DailyPlay – Portfolio Review & Opening Trade (SPY) – May 5, 2025

DailyPlay Portfolio Review

Our Trades

AMZN – 4 DTE

Bullish Long Call Butterflies – Amazon Inc. (AMZN) – The stock showed little movement after the company reported earnings, remaining on its current course for now. AMZN showed little movement after the company reported earnings, and we are staying the course for now.

GOOGL – 11 DTE

Bullish Debit Spread – Alphabet Inc. (GOOGL) – Since GOOGL’s recent earnings announcement, the company’s stock has shown bullish momentum. We are profitable on the position and intend to stay the course for now.

INTC – 25 DTE

Bearish Credit Spread – Intel Corporation (INTC) – Intel’s recent earnings release led to weakness in the stock. We are in a profitable position and intend to stay the course for now.

JPM – 25 DTE

Bearish Credit Spread – JPMorgan Chase & Co. (JPM) – After announcing earnings, JPM’s stock initially leaned bearish but has since bounced back. We are currently down on the position and plan to stay the course for now, but have a very short leash.

NVDA – 137 DTE

Bullish Long Call – NVIDIA Corp. (NVDA) – Following the news-driven decline, NVDA participated in the upside momentum the market showed this week. We remain bullish on NVDA given its strong fundamentals. In the short term, we may look to sell call premium to capitalize on elevated volatility. The company is not scheduled to report earnings until Wednesday, May 28.

PAYC – 11 DTE

Bullish Credit Spread – Paycom Software Inc (PAYC) – Since establishing this position, not much has happened and we are currently up slightly, but the common stock is set to report earnings on Wednesday, May 7th after the market close, and we will most likely hold the position through earnings.

SPY Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
After a strong run, the U.S. equity markets appear to be approaching exhaustion, with SPY trading near potential resistance in the $560–$570 range. While the longer-term trend remains intact, short-term momentum is clearly decelerating, suggesting the risk-reward skews negatively at current levels. Multiple macro and market signals—including rising jobless claims, deteriorating consumer credit health, and early signs of renewed supply-side pressures—point to a likely pause or pullback in the near term. This backdrop sets the stage for a tactically bearish position, ideally structured to benefit from stagnation or mild downside.

Market Timing
SPY has erased the losses from the tariff tantrum, but the recent price action shows signs of exhaustion. The ETF is approaching a critical resistance level at $570, which coincides with prior zones of consolidation. Unless SPY decisively breaks above this zone with volume, the path of least resistance favors consolidation or a retracement.

Economic Analysis
Equity valuations remains above long term averages which are at risk with a weakening growth outlook. Additionally, increasing initial jobless claims, rising credit card delinquencies, and unresolved supply chain risks—especially related to China—pose tangible downside catalysts. Even if geopolitical and tariff issues resolve quickly, the lag in supply chain normalization could result in temporary shocks and margin compression across sectors.

Options Trade
To express a neutral-to-bearish view with defined risk, consider initiating a short call vertical in SPY:
Sell the SPY Jun 20, 2025 $570/$595 Call Vetical @ $11.42 Credit
This trade has a probability of profit of approximately 63.5%, making it attractive for traders expecting SPY to stall or pull back below $570 over the next 30-40 days. The 25-point width allows room for a controlled upside move while benefiting from time decay and resistance holding near current levels.

SPY – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 2 SPY June 20 $570/$595 Call Vertical Spreads @ $11.42 Credit per Contract.

Total Risk: This trade has a max risk of $2,716 (2 Contracts x $1,358) based on a hypothetical $100k portfolio risking 1%. We suggest risking only 1% of the value of your portfolio and divide it by $1,358 to select the # contracts for your portfolio.

Counter Trend Signal: This is a bearish trade on an instrument that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bullish/Neutral

Relative Strength: 6/10

OptionsPlay Score: 117

Stop Loss: @ $22.84 (100% loss to value of premium)

View SPY Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Friday ‘s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View SPY Trade