVS (CVS) is setting up for at least a $4 move toward $83. Blake outlines a short put vertical at the 78 strike collecting $0.42, with a 64% probability of success based on the delta.
Carvana (CVNA) looks like a top. Blake is watching the 430/435 short call vertical for $1.25, with a break even at $431.25. Even a strong earnings beat would need an additional 8.5% move to hurt the trade.
The rotation into utilities and consumer staples is real. The money leaving discretionary and tech is real. Blake’s trades are built for exactly this setup.
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