While I prefer to let stocks prove themselves to me before taking a position, sometimes a situation sets up where the stars are aligning for a low risk bet that makes it worth the effort to get ahead of the crowd.

One such situation has developed in a name discussed recently in our Hall of Famers report.

We've experienced a pretty powerful bear market rally on the heels of yesterday's Federal Reserve interest rates announcement. Whether or not it sticks is anybody's guess. But one name in the financials space has stood out for its relative lack of participation in the recent rally off the bear market lows.

Stocks like these are the ones we want to leverage into bearish portfolio hedges. So let's get right to it.

Ok, maybe that title is a little dramatic. I couldn't help myself. I recently had a conversation with a trader friend who was dunking on Gold Bugs about the lack of income stream from Gold. It's just a damn rock! he said.

Anyway, I don't have any strong opinions about Gold either way. I just like to follow price and volatility. And right now, the options market may be offering us a tempting opportunity to collect some premium as the recent gold selloff has spooked the gold bulls a little bit.

The latest Quarterly Playbook is out, which has given us a bunch of ideas to begin exploring.

One idea stood out for me in particular because of a recent pullback offering a good entry point. It's in a bellwether dividend-paying stock that we wouldn't mind owning for the long term, but we're going to take advantage of elevated options premiums to leverage into a high-probability bet for some opportunistic income.

Feels like market conditions are improving a bit for the bulls, but we're still going to be picky here. One way we can improve our odds of success is to align our trades with relative strength.

Today's trade is in a sector that has seen both improving absolute price strength, and a widening relative strength gap compared to the broader stock market.

That's a blog post title I never thought I'd write. LOL.

Even more strange, the trade we're putting on today is in a public company with an unusual name I've never heard of before!

Weird times, indeed.

Steve Strazza and I looked at it a bit on Tuesday during our "Flow Show" on twitter and I was less than enthusiastic at the time. But as the trade has marinated around my brain a little bit since then, it has grown on me.

Volatility still remains relatively high across the board, with this morning's trading action further boosting it.

I'm on the hunt for some delta-neutral, short-premium plays to take advantage of this environment. But the trick is finding an instrument that is showing signs of potential range-bound action. Too many of my go-to sector ETFs are trending (mostly lower) and trends are the enemy of delta-neutral strategies.

I had to dig a little, but I think I found the right instrument for us to earn some options premium in.

As Strazza mentioned in our Telegram live chat this morning: "Not too many charts look as good as this one right now."

It feels hard to comprehend that we're finding leadership in Chinese tech, internet, and auto stocks, but it's happening. Politicians lie. Prices don't.

And one name we've got an eye on has been coiling in an extremely bullish high flag pattern.

We've seen some bullish thrusts in sectors with ties to the medical and healthcare spaces, and if the broader market has designs on moving higher deeper into the summer, we think leaders will continue to emerge from this area.

Today's trade is a bet on one of those next leaders.

On both an absolute and a relative basis, healthcare names continue to perform. I guess the need for quality healthcare is a stronger driver of stock prices than interest rates and global macro? At least for now, that appears to be the case.

One name we've been watching, Cigna $CI, is knocking on the door of a major base breakout.

The title of this post is a takeoff from one of my favorite ongoing SouthPark bits involving our friendly Canadian neighbors :)

There seem to be better bearish setups on my radar than bullish ones. This makes sense as I prefer to trade with trends and the overall stock market trend in 2022 has been down. Ballsier traders than me like to step in and "buy the dip." But I'd rather let the market prove itself to me first.

One of the most beaten-down sectors has been tech stocks. Steve Strazza summed up this sector with one word: "Awful." Yeah.

The stock in my crosshairs today comes from this area.

Internally, we were talking yesterday about the energy space and the recent pullback in prices. While still the strongest sector in the market in 2022, this move off the highs has been notable.

Is the trend over? Or was that just the "hot money" taking profits?

I'm not sure we have a definitive answer to that question yet. It looks to me that the market is still sorting that out. And this condition of indecision, coupled with high implied volatility priced into options is combining into a nice opportunity to collect some options premium while energy figures itself out.

So we're going to wade into the energy pool with a delta-neutral short-premium options trade.