Blake just spotted a major warning signal hiding in plain sight during today's balanced market session.
While the S&P 500 closed essentially flat and sectors showed equal numbers of winners and losers, one critical stock is flashing red. Visa broke below a key support level at $327. Blake sees it dropping to $308 before year end.
This matters because Visa does not make money from balances or defaults. They profit from transaction volume. Fewer swipes means consumers are pulling back right when holiday spending should peak. The stock is now showing lower highs and lower lows in a clear downtrend.
The timing could not be worse. Tomorrow morning brings the PCE inflation data that the Fed uses to set policy. Consumer sentiment numbers from University of Michigan also drop. Both reports could accelerate Visa's decline if they confirm what the chart is already telling us.
Blake sees two ways to position for this move:
- Buy the January $340 put for $16 in time decay, then sell the $320 put to collect all that decay back and create a theta neutral spread worth up to $20
- Sell shorter dated calls against it, collecting $2 to $3 per month while rolling down your strike as Visa falls
The alternative trade Blake highlighted targets the opposite end of the market. CCJ sits right on the edge of a buy signal after a pullback from recent highs. This uranium producer ties directly to AI energy demands. The chart setup could deliver an 18% return back to $110 with a clear stop at $86.
Blake structured this as either a stock trade or a calendar spread using the January $85 call. Sell three weeks of premium at 30 to 40 delta to cover your time decay. Then collect another $2 to $3 next month.
Today's perfectly balanced market is masking real tension underneath. When Blake saw 30 to 40 point drops happen in just 20 to 30 minutes, only to spend all day clawing back, that signals weakness. The market could not sustain any move in either direction.