Three out of every four S&P 100 stocks closed higher today. Blake Young still calls it a warning.
He tracked the money underneath. $13.7 billion flowed into declining positions against just $1.7 billion for the winners.
That’s a 12 to 1 ratio.
Blake says a big move up or down usually separates buying and selling by maybe $2 billion. Extreme days run 8 to 1 or 10 to 1.
The S&P 500 has traded in a very narrow range for three straight days. Blake sees more than a flat, range bound tape.
To him, today’s failure to bounce shows the market rotating out of risk. He expects that rotation to last a while.
XLK gapped down and closed down. Blake reads that as a runaway gap and wants traders exiting their technology stocks.
Utilities and consumer staples are holding up as defensive plays. Utilities have already gained more than 10% off their lows.
Blake is still looking for bullish positions in energy and staples. On the tech side, he wants trades that pay him significantly for the risk.
Tonight’s video walks through four setups built for this rotation:
- SLB sits at 38% IV rank. Blake sells the 53 put near a 40 delta for 2.93% in 29 days, with assignment dropping his cost basis to about $51.50, right at the 200 day moving average.
- Walmart could fill its gap up at 130. Blake sells an out of the money put near 118 for roughly 2.7% over a month, with assignment putting his cost basis just below 116, his next support.
- Oracle has crashed from $281 to $114, a drop of more than 50%. Blake sells the 145/150 call spread for about $1.45 against $3.55 of risk, roughly a 40% return on risk.
- Cisco just made a new lower high. Blake sells the 114/115 call spread for 35 to 38 cents, close to a 50% return on risk with earnings on the 12th.
Walmart has earnings coming up. Blake shows how a shorter expiration pays almost the same and lets you exit before the report.
Oracle and Cisco don’t need to fall for those trades to work. They just need to stay below his strikes.
Blake targets tech names rolling over with lower highs and rising volume on down days. He sees those premium sales as the best opportunities against the AI stocks if $13 billion keeps leaving.
