Trade Call: Buy the S&P 500 Now
"This is your chance to ride the wave. Buy the S&P 500 now. Buy it or miss it."
Tom Lee delivers an explicit trade call encouraging investors to buy the S&P 500 immediately. He frames this as a critical opportunity, arguing that waiting could mean missing out on the next major rally. His call is backed by his broader prediction of a continuing bull market driven by Fed rate cuts and robust economic growth.
SPY Support Levels and Potential Reversal Zones
"Now, here's what's important about that. The longer that we create transactions at this level, if next week, if the market wants to go higher on lower volume, we can easily break away and treat this as support. Now, the downside is if we create a bunch of transactions as it slowly moves sideways right above 681 and right beneath 684, 685, then you're creating a wall of resistance above. So that if we do make that break next week, it'll be hard to recapture; Wall Street will begin to sell and not spend much time looking in the rearview mirror at the bag holders that got left behind buying at a frothy top market. If we do come down and we don't bounce hard on 670, you can pretty much book that we're going to run down and hit 650."
The speaker outlines critical support and resistance levels on the SPY chart. He highlights that if transactions continue to form around 681, they could establish support, but a buildup of resistance may prevent a sustained upward move. A drop below 670 that fails to bounce could lead to a move towards 650. The commentary advises caution and emphasizes the importance of stop-loss planning.
SPY Technical Trade Call Based on Late-Stage Rally Signals
"Obviously, we've had a number of stacked amazing months, but currently this red candle engulfs the previous monthly candle, which is very bearish. And if this candle were to close red the way that it is opened above and currently could close below, this is the November monthly candle, if it closed below the October monthly candle, that would be very bearish and it would confirm that we are moving down to 640, at least as far as I can read the charts. However, if we close beneath 640 and this candle goes from an engulfing candle to a hammer candle or a T, then it means that 700 to 720 is still on the table; otherwise, if that 640 support fails to attract buyers, we have to assume 603 at the moment."
The speaker provides a technical analysis for SPY, indicating that the current red engulfing candle is a bearish signal. He outlines that a close below 640 would confirm a downside move toward 603, while a reversal could set up a rally toward 700-720. This analysis points to an actionable trade opportunity based on short-term chart signals amid a late-stage rally.
Hedge with SPY Put Spread for Downside Protection
"I'm keeping a close eye personally on that 650 level when talking about the SPY ETF where investors have nearly 90,000 contracts open at that particular strike. And a move lower to 650 on that SPY ETF would equate to a pullback of nearly 3 and a/4%. The 640 strike would require a near 5% pullback from current levels, which would put us close to that 10% correction level. So, if you wanted to hedge your portfolio to protect it in some degree from any downturns, you could utilize an option strategy like a debit put spread. And this is one that I recently added into. It's a lowcost one. You could buy to open the 1219 650 put and at the same time you could sell to open the 1219640 put. So we're buying a put and selling a put. This spread would cost you a net difference of 160 or 160 per contract. And if the SPY ETF were to fall down to 640 or lower, your max profit on this investment would be 840. Again, if the S&P 500 stays above 650, hopefully that means the rest of our portfolio is doing well. Thus, this option contract would be a loss."
The speaker outlines a defensive hedge strategy using a debit put spread on the SPY ETF to protect against a potential market downturn. Key support levels at 650 and 640 are highlighted, with specific details on the cost of the spread and potential profit if SPY drops, serving as an actionable trade call for short-term market protection.
Hedging with SPY Put Options
"Now, how much does it cost to hedge? If I want to protect for a year and something more, I have to pay around 40 for a put option on the spy ETF here. So, for 13 14 months, I am 5.9%. So, I buy a put and whatever happens with the market I am at zero. Of course I hope to lose those 5.5%. Because that 6% cost allows you to be 100% long with whatever you have in your portfolio. Maximum loss is 6% - that's the maximum downside your portfolio has."
The speaker explains a hedging strategy where buying a put option on the SPY ETF for about 13-14 months costs roughly 5.5%-6% of the portfolio value, effectively limiting the downside risk to 6%. This method is presented as a cost-effective way to protect against market downturns, providing a defined loss while maintaining exposure to potential market gains.
Dollar Cost Averaging into SPY
"First off, dollar cost average in lowcost ETFs. One of the simplest and most powerful strategies I know is this guys, I do it every month. I invest in my lowcost ETFs every single month. If I do it consistently, no matter what happens to the market, I will continue to match the market returns. I'm going to buy when stocks are up and I'm going to buy when they're down. And over the long haul, I'm going to pay this price for it. That's what's key. When you buy an ETF, you're buying a basket of companies. You get exposure into hundreds of businesses in one move. The ETFs that I buy the most of are spy, VO, CHD, and when the price makes sense, I will do QQQ. They're low cost. They're diversified and they work in the long run."
The speaker delivers an actionable trade call by urging investors to dollar cost average into low-cost ETFs, specifically highlighting SPY. The advice emphasizes steady, regular buying regardless of market fluctuations, thereby capturing market returns over the long run.
SPY as a Solid Base for Dollar-Cost Averaging Despite Tech Concentration
"When I look at the overall market I think SPY is in a really strong place. Yes, the market is slightly pulling back with the NASDAQ and S&P 500 down a bit, but this is a really good time to dollar cost average since you can't predict the future. I think SPY will do just fine looking ahead to 2026. The only thing is that despite having 500 stocks, about 40% are in a tech-heavy concentration, so it's wise to hold other stocks in your portfolio as well."
The speaker offers a positive long-term view on SPY, noting that despite short-term market pullbacks and a tech-heavy bias within its holdings, SPY remains a solid choice for dollar-cost averaging over the coming years.
Initiating SPY Calls Amid Market Froth
"Millennium has underperformed the S&P 500. We'd like to redeem our entire investment from Citadel, Kensington, and Wellington funds immediately. What are we going to do with it? Well, first of all, sir, that's none of your business. But second of all, I'm going to buy some spy calls. That's right. And a good day to you."
The speaker outlines a scenario where underperformance leads to a decision to exit traditional investments and execute a position in SPY call options, explicitly stating a plan to buy calls as part of a gamma squeeze strategy. This direct trade call reflects a bullish stance on the broader market via SPY options.
Actionable Trade Call: Buy SPY to Capture the AI-Driven Bull Market
"Tom Lee has recently claimed that the real bull market hasn't even started yet. He is now predicting that the stock market will more than double in the next 5 years thanks to artificial intelligence. According to him, if you're not buying stocks right now, you're going to miss the biggest rally of your life. Nope, pile in. Time to buy. Don't miss out on the next boom."
Tom Lee delivers a strong trade call urging investors to enter the market immediately, citing an impending AI-fueled rally that could more than double market levels within the next five years. He emphasizes buying equities now, implying investments in broad market ETFs like SPY, to avoid missing out on the biggest rally of the investor's life.
Neutral SPY Technical Levels and Catalysts
"All right, let's kick things off by first going into the SPY. I want to make a few points there about what I'm watching. This was the last stress test the market went through on the SPY back in July. We had this red bearish week and then a recovery that pushed price back to the top of the range. Now, we're in the beginning of our second week and we're still struggling with the top of this range, which means the market largely is neutral. However, if positive catalysts emerge and the market pushes above 675, we could rip straight away to 680, making brand new all-time highs."
The analyst reviews SPY's technical levels, noting that the market is currently neutral as it consolidates near the top of a key bearish candle from July. He highlights important trigger levels around 671 and 675, suggesting that a breakout above 675 could lead to a bullish move to 680. The commentary emphasizes the need for a catalyst to shift the market's neutral stance.