Aha! moments often occur when we are faced with a problem or a situation that requires us to think outside the box. They can happen when we are struggling to find a solution to a problem, and suddenly, a new idea pops into our heads.

Think about the story of Archimedes, who had an Aha! moment when he saw the water in his bathtub overflow. Suddenly, he realized that the volume of an object can be measured by the amount of water it displaces.

Another example of an Aha! moment is when we finally understand a concept that we have been struggling with for a long time. It can be a concept in mathematics, science, or even in our personal lives. For me, they often happen in my world of trading.

In fact, I would argue that a career spent engaged in trading the markets by definition is a...

From the Desk of Ian Culley @IanCulley

Bonds are taking a breather as stocks recover.

Bond market volatility is cooling off as the banking collapses and the March Fed meeting fade from the front page. 

And it appears the volatility has left big unresolved bases in US Treasuries in its wake…

Let’s dive in!

Check out the US 30-year T-Bond futures carving out a multi-month reversal pattern:

If and when it breaks above 132’18, I’m long with an upside objective of 143’00. Simple!

It’s the most attractive setup due to the bullish momentum regime and clean breakout level – two attributes short-duration bonds lack.

Why? 

Volatility increases further down the curve as the bond market anticipates the Fed’s next move. 

Check out the 10-year T-Note futures:

...

We've adjusted a position in the Paid-to-Play portfolio today:

Today's most significant insider transaction report is a Form 4 filing by Ares Management, which revealed a purchase of roughly $26.4 million in Frontier Communications Parent $FYBR.

The hedge fund now owns 36 million shares, which represents an ownership stake of 14.3%.

From the Desk of Kimmy Sokoloff

We're seeing another gap up in the indices today.

I said on Monday that we could see window-dressing before quarter's end, and that's exactly what's going on.

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn't just end there.

We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey...

From the Desk of Kimmy Sokoloff

The market is trying to push past the 4,000 level on the $SPX.

If we can manage to hold, there's potential up to 4,039, then 4,050.

[9/7: updated stop to 48. We're already #FreeRiding here, so whatever we sell the remaining portion of the position for is pure profit!]

According to "the news," Americans can't afford to buy homes and rising mortgage costs will only deepen the problem.

Cool story, bro.

Do you know what disagrees? The price of virtually every publicly traded homebuilding company. We're already long Lennar and Toll Brothers which continue to work for us.

Next up is KB Homes $KBH, which appears to be on the verge of a big breakout following a welcome response to its recent earnings report.

From the Desk of Ian Culley @IanCulley

Commercial hedgers are taking an interest in the Canadian dollar. 

The CFTC has finally updated its records after the recent data breach.

And, as expected, we have some extreme positioning on our hands…

Check out the chart of Canadian dollar futures with the Commitment of Traders Report (COT) in the lower pane (red line for commercials, black for large speculators, and gray for small speculators):

Commercials hold their largest net-long position since early 2019. Extreme positioning such as this tends to mark key inflection points.

Why?

Because commercial hedgers represent the largest short sellers for any given market. And strong hands move markets.

Bottom line: When commercials get this bulled up on the Canadian dollar, forceful uptrends often follow as they unwind their position.

The stage is set for a rally, but it all comes down to price.

...

We've adjusted a position in the Paid-to-Play portfolio today:

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

You're seeing the permabears pointing to the Equally-weighted S&P500 falling down towards new 52-week lows relative to the Market-cap weighted version.

You can see what's happening here:

Today’s most significant insider transaction report is another Form 4 filing by Warren Buffett’s Berkshire Hathaway $BRK.A for Occidental Petroleum $OXY.

On Monday, Buffett disclosed an additional purchase of OXY shares worth roughly $216 million.

From the Desk of Kimmy Sokoloff

We're seeing a decent-sized gap up this morning.

Now we have to see if the indices hold on to the gap or back and fill.

This is the video recording of the March 29, 2023, Inside Scoop Weekly Strategy Session.

Fresh two-year highs for the Gold/SPX ratio stand out this week, as gold outperforms its alternatives. It doesn't get much more bullish than fresh absolute and relative highs.

With that as our backdrop, I had Jason Perz @JasonP138 of Against All Odds Research on the show to share his view of the precious metals space.

If you’ve tuned in to either of my “Expiring Daily” Twitter spaces talks over the past two Mondays, you’ve heard me talking about a trading strategy I’m currently in the process of iterating that involves daily expiring options in the S&P 500 options complex ($SPY and $SPX options, specifically).

A thoughtful listener sent me an email with a bunch of questions about it, and I thought my answers to him might be enlightening to some of you who may be tinkering with strategy construction, particularly with short-dated, high-gamma options.

As I told the emailer, I can answer questions as of my thinking RIGHT NOW. But please know this is a work-in-process, and I’m continually tweaking my entry/exit/adjustment parameters as I learn more.

Here was our conversation:

From the Desk of Kimmy Sokoloff

The market isn't mustering up the power to trend higher just yet.

I'd like $SPY to hold 392 and hopefully break above 400 in time.

From the Desk of Ian Culley @IanCulley

Money flows to where it’s treated best.

That’s the foundational premise of relative strength studies. 

Remember, we always want to buy the strongest and sell the weakest. It sounds simple. But it’s impossible to overstate its importance.

One of the best ways to increase our probability of success is to buy assets that are trending higher on absolute terms while outperforming their alternatives.

Those are key ingredients of a strong uptrend. And it just so happens that gold checks both boxes…