Pre-Market commentary for May 21, 2025
Below is a straight copy-paste of my posts on X without any reformatting. I have still not able to train my AI tool to do a proper blog post for me out of my posts. But I will someday.
=====
We start Day 3 of Week 21 after a break in the up run from $SPY and $QQQ. Although both were down only slightly. The $IWM actually closed in the green. But it has a different problem which I will go over later in this note. The Bitcoin $BTC price had a run up to 108k overnight and now trading in the mid $106k area. And the $GLD reversed meaningfully off of the 50-day moving average and is also up in pre-markets today. I closed my call spreads yesterday as it had reached close to my max profit level. My $UNH call spreads are also at close max profit levels and I will likely close them today or tomorrow. $HOOD seems to be stalling near its all-time-highs for now. That is not surprising as it is always a big hurdle to cross over. I do think it is a matter of time though. $PLTR did take out its earlier highs and has stalled a bit since then. The trending still looks good. So, I am going to stay long for now and watch. $TSLA price continues to do well in its slow progression towards the 360 level. Although, along-with the rest of the stock market, it too looks exhausted and needing a break. And $NVDA has taken out the 200-day moving average meaningfully and now hugging its 5-day moving average. Next week is earnings.
=====
The $SPY price has done the heavy lifting of coming inside an area where there is a lot of trading done in the recent past. See the shaded portion in the daily chart. So, it is normal for the $SPY price to take its time to contend with this area before making its next move. Note that the V-shaped recovery usually happens when there is thin trading on the way down. That allows for price to go up quicker. In this runup $SPY price has crossed over the 50-day and the 200-day moving averages. Now as long as the price stays above the 20-day moving average (red, currently at 568), we should consider the trending to be bullish. Although, I am also watching the 584 level as the bottom of that trading range (shaded area) as a support level which I would expect price to hold if momentum remains strong. $SPY is at around 590 in pre-markets down slightly.
=====
Similar to $SPY, the $QQQ is also at an area where there was a lot of trading in the recent past. See shaded area in daily chart. In fact, that is the area where we had the double-top and then the steep decline. The $QQQ has also come through the decline in a v-shaped formation because of the thin trading during the decline. Now it has come inside the zone of contention and I would expect some choppiness. The question is whether the $QQQ price can stay within this trading range (shaded area) or does it dip below. Even if the $QQQ price dips below for a day or so, I want to see the price test the range again before falling below the 20-day moving average which is at 492 (red). $QQQ is down slightly at just above 517 in pre-markets. That happens to be just above the trading range. So, will be interesting to see if that holds.
=====
There are 2 problems with the $IWM as seen in the daily chart. 1. Price is still below the 200-day moving average whereas for $SPY and the $QQQ they are above. 2. Price is still below that descending trendline from the highs reached in November. The good news is that price is above the 20-day and the 50-day and also both have started turning and rising. So, there is hope that price will use the recent gains and march on. But hope is not a strategy and I want to see the price action to actually believe in it. First order of business is to go over that descending trendline. Waiting and watching.
=====
At this point it seems inevitable that Bitcoin price will make new highs. Overnight the $BTC price did cross over 108k so it may have already done that. I use the $IBIT which is the spot Bitcoin ETF to have a daily separation in the price action like the stock market as opposed to the crypto market which is 24x7. We can see that $IBIT price came close to making the new highs yesterday itself. In fact as a daily close price, it did close at a new high. Anyway, I like to keep things simple. At this point and for me (not giving advice), it is a no brainer to be long Bitcoin. I express that by staying long $IBIT call spreads and $BITU.
=====
The only question for the $GLD price is whether it has taken the breather it needed and now ready to take out the highs it made recently. As we can see from the $GLD daily chart there has been some chop in that shaded area and now we are back inside there. The fundamentals and macro do point to the Gold price going higher. But I do not trade based on that. I did close my $GLD call spreads yesterday as it had reached close to my max profit levels. I will be looking to get back in soon. Note that my favored strategy is to buy dollar spread in the money call spreads at half the spread width and then sell at the spread width. Not complicated if one thinks about it a little. And, believe me, mis-pricings in options contract are there to be taken advantage of.
=====
I do post on X during the day under the handle AlternateTrader.