The S&P Looks Fine. The Market Underneath Is Not.
A read of where capital is actually moving across indices, sectors, and the mega-caps — and what we're doing about it in the books.
Here’s the trap the headlines are setting for you this morning: the S&P 500 is down a quarter of a percent and still up 9% on the year. Sounds like a sleepy, grind-higher tape. It is not.
Underneath that calm index print, capital is moving violently — out of the names that carried the market for two years and into almost everything else. On the same day the S&P barely budged, Netflix fell nearly 7%, Alphabet and Amazon dropped ~5-6%, and Microsoft lost another 2.9% (now down 18% on the month). Meanwhile small caps, financials, industrials, and international are quietly running. This is what a rotation looks like before the index headline catches up — and it’s exactly the kind of tape where what you’re positioned in matters far more than which way “the market” went.
What we’re doing in the books
Leaning into the richer premium — carefully. VIX up 12% on the month means our short-put ladders (P1, P2) are getting paid better to sell the same distance. We keep selling, but we respect the dispersion: cushion on index puts, and we don’t chase premium in the mega-cap names that are actively breaking.
The diversification is earning its keep. This is exactly why P1 runs a GLD sleeve and P3 carries international and macro exposure rather than living and dying by SPY/QQQ. When leadership rotates this hard, a book concentrated in cap-weighted tech feels it; a diversified premium book keeps collecting.
The hedges stay on. Mega-cap cracks plus a rising VIX is precisely the backdrop our Black Swan Hedge sleeve is built for. We are not removing tail protection into rising volatility — we let it do its job.
The Decision Framework
Regime read: Volatility rising (VIX +12% MTD), breadth broadening (small caps, international, financials leading; mega-cap growth lagging), dollar firming, commodities/crypto correcting. Risk is being re-priced, not dumped.
If you sell premium: This is a friendlier tape for it — but sell the strong, broad areas (indices, the rotating cyclicals) and demand extra cushion on anything in active decline. Size for the dispersion, not the calm index.
If you’re long mega-cap tech: Understand you are long the part of the market currently losing leadership. Consider whether a covered call or a collar makes sense to harvest income and define risk while the rotation plays out.
What flips this: A VIX that rolls back over and mega-cap tech that stabilizes would say the rotation was a shakeout, not a regime change. Until then, treat strength in financials/industrials/international and weakness in Big Tech as the trend, not the noise.
You don’t have to predict the rotation to profit from it — you have to be diversified enough that it pays you instead of punishing you. That’s the whole point of how we build the pile.
Want to see exactly how we’re positioned across all three portfolios — every short put, every hedge, every roll? It’s all live, in real money, on the member dashboard at growyourpile.com.
Educational content from the Grow Your Pile team. Not investment advice or a recommendation to buy or sell any security. Options and futures involve substantial risk and are not suitable for all investors. Performance figures are point-in-time and will change.
— Tony Battista & Tony Rihan Grow Your Pile