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The Benefit of Active Trading No One Talks About
What Wordle and Trading Have in Common
Jeff Sanchez
August 05, 2025 • Est. Reading Time: 7 minutes
Welcome back to Hitting the Bid Weekly!
On deck this week…
The “down >0.5%” voters finally get one!
The quiet after the storm of earnings and macro data
Is Amazon delivering a dud right now?
Why active investing is still worth it for me
Around the Market
Equities finally pulled back this week.
The S&P 500 (via SPY) started strong on Monday, up 1.5%, but that came after a wave of selling late last week. The index hit another all-time high of $639.85 on Thursday before sliding into the weekend. With a close at $631.17 on Monday, the S&P is down 0.9% compared to last week. Weak earnings guidance from some big names, along with soft macro data, seemed to drive the downside pressure. This week’s calendar is much quieter, and retail traders love a good dip. Will next week mark a seventh straight week of all-time highs?
Where do you think the S&P 500 will be next week? |
Daily chart of SPY over 1Y time interval
Other notable market moves since last week:
Volatility (VIX): Spiked as high as 21.90 last week but settled lower on Monday, closing at 17.52 vs. 15.03 the prior Monday
Gold: Up $60 on the week to $3,426
Bonds: Big rally, up 2.4% to 115.9
US dollar: Briefly hit 101.26 but ended the week flat at 98.78 after a sharp Friday selloff
Crude oil: Also made a round trip, touching $70.51 before sliding back to nearly unchanged at $66.29
Bitcoin: Down 2.6% to $115,470 after dipping as low as $112,400
The Week Ahead
Economic Calendar
Consumer Price Index CPI (Tue 8/12 8:30a ET)
Notable Earnings
Not an exhaustive list — just a few I’m watching closely for potential market impact.
On My Radar
The Mag 7 stocks (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla) have powered this market higher. But on Monday, Amazon (AMZN) was the odd one out: it was the only stock in the group to close lower, while five of the others gained more than 2%.
Daily chart of AMZN over 1Y time interval
Amazon traded lower after hours on Thursday during its earnings call. On Friday, it gapped down at the open, sold off further through the late morning session, and remained heavy for most of the day. Although it ticked higher in pre-market trading Monday, the stock ultimately faced strong selling pressure and closed the day down 1.4%.
The $206 level (March 25 high) appears to be significant. It acted as support on both May 12 and June 23. If AMZN continues to slide toward that level, I’ll be watching closely. A bounce could set up a long trade, while a breakdown below could offer a short opportunity. As always, it’s important to consider broader market sentiment and how the other Mag 7 stocks are performing. If the equity market is in “risk-on” mode and the rest of the Mag 7 show bullish momentum, it would make more sense to lean long. The opposite is true on the short side.
With IV rank low (<10), I’d look to use a debit spread for any options trade setup.
What’s Top of Mind
Over the weekend, I caught up on a few newsletters I subscribe to. One in particular, by Jeff Joseph (editorial director of Luckbox magazine), stood out. It was about active versus passive investing, and it really resonated with me. I’ll keep my commentary short so you can read it here yourself, but it was written in response to a Morningstar writer who argued that trying to outperform the market isn’t even worth attempting.
There were several points where I agreed with Joseph, but one line hit me the hardest:
“Even if you're destined to be in the lower 50% of investment performance, the cognitive benefits of active investing make the exercise worthwhile.”
I couldn’t agree more. I absolutely see value in automating certain parts of investing. I’ve automated my 401(k) contributions, dollar-cost averaged into Bitcoin, and reinvested dividends to keep parts of my portfolio on autopilot. But actively trading over the past five years has been one of the best workouts for my brain. I’ve learned to think in probabilities, calculate expected value, and adapt quickly when I’m wrong.
This isn’t to say everyone needs to dive into building discounted cash flow models or spend their nights reading dissertations on the Black-Scholes options pricing model (though props if that’s your thing). But I do think there’s value in challenging yourself intellectually and continuing to level up over time. It doesn’t have to be linear. It just has to be up and to the right.
There are definitely days when my performance lags the market. But I believe I’m still coming out ahead because every trade gives me a new data point to learn from. The goal is to keep sharpening my mind and, ideally, make some money along the way.
I know I don’t have a massive subscriber base (yet), but if you’re here reading this, I know you’re someone who is driven to learn. Whether it’s doing the daily Wordle, finishing a crossword puzzle, or trying a new bootcamp every few years, keep exercising your mind so it doesn’t dull like that kitchen knife you keep meaning to sharpen. Avoid the trap of just going through the motions. Your decisions will get faster and better. And your confidence will grow, too.
Thanks for reading this week!
If something sparked your interest — or you’ve got a hot take of your own — hit reply. I read every email.
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Hitting the Bid content is for informational and entertainment purposes only. The information contained is not, nor is it intended to be, trading or investment advice or a recommendation of any security, futures contract, digital asset or alike. Trading and investing contains risk. All investors should evaluate their own risk tolerance, financial situation, and investment duration before entering any trade or investment.