The market is a very tricky spot with plenty of "stop signs" telling us to play defense.

So I wanted to chime in with a strategy update, and explain why we're being careful.

The SPX/QQQ failed to sustain their record highs and turned south fast.

Plus there is lots of damage below the surface.

The SPX is about -3% off the highs.

But the average stock in the index is down -16%.

Since the index is market-cap weighted, it's been held up artificially by a few giant stocks like Apple (AAPL).

Countless key growth names like Palantir (PLTR) and Applovin (APP) have been taken to the woodshed.

Crypto is a big problem with Bitcoin and Ethereum taking major hits, which shows there's not much appetite for risk assets.

Amazon (AMZN) was a clear signal that tech was in trouble so I'm glad we listened.

The problem now is that the market's already looking weak headed into two pivotal news event.

The first is Nvidia (NVDA) earnings after the close tomorrow. I'm not looking to play it with options because there's a good chance they disappoint. And of course that could throw an even bigger wet blanket on tech.

And on Friday we have the PCE Price Index. The market looked past hot CPI & PPI prints... but I'm not sure we'll go 3 for 3 in that regard.

So that's why I'll be extra careful in selecting new ideas.

Remember, there are times when I'll send 2 new plays per week, but this is not the time for that.

Thankfully, we shifted gears away from market stocks that need the indices to rally.

Our current names are under pressure, but most of them still have time to work out, and they have individual catalysts.

Think defense first, offense second.

When that changes, I'll let you know.

-Scott