When I was reviewing my open positions this morning, I couldn’t help but have the feeling that all good runs must eventually come to an end. Everything goes through cycles.

As I was doing post-mortems on winning trades that recently closed, and updating stops on winning trends I’m continuing to ride, a feeling of foreboding hit me that this run feels “too good to be true.”

This isn’t necessarily true, but it has felt like any long trade I’ve put on recently was destined to be a winner. If I’m not careful, I can easily cross the chasm into blind overconfidence. That’s where most trouble starts. Certainly for me, anyway.

In the near future, I’ll probably be looking for less aggressively bullish bets. And the ones I choose will likely require longer timeframes to play out. Meanwhile, I’m beginning to favor some delta-neutral credit spreads wherever I can find favorable setups.

I touch upon this and much more in this week’s Options Jam Session:

From the Desk of Ian Culley @IanCulley

Can we all give the rate cut debate a break?

Everyone is obsessing over the Fed’s rate cut plans. Meanwhile, interest rates are climbing to their highest level since early December.

Instead of following Fed gossip and what-ifs, focus on what is: Yields continue to creep higher as inflationary assets rip.

Check out our Global Benchmark Rate Composite, an equal-weight basket of Developed Market 10-year yields (Germany, UK, Canada, France, Italy, Spain, Switzerland, Japan, Australia, and the US):

Our global composite is holding well above the lower bounds of a yearlong range, catching toward the underside of a flat 200-day moving average. 

Yields on sovereign debt show no signs of an imminent collapse.

Could rates roll over in the coming quarters? Absolutely! 

But the data fails to support a falling interest rate thesis. In fact, the charts suggest quite the opposite…

...

The energy sector is looking poised to break into uncharted territory, and we too are going to break some new ground by doing an options trade we've never done before in ASO.

Calling it a "trade" might even feel a little off, considering the timeframe of this one. It might be more accurate to call it an investment. Compared to most trades we do, this one has the potential to certainly feel like one.

In today's Daily Digest, we'll review:

1. New position in SMH (semiconductors).
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.

Let's dig in!

From the Desk of Steve Strazza and Alfonso Depablos

The largest insider buy on today’s list comes via a Form 4 filing by Edward J. Casey, Jr., director of Flowers Foods Inc $FLO.

Casey reported a purchase of $117,750 in FLO shares.

You already know me very well.

When do I ever talk about the potential for a 30x return?

The answer is never.

It's just not in my DNA.

This is not how I approach the market. This is not how I like to talk. And quite frankly, I usually laugh at those who do.

That's the truth.

But every now and than, but almost never, an opportunity presents itself that we rarely see in markets.

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports...

We also highlight lagging stocks on a recurring basis.

Welcome to the Short Report.

We publish this...

Are we due for the pause that refreshes?

If so, what sector is likely to remain mired in a range?

For my money, this chart seems as good as any candidate for continued sideways, sloppy trading action...

In today's Daily Digest, we'll review:

1. New position in XLV (healthcare).
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.

Let's dig in!

You didn't fall for those lies about falling interest rates did you?

At this point, it's 2024.

We know for a fact that Wall Street banks are not here to help you or tell you the truth. That's not the business they're in.

The Financial Media has never been in the business of telling you the truth, so that's nothing new.

But the fact that they've been telling you all year that interest rates are going lower is hilarious.

None of these groups of people are here to help you. They're only here to help themselves.

And that's fine. There's nothing wrong with a Bank trying to profit for their shareholders. Just like there's nothing wrong with a media business trying to profit for their respective parent companies.

Profits are good.

Just don't think for one second that they're going to put your needs ahead of...

From the Desk of Steve Strazza and Alfonso Depablos

The largest insider buy on today’s list comes via a Form 4 filing by the CFO of Dollar Tree Inc $DLTR, Jeffrey A. Davis.

Davis reported a purchase of 1,800 DLTR shares, equivalent to $244,794.

The "chopsolidation" continues.

Today's note is going to be brief, and this is reflective of the tape we're in.