A very happy Sunday to you,
I'm fantastic at calling market bottoms…but…
I'm AWFUL at trading the drop until we hit that point.
Back in 2020, I decimated my accounts between February and March. I did the same thing through most of 2022.
This time, I'm doing things differently. And it doesn't involve a single chart.
Crazy, right?
But if I've learned anything from Don Kaufman, it's the line between insanity and genius is thinner than his receding hairline.
Last week, Don broke down his 0DTE strategy. And for all the talk of what it CAN do for you, most of you probably missed the very thing that got me hooked…
…THE MATH!
Look, we've all stared at the same charts and come to different conclusions. That's the 'art' part of trading.
You know what has none of that hocus pocus? Math. Spefiically expected moves.
It's incredible that with just a little bit of knowledge you can trade without ever looking at a chart.
And I don't know about you, but that has a TON of appeal to me.
Yes, Don is holding another session this Tuesday at 1PM EST.
Yes, I want you to show up.
But I want you to look at it with a fresh set of eyes.
Think about how it's entirely possible to act like a casino. Not in the shaking down old people at Canasta tables variety.
But the ability to create a mathematical edge that can generate real returns over time.
Will it win every time? Nope. That's silly.
However, if you size correctly and let the Law of Large Numbers work in your favor, then just maybe, you'll find the thing that's got a smile on my face during this downturn.
Jordan Schneir
Editorial Director, TheoTRADE
Don Kaufman: $5.7 trillion expires today. Not in the morning. At the close.
$5.7 trillion expires today. Not at the open.
Not a typo. $5.7 trillion in options contracts clear today. Roughly $2 trillion hit at the morning open when the SPX AM settlement fired, and the rest rolls off at today's close.
Most traders spent the morning watching oil prices and reading headlines about Iran.
Here is what was actually running the tape.
When options expire, the firms that sold those contracts have to constantly adjust their stock positions to stay hedged. Those firms are called market makers.
They are the ones on the other side of every options trade you place.
They do not take directional bets. They stay neutral.
And staying neutral means constantly buying and selling stock as the market moves.
Here is why today was different from any normal expiration.
CLICK HERE to continue reading Don's article.
Brandon Chapman: How I Cracked the Private Credit Crisis
The private credit market is unraveling, and the contagion is spreading to investment-grade bonds.
Redemption gates are going up across the biggest names in private credit. Blackstone, Blue Owl, BlackRock, and Morgan Stanley have all restricted withdrawals in recent weeks.
Default rates in private credit have reached 9.2% according to Fitch. That is more than double the rate in the broadly syndicated loan market.
That stress does not stay contained. It bleeds into public credit markets, and the options flow is already pricing it in.
Most traders are focused on oil prices and tariff headlines. The institutional money is watching something else entirely.
The Block Hunter Console flagged 20,000 put contracts bought in LQD today in a single print. LQD tracks U.S. investment-grade corporate bonds.
The strike was $102 for April 17 expiration, and the trade was not a roll. Someone stepped into the market and bought downside protection on corporate credit while the rest of the market was watching equities sell off.
I'm going to break down how the private credit crisis creates a tradeable opportunity in public credit. Then we'll look at what the 20,000-contract LQD print reveals about institutional timing.
And finally, how to structure a position around the level where this inventory is sitting.
CLICK HERE to continue reading Brandon's article.
Gianni Di Poce: Inflation Up, Metals Down. Here's What Really Happened.
The inflation trade keeps running hot. Energy stocks are printing money.
Even a pullback in crude oil would not change that. Bullish momentum in energy is here to stay.
But precious metals caught my attention this past week. Gold and silver both dropped to their lowest levels since early February.
This happened while the market prices in higher inflation ahead.
That goes against the prevailing narrative. Metals are supposed to hedge inflation.
I am going to break down what really happened. I will explain why the selling was likely forced and how this pullback is setting up the next bullish opportunity.
CLICK HERE to continue reading Gianni's article.
Jeff Bierman: I Walked Into a Room of Programmers and Changed How Stops Work Forever
I spent this entire week on one subject. Stop losses.
Five straight days:
- Gravity points
- Channels
- Moving averages
- Integers
- Percentage losses.
Every method I have used across 39 years of trading.
But, I saved the best for last.
On Friday, I told members a story most of them had never heard. It goes back to my days as chief market technician at ThinkOrSwim.
Years back, I walked into a room of brilliant Russian programmers from St. Petersburg and pitched them an idea that changed how retail traders protect their money.
The tool we built together is still inside the most popular charting platform in the world. Nine out of ten traders have no idea it exists.
And it changed everything…
CLICK HERE to continue reading Jeff's article.
Tony Rago: Why I Don't Short the Lows
Thursday morning was ugly.
Gold had dropped over $300...crude was spiking…the NQ gapped down so hard that the first two-minute candle printed a 100-handle bar.
The entire week's rally, the roll gap fill, the push toward 25,000, all of it evaporated overnight.
A trader in the chat named Matthew wanted to get aggressively short.
The 200-day was failing. The weekly chart was cracking. Put a big short on.
"I don't disagree with you, Matthew. Not trying to argue with you, but I don't short the lows. I don't think putting a big old short on here is the way to go."
Ten years of trading the NQ at TheoTrade, and that rule has never changed.
Here's why…
CLICK HERE to continue reading Tony's article.
Blake Young: The Count of Monte Cristo Would Have Blown Up His Trading Account
One of my favorite books of all time is The Count of Monte Cristo. I love the story so much that I even enjoy the 2002 film adaptation.
I'll be honest, though. The movie loses a bit of its magic for me because of what it cuts out.
The changes Hollywood made trimmed away the very heart of what Dumas was trying to say. If you've only seen the movie, you've gotten a great action story but missed the deeper message entirely.
The book isn't just about revenge. It's about what revenge does to the person chasing it.
Edmond Dantès had everything a young man could hope for: a bright future, a woman he loved, and the world at his feet. Then the people closest to him took it all away with a lie.
He was thrown into prison and left to rot. When he finally escaped, he came out the other side as someone almost unrecognizable.
The Count of Monte Cristo was wealthy beyond measure and laser-focused on one thing. He wanted to make everyone who wronged him pay.
He dismantled reputations, destroyed families, and manipulated people like pieces on a chess board. Dumas doesn't let him off the hook easily.
Along the way, children were hurt and innocent bystanders got caught in the wreckage. Dantès had to sit with the uncomfortable reality that his pursuit of justice had quietly turned into something darker.
He got what he wanted. It cost him far more than he ever planned to spend.
It's a story that has stuck with me. I find myself thinking about it in places you might not expect, like when I'm watching traders make the same mistake Dantès did.
CLICK HERE to continue reading Blake's article.
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