[12/4: updated stop to 250]

It feels like whatever items have been holding the broader markets back are falling by the wayside one by one, clearing the path to the next leg higher in this bull market.

And with volatility (as measured by $VIX) making new yearly lows, it's getting more affordable to make a bullish play with simple long call option trades.

So we're going to do just that!

My spidey senses are beginning to tingle with speculative fervor.

What we're seeing in the AI space as well as in the comeback in cryptocurrencies as of late has me thinking speculative players are soon to begin widening their net to capture alpha.

And some of these highly shorted equities with crypto exposure could be extremely ripe for short squeezes.

High on this list is Marathon Digital Holdings $MARA. It currently has in the neighborhood of 40% of its outstanding shares held in short positions. That is some major fuel for a short-covering rally if this stock starts ripping.

Here are a bunch of pictures illuminating why we think $MARA might be set up for a run higher. First up, the $MARA chart:

It's not going to be finished in my lifetime or in yours or my kids' or grandkids'. That's not the point. The point is to get it started.

~ Korczak Ziolkowski

Last weekend, I took a little six-hour road trip to South Dakota to spend a full day hiking in Badlands National Park. It was amazing. The landscape is stunning and challenging to describe. It’s not quite desert. It’s not quite grassland. It’s not quite mountainous. It’s remote. Some have likened it to a moonscape. But even that doesn’t quite capture it.

You just have to go and experience it for yourself. Trust me – it’s worth it.

I also took advantage of my proximity to Mt. Rushmore to arrive at 7 a.m. the next day. I was one of the only people in the park and was lucky to have Mt. Rushmore to myself for the better part of an hour.

As amazing as Mt. Rushmore is, being there alone on a bright, sunny morning – just me, the birds, and a cup of coffee – was truly surreal. If you ever get a chance to visit the Mt. Rushmore monument, it’s worth getting there early ahead of the crowds.

I'm continuing with my recent bent of positioning carefully in speculative names that have the potential to rip if the market resolves higher out of this Washington nonsense.

Today's trade is in a name that is showing signs of squeezing higher. It just needs a spark.

Let's get right to it.

I’m a serial tinkerer with trading strategies, particularly in index options trading. In most cases, I’ll start with a simple concept and iterate from lessons learned along the way.

Each iteration is done with good intentions as I’m finding holes in the process and trying to fill them as I go along. I’m like a deckhand moving around the boat, patching small leaks with spackle.

This goes on for a while. And it happens slowly. But like compound interest, it grows stealthily… then mightily.

Unfortunately, I too often find myself in a situation where my PnL is going the wrong way and I’m suddenly handcuffed because I’ve created too many patchwork rules that are doing nothing now but causing confusion and slowing me down.

Then, frustration sets in.

Headlines.

We all read them and they mess with our heads. It takes steadfast resolve to listen to the message of price action when everything else we read tries to trick us into doing the wrong thing.

The best way to keep ourselves level-headed when taking risks is to define that risk and trade small. There are few things more powerful than knowing with complete certainty the most I can lose, no matter what the market throws at me.

With this in mind, we're putting on a trade today in a stock that has the potential to be a real highflier if the markets stabilize and head higher following any Washington drama while limiting our risk in case we're early or wrong.

It's a bull market, in case you haven't heard.

As such, I'm on the hunt for alpha. I'm looking for stocks that might be off the radar, but can have outsized moves when the market runs.

Today's trade offers this potential in spades.

[9/7: stop moved to 260. We're already #FreeRiding on this one. So whatever we sell the remaining position for is pure profit!]

Today's trade leans against a significant support level that we believe will hold. But because the stock is at such a delicate level where it could quickly collapse on us if the level doesn't hold, we're going to keep the play simple and cleanly define our risks.

A picture is worth a thousand words, so here's the chart of Caterpillar $CAT that's got our attention:

[9/28: updated our stop to $34]

I'm filing today's trade under the category of "Hard Trades." Not because it's particularly hard to execute or because it's a complicated multi-legged spread. It won't require an excessive amount of margin to get positioned nor is there any risk of unlimited losses.

It's hard because people might look at the trading action of the past few days and think that it's "gone too far" and "I should wait for a pullback."

And traders who think that way may be right.

But here's the thing: sometimes the best trades to get into are the best precisely because they are the "hardest" to pull the trigger on. And that's where our opportunity is. Those of us who fight through the conventional wisdom of average traders and get positioned ahead of the crowd will be lifted later on by those same traders who were "waiting for a pullback" and put an ever-rising bid underneath our stock that fuels our future gains.

Today's trade might be one of those setups.

[9/7: updated stop to 180. We're already #FreeRiding, so whatever we sell for is pure profit!]

It's time for the small caps to make a stand. The time is now. If they don't, it could be 'goodnight' for a long time.

JC posted earlier this week about the Russell 200 index and had this to say:

We’re back to a key level of interest for Small-caps on an absolute basis. And we’re back down to historic levels relative to Large-caps. The chart tells a very powerful story.

I’m a buyer down here.

If the Russell2000 is above last Summer’s lows, I will be long the $IWM ETF. I also think there will be plenty of opportunities this summer in small-cap stocks.

We talked about $IWM internally this morning and I suggested a good, levered way to play this thesis while honoring a nearby risk management level that will get us out of the trade without much pain if we're wrong.

But first, here's the chart of $IWM: