The short puts we entered on $SPY on Monday hit our profit target today and we are out. Profit target hit in under 4 trading days. We’ll take it!

Meanwhile, the $FCX Bullish Risk Reversal we entered yesterday has quickly moved in our direction.

I’m not one to look a gift horse in the mouth, so I’m going to take this opportunity to remove the risk from the trade.

For details on the trade, you can review it here. In short, we sold naked short puts to pay for the cost of our long calls. Thanks to today’s move, we’re able to sell some of our calls to pay for closing our entire naked short puts position. And we did that today… 

Just like that, Bitcoin reclaimed its September highs!

In a report a few weeks ago, we outlined:

Derivative speculators are bearish, while long-term spot investors are continuing their accumulation. These are fertile grounds for a powerful disbelief rally that can trap bears.

We've seen this play out over the last few weeks, and yesterday's action only confirmed our suspicions, where there was a notable short squeeze that drove a $3,000 move in the space of a few minutes.

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Willie Delwiche.

With our latest Weight of the Evidence Dashboard improving and now signaling a neutral stance, we have put cash to work across our portfolios to reflect a more balanced approach.

During today's internal Analyst Call, JC asked me what I was looking at for a trade today.

I mentioned I hadn't fully fleshed it out yet, but whatever I did would likely involve selling premium. With the $VIX hovering around 24 at the time, it felt like the edge was on the side of the premium sellers.

At this point, Steve Strazza piped in that he liked Freeport McMoran $FCX as a likely candidate for a bounce here. And then JC got excited about the idea of a bullish Risk Reversal spread to express this idea.

Selling elevated puts premium to offset the cost of a long call position? Yes... I liked the sound of that.

From the desk of Willie Delwiche.

Key Takeaway: The risks associated with excessive optimism are no longer present as bulls are in full retreat. Recent spikes in volatility and downside pressure on price have ushered in an atmosphere of caution.Though we haven’t reached levels of fear or pessimism indicative of a complete unwind, active equity managers reducing their exposure to 55% and the II bull-bear spread at its lowest level since May 2020 speaks to a healthy reset. Relentless equity ETF inflows, elevated valuations, and slowing earnings growth all point to increased risks over longer timeframes. However, we are seeing early signs of opportunity re-entering the market from a tactical and cyclical perspective.

Sentiment Report Chart of the Week: Fade the flows

Equity ETF inflows continued in September (16 months in a row) while commodities remain an unloved asset class from an ETF flow perspective. The equity space certainly looks crowded from a longer-term perspective. Weekly data...

On this episode of the podcast, Steve Strazza and I sit down with Brian G, who many of you will recognize as @AlphaCharts on Twitter.

I've been following Brian for many years and love a lot of the work he puts out. It was really fun hearing his story about how he became a technician.

It isn't something that happens overnight, that's for sure. It's a process.

First we get into the evolution of become a Technical Analyst, and then we dive into what we're doing about it in the current environment.

Hope you enjoy!

In markets, there are certain groups we want to completely avoid.

Permabears, gold bugs, and the "doom and gloomers" are great examples of what not to be.

These are people who project their political and philosophical views onto the market rather than using the market as a way to make money.

When we're dealing with cryptocurrencies, deciding who we listen to is incredibly important. Cults like the laser eye people, religious followings of altcoins, and of course, the dreaded Bitcoin maxi are all in the business of fueling their internal confirmation biases.

For those unfamiliar with the nomenclature, Bitcoin maximalists believe that Bitcoin is the only cryptocurrency that matters, while everything else is worthless. Similar to the gold and silver crowd, these people will only buy Bitcoin and nothing else.

I find it hilarious that Maxi's will criticize those in traditional markets for missing out on alpha, but they won't buy a single altcoin, which is ironic because Bitcoin's share of the asset class has dwindled lower and lower over the years.

The alpha within crypto has been down the cap scale in smart contracts, defi,...

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

We held our October Monthly Strategy Session last night. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month. 

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The US dollar marches to the beat of its own drum.

Interest rates are rising across the curve, sparking strength out of economically sensitive areas within stocks and commodities.

Crude oil and the energy-heavy CRB Index are breaking to new six-year highs and the energy sector SPDR is testing a crucial area of former support turned resistance -- all while the US Dollar Index is catching a bid. 

It’s not every day we see the dollar and commodities rally in tandem.

This environment suggests the dollar should be rolling over or chopping sideways at best. Yet it continues to show strength!

When markets don’t do "what they should,” that’s valuable information. And in this case, it raises some important questions.

How often does the historically inverse correlation between the dollar...

From the desk of Willie Delwiche.