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

1. New position in XRT.
2. No adjustments are needed today.
3. No positions have exited since the last report.
4. Current status of open campaigns.

Let's dig in!

Island Reversals are few and far between. They don't show up very often.

But when they do....look out!

Here's Meta, the parent company of Faceplant, I mean Facebook, losing a few hundred billion dollars in value since yesterday's close.

I'll say that again, "Losing a few hundred billion dollars in value"....overnight!

From the Desk of Steve Strazza and Alfonso Depablos

The only insider transaction on today’s list is a Form 4 filing by William C. Rhodes.

Rhodes reported the acquisition of 50,000 shares of Regions Financial Corporation $RF at a total cost of approximately $1 million.

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As most of you know, we use 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.

From the Desk of Ian Culley @IanCulley

Did you see the candlestick in the Mexican peso last Friday?

It was all wick!

The way I learned it, you want to trade in the opposite direction of blow-offs like this. 

That means betting on a stronger peso and an end to the stock market correction.

Check out the XXXL lower shadow in the Mexican peso futures (denominated in USD):

Last Friday’s intraday swing spanned six percent and registered the highest single-day ATR reading since March 2020.

Despite the earth-shattering volatility, the bulls prevailed. That’s the critical lesson from last week’s action: The bulls immediately repaired the damage. 

The hangover from the massive ramp in NVIDIA $NVDA is shown pretty clearly in the current premiums in out-of-the-money options.

The big moves -- in both directions -- are still fresh memories for all participants in this stock over the past several months.

This sets up an opportunity to put on a high-probability bet that the range in $NVDA will consolidate a bit here.

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

1. New position in GLD.
2. No adjustments are needed today.
3. Exited ITB and XRT.
4. Current status of open campaigns.

Let's dig in!

From the Desk of Steve Strazza and Alfonso Depablos

The most significant insider transaction on today’s list is a Form 4 filing by Atlas Venture Opportunity Fund.

The hedge fund reported the acquisition of 17,857 shares of Korro Bio Inc $KRRO, equivalent to roughly $1 million.

Stock prices don't move based on "fundamentals".

Prices move based on positioning.

When investors are primarily on one side of a market, the pendulum swings to the other extreme.

One of my heroes John Roque said it best, "We're not in a reversion TO the mean business, we're in a reversion BEYOND the mean business".

In other words, from extremes in positioning, the market doesn't just go back to the average positioning. It tends to continue towards the other extreme.

This is the situation we currently find ourselves in as investors.

The Bitcoin halving has come and gone, and my perspective on it remains unchanged: it was a non-event. Contrary to expectations based on previous cycles, this halving had little impact on Bitcoin's trajectory, which appears more influenced by broader market liquidity conditions. While some may argue for its significance, any effect on the market seems to stem mainly from sentiment rather than fundamental changes in supply or demand.

One sentiment dynamic worth noting is the classic pattern of "buying the rumor, selling the news." However, in the case of the halving, we've witnessed a reversal of this trend. Investors preemptively adjusted their positions leading up to the event, particularly in Bitcoin mining stocks, anticipating the halving's impact on revenues. Surprisingly, instead of selling off after the halving, there has been a notable increase in buying activity, reflecting a shift in sentiment.

This behavior aligns with a fundamental aspect of human psychology: the aversion to uncertainty. Similarly, investors prefer to act when outcomes seem more predictable, hence the recent surge in buying activity post-halving.

This is one of the biggest questions we want to ask ourselves right now.

How many ounces of Silver does it take to buy just 1oz of Gold?

The answer is that it's currently too many.

Here is the Ratio between Gold and Silver, overlaid with a 200-week moving average just to smooth out the data better.

These cookies were made by a member of my Trader’s Meetup group. She brought them to our gathering last night and made plenty to share with everyone.

Where else can one bring cookies with Japanese candlesticks and receive a rousing ovation from all in attendance?

This is how you know you’re with your people.