The Week Ahead 5/18/25
Hello All,
I hope you all are enjoying the weekend and getting some time away from the screens & have had a good kickstart to ‘25 & I wish you all a successful remainder Q2.
Looking back at this past week, it was a relatively quieter one within markets as all the excitement was earlier on in the week following the news of both the U.S. & China coming to a mutual agreement to issue a 90-day pause whilst also having significantly reduced the tariff rate %’s down to 10% on each-other & as a result, we continued to see indices slowly churn higher all week as the Q’s led the way in regard to performance, +670bps on the week & on the flip-side, the Dow was the worst performing of the indices although still closed out the week higher by just over 331bps on the week.
- Economic Data for the Coming Week:
As we get ready to head into the upcoming week, it’s a relatively quieter one in regard to economic data & the bigger news will likely be from the administration given they arrived back from the Middle East & the focus will likely shift back towards trade-deals being solidified these next couple of weeks & or further announcements.
- STD Channels on Indices for Perspective: Weekly TF
- SPY
- QQQ
- IWM
- DJIA
Since starting this Substack back in June of ‘23, between individual names / tactical trades / baskets, we have netted a 119.78% return whilst in the same period, the Q's have returned 47.47% / Spooz has returned 40.97% / Dow has returned 30.48% & Small-caps have returned 18.72%, so nice outperformance against all the indices whilst having a 80.2% win rate, averaging a 21.34% return on realized gains / winners & a 14.48% loss on realized losses / losers.
Looking forward to the future as we continue to progress through ‘25.
A few weeks back, we wrote about hard assets & the structural framework behind hard assets given recent events & future outlook along with some historical perspective as well… you can check it out below for those whom may have missed.
Hard Assets in an Era of Soft Money
As global central banks quietly rearm their stimulus arsenals and fiscal deficits spiral past the point of discipline, the foundations of the global monetary order are beginning to crack. Amid this shift, one question looms larger than ever: Are we on the verge of a new commodity supercycle?
We also published the follow up educational piece which has been highly requested and majority of the topics covered were all suggested by you all, so I hope you find good benefit.
For those who may have missed, a link to Educational Piece Part: Deux can be found here.
For those who may have missed the first educational piece, I included the range of topics covered below along with a link to the piece for those who would like to go back and read:
- General background / knowledge on all option strategies
- In-depth talk on risk / reversals & how to go about expressing / utilizing them
- Options Structuring
- When to used naked calls / puts vs. spreads
- Choosing expiration dates
- Identifying key pivots / supports / resistance zones
- General briefing on stock gaps
- What to look for in regards to fundamentals
- Implementing fundamental / macro / technicals into a trade
- Hedging
- Creating risk/reward setups
- Taking profits / managing losses
- Overall Process
- Book recommendations
A link to the first educational write-up can be found here.
To briefly talk about this past week, over this prior weekend, the U.S. & China had discussions on trade in Switzerland & talks went much better than feared & exceeded market expectations. Both the U.S. & China agreed to issue a 90-day pause whilst also bringing down current tariff rate %’s to 10% on each other (+20% for fentanyl still remains so 30% on China), but given Trump had previously stated that “80% on China sounded right”, again, the outcome more than exceeded market expectations & it more so was an entire walk-back of all the Liberation Day framework…
A bit of a summary on how it all went down:
And despite the continued softening of rhetoric / uncertainties continuing to clear up, sentiment still remains very poor as individuals continue to remain UW equities & OW cash… it doesn’t need to be said but this rally has been quite the pain trade for many.
Why has this rally continued to be so persistent? Again, besides the stated obvious of HFs being UW equities after de-grossing near the lows, at the end of the day, this was a self-induced tantrum by the administration… they overplayed their hand / they got punched in the gut & because of that, a walk-back to more “humane” levels even as Lutnick said the other week was much needed. Because of this total U-turn by the administration, hard data weakening should be generally averted although there still will likely be some bumps in the road & with the administration abandoning fiscal austerity as they shift focus to tax-cuts & increasing the deficit, it’s almost like we’re back to ‘24… no responsibility with fiscal spending & continue to kick the can down the road whilst also looking to implement deregulation to further emphasize “the pump.”
