Tony B - Market Update
Holding 6,600 & What Volatility Is Telling Us
Dear Grow Your Pile Members,
Today’s price action is encouraging. The SPX and /ES are holding around the 6,600 level, which is an important line in the sand right now. Honestly, I expected us to dip a bit lower before finding our footing — but markets don’t always give you the clean setup you’re looking for.
If you caught my tweet last night, I flagged something important: we had our first underwater close of this move, meaning /ES continued selling off after the regular SPY market closed for the day. Historically, that kind of after-hours follow-through often signals capitulation — the last wave of sellers getting out. My call last night was simple: open near the lows, then rally. So far, that’s exactly what we’re seeing. Now the key is holding this rally and not making a new high on the VIX above 26.
Speaking of volatility — I always watch the VIX closely near recent market lows. When volatility starts to fade while the market is still weak, it’s often a signal that the selling is exhausting itself. The VIX hit a tradable intraday high near 26 today. I sold volatility at 25.55 on the way up — a little early as usual, but that’s the nature of the trade. If volatility closes red today, that would be a very encouraging sign for the broader market.
--- Portfolio Update ---
All of our active trades are defined-risk structures, which has meaningfully cushioned the blow during this roughly 6% pullback from all-time highs. You’re not getting hit the way a straight long position would.
On today’s rally we rolled half of our front-month positions out to back-month expirations, buying ourselves more time to be right. In hindsight I would’ve moved the full position — but hindsight is a luxury we don’t trade with.
One final note on performance: the portfolio was actually up on the year as of yesterday. Today we’ve turned slightly red for the second time this year. We have not increased position sizes — we remain comfortable and disciplined at our current contract sizing per $100K of risk capital. No panic, no overreaction. We stay the course.
As always, reach out if you have any questions.
Tony B
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