Good morning, traders…
SPY was up as much as 1% intraday yesterday, which is notable strength for Early August.
It wasn’t a perfect gap. We watched index prices battle on Tuesday, push through resistance on Wednesday, chop midday, then hold gains into the close.
Buyers showed up and stayed in. And that tells us more than just direction. It tells us who’s driving the move.
The Smart Money is betting aggressively on names with clear catalysts and clean charts.
When whales pick their spots like that — short-dated calls, low float names, post-earnings moves — it means they have information we don’t.
WARNING: Even with strong individual setups forming, the market internals are flashing yellow.
Tick breadth, sector rotation, and declining volume in leadership names all suggest a cautious approach.
That’s why I’m hedging long exposure with index puts and shorter-dated protection.
Lean into the best setups, but don’t forget to wear a seatbelt.
Let’s See Where The Smart Money Is Flowing (And How I Plan On Trading It)…
Carvana Co. (NYSE: CVNA)
This one’s been on fire. Smart Money piled into the $425 August calls. We’re watching for a breakout above $360. If it clears, that’s our trigger. CVNA went from $2 to $350 this year by solving one simple problem: people hate buying cars. They solved it. That’s a company worth watching.
Zeta Global Holdings Corp. (NYSE: ZETA)
Smart Money lit up my scanners with huge short-dated call flow right into earnings. I grabbed some near the close (around $3.13) based on size, timing, and direction. 95% earnings beat probability popped on our edge tools. That’s good enough for me.
Tech Resources Ltd. (NYSE: TECK)
This chart printed a textbook hammer candle after holding the low of the previous bar. That’s stage one, potentially flipping to stage two. If it reclaims $33, I’m eyeing the $33 September calls for a move to $35.35. Mean reversion setup with a tight stop.
Harmony Biosciences Holdings Inc. (NASDAQ: HRMY)
Above $35.60, I like the October $45 calls. That forms a cup and handle right under resistance. If it breaks, we ride that move.
Ethan Allen Interiors Inc. (NYSE: ETD)
I picked up more of the $27 calls after support held around the 13 EMA. There’s no put flow, only calls. That’s telling. If it fills the small gap to the downside, I’ll add again near $21. The pattern says “run-rest-run.” Let’s trade the run.
Why I’m Hedging These Setups
As good as some of these setups look, the market internals are telling me to hedge.
Yesterday, I traded SPY $632.30 puts on a textbook rejection of the 8 EMA. I saw that flush into the mean, which is exactly where I sold those puts.
Nothing fancy, just trading from one risk zone to the next. That’s the model: support, resistance, and the mean. Don’t overthink it.
If SPY creeps back up to that same $632 resistance, I’ll look again. Tight risk, same plan. That’s the kind of repeatable hedging setup we want in sideways chop.
You don’t need a perfectly-trending market to make money. You just need zones that hold.
One Last Word on Accountability
You need someone in your life who’s got full permission to call you out. No filters.
I’ve got two close friends who know me inside and out. They can say, “Ben, you’re wrong,” and I know they’re seeing something I’m not.
If you don’t have someone who can say, “Hey, that trade was emotional,” or “That was sloppy sizing,” you’re missing a mirror.
I trust Becca, I trust Ethan, I trust Mr. Anderson. When they speak, I listen.
Want to find that person?
Our webinars and chat rooms are the best places to start. The Smart Data Trading community is filled with smart, motivated, like-minded students.
Danny Phee is hosting one TODAY, August 7 at 9:00 a.m. EST.
He’ll go over our best trade ideas in the options market. And you just might find a trading friend to bounce ideas off.
You only have a few hours left — Click here to sign up before it’s too late.
Happy trading,
Ben Sturgill
*Past performance does not indicate future results
