Labor Day weekend is in the rearview mirror, which means one thing: summer trading season is officially over.
Whether summer trading was good or bad for you, it's time to put away the beach reads and dust off those scanners because we're about to enter what could be the most explosive part of the year.
Here's what I'm seeing: while everyone spent August obsessing over Jackson Hole speeches, geopolitical headlines, and whether the Fed will cut 25 or 50 basis points, something interesting was happening beneath the surface. Quality stocks were quietly building bases. Not the flashy, meme-worthy moves that grab headlines, but the steady, methodical consolidations that often precede major breakouts.
And here's my contrarian take: I think we're setting up for a performance chase that could send markets significantly higher than most people expect.
Why?
Because too many fund managers are sitting on cash, sentiment polls are far too bearish for an environment where stock indices are at or near all-time highs, and fourth-quarter performance reviews have a funny way of making people do desperate things.
Look, I get it. It's tempting to trade the headlines. Middle East/Russia/China tensions, election uncertainty, inflation data – there's always something to worry about. But here's what 27+ years in this business has taught me: price is truth, everything else is noise.
The market doesn't care about your political opinions or mine. It doesn't care about what some talking head thinks should happen. It only cares about supply and demand, buying and selling, fear and greed.
My radar is locked onto stocks and sectors that showed relative strength during the summer doldrums. These are the names that held their ground while others wilted, quietly building launching pads for what could be spectacular moves higher.
Think about it: earnings season is approaching fast (again!). Companies that have been coiling up all summer, sitting just below resistance levels, could explode higher on even decent results.
And in a performance chase environment? Good luck trying to chase those moves without proper positioning.
The beauty of options in this setup is obvious – we can structure trades with defined risk but unlimited upside potential. While everyone else is debating whether we'll see a "soft landing" or a "no landing," we'll be positioned to profit from the actual moves.
Summer trading was the warm-up act.
September through December? That's when the real money gets made (or lost). This is when hedge funds either salvage their year or blow up trying. When pension funds rebalance. When retail traders who sat out the summer FOMO back in at exactly the wrong time.
But here's the thing – you don't have to be one of those late-to-the-party traders scrambling to catch up.
The smart money positions before the fireworks begin.
Ready to turn this market setup into profits? There honestly hasn't been a better time to join the All Star Options community. You'll get detailed trading plans for setups exactly like these, access to our member chat room where we share real-time insights, access to an on-demand educational video series for options trading, and weekly video strategy sessions where I break down the week that was, update stops on positions, and discuss the latest trade entries.
The performance chase is coming. The question is: will you be positioned for it, or watching from the sidelines?
Trade smart, trade safe, and let's make some money.
Sean McLaughlin | Chief Options Strategist, All Star Charts
