Blake Young stripped the overnight session out of today’s tape. The S&P 500 moved 0% from the cash open.
Every bit of that recovery landed while American traders slept. This wasn’t an audience participation move.
Technology ran 2% on the day. The index still finished flat once you measure from the 9:30 candle forward.
Blake traced the buying to the dollar. Foreign capital converted euros, yen, and pounds into US equities overnight.
The dollar broke out of a double bottom and now targets 100.61. It closed today with the exact same strength it carried yesterday.
Equities fall when the dollar climbs. That overnight bid papered over a market still rolling over underneath.
Look at the quarter instead of the session. Only communications, healthcare, and energy sit above the S&P 500 average over the last three months.
Half the sectors sit below zero. Blake reads that as a temporary pullback, and he’s getting ready for the next drop.
So he’s fading the rally. Financials give him the cleanest short on the board.
Financials gapped up and closed down. Blake calls it an exhaustion gap, and the sector cracked its intraday support on the way out.
Here’s what he walked through in tonight’s video:
- Financials broke a triple top and hit the first target near 55.40. Clearing that low opens another $1.60 lower, a 3.5% to 4% move in the sector.
- KRE has to close below 72.50 outside the shadow. Blake expects a 5% drop toward 69, maybe 68.
- JPMorgan 30 days out, he sells the 42 delta call spread for $1.95 on a $5 wide. He needs to be right 60% of the time and the probabilities show 61.95%.
- Citi’s in-out put spread buys the 140 and sells the 130 for about $5.48. That’s a 3% statistical edge, and it stretches to 8% if he fills at $5.
Bank of America already broke its support and ran too far for a clean entry. Blake wants a test back toward 59 or 60 before he pays up.
He still mapped the trade. The 60/57.50 in-out spread costs $1.25 with a breakeven at 58.70, which gives the stock a 1.25% cushion to rally.
The capital markets names are holding fine. Consumer lending is bleeding, and Blake points straight at Ally, Capital One, Klarna, and Affirm.
Banks lend less when short-term rates push higher. Margins compress from there.
Blake isn’t treating this as a one day fade. He’s looking at bearish financials for the next week, the next quarter, possibly the next year.
Technology gets its turn eventually. Right now he’s taking the strongest signal on the board.
