It’s common practice to follow the major stock market indexes to get clues into what kind of market environment we’re in.

This is important because when considering trades to put on, I would be better served if my next idea aligned with the current market trend and volatility profile.

But sometimes, the market (as one defines it – could be “the S&P 500” or “the Dow” or “the Nasdaq”) isn’t giving me anything conclusive to make a firm decision against. I’m getting mixed signals. This is common.

One way I have found to get a better indication of the market environment is to simply use my own portfolio as a guide.

Steve Strazza brought up charts of the energy, materials, and commodities sectors on today's Flow Show. These are "peer indexes," meaning they often trend together.

And the current trends suggest we need to add more bullish positions in these areas.

The one name that stood out the most was Freeport McMoRan $FCX:

But given the run we've already seen here, we need to allow for the possibility of some digestion which may put a governor on the speed on any breakouts from here.

To position ourselves for this possibility, we're going to utilize a Call Calendar spread.

Here's the Play:

We put on a bullish bet in biotechs a couple of weeks ago and it quickly rolled over on us. The market had other ideas.

Now here we are, a couple of weeks later, and the biotech ETF $XBI finds itself mired in a range with rising implied volatility signaling elevated options premiums:

We're getting into Squeeze Season.

The stock market (as measured by the indexes) continues to trek higher, speculative fervor keeps building (as measured by what's happening in crypto), and these forces are combining to make it a dangerous environment to be caught short in.

And if you're short a name that already has a high short interest? Look out!

So naturally, today's trade is a play on punishing the stubborn shorts in a particular stock that look like they are on the verge of getting epically squeezed.

In today's Flow Show on Stock Market TV, me and Strazza get into why we love buying short-dated calls in Carvana $CVNA:

And here's the chart that we are leaning into:

Here's the Play:

The majority of my current open positions are long-biased. If the market continues to rise, I expect many of these positions to keep working for me.

My few short-delta positions are on the verge of stopping me out for a loss. They were put on as portfolio hedges against all my long exposure. So in a way, I’m happy they haven’t worked out.

That’s the thing about hedges. I don’t really want them to work. Because that means the positions I really want to work likely just got whacked.

Ok, so my hedges aren’t making me money and my long positions are. What else can I do to lock in gains and minimize the potential for giving back a lot of open profits?

Today's trade is in a name that doesn't need Wall Street.

They crush their little corner of the world, operating in the midwest. They do not need to raise money or any exotic financing. Because of this, the company is completely off Wall Street's radar. This means very few (if any?) analysts cover it. Nobody is publishing research reports on it. Essentially, there just isn't anyone talking about it.

Around here, we call these "Eddy Elfenbein stocks." Stocks that are steady dividend payers, operating excellently in obscurity, providing a product or service that so many people use that they don't even realize they are using it.

On today's Flow Show, me and Steve Strazza put our heads together to follow the wave into the Steel sector.

Sector trends are showing us where capital is flowing and that led us to a trade idea in steel manufacturing company Reliance Inc $RS.

Here's the chart highlighting a high consolidation that often portends to rapid near term price acceleration:

For those of us who are comfortable with risking higher dollar amounts in trades, I'd be a straight buyer of the September 350 calls.

But I prefer keeping my costs a little lower per unit of risk, so I'll be employing a call spread here to express our bullish opinion.

Here's the Play:

So we're going to fix that.

And here's why:

It’s the perfect environment to buy mining stocks following gold’s breakout.

The plan is simple: Buy the strongest names on absolute and relative terms – if and when they trade above our risk levels.

That is from my Commodities Analyst Ian Cully in a recent post about the Gold sector.

Today's trade is in a mining name that is above the risk levels, signaling its time to get involved.

I received a great, and well-meaning question from a new All Star Options subscriber about a recent trade we entered in $VLO that offers a great lesson or reminder to those who need it.

Question:

What...

One sector that I feel a bit underexposed to right now is real estate -- particularly REITs. And when a dominant player in New York City's commercial real estate sector pops up in our scans with a beautiful chart, it feels to me like this one might be set to surprise a lot of people.

Every once in a while, I’ll put on what I call “all or nothing” trades.

What this means in practice is that I’ll put on a defined risk options trade knowing full well that the trade is either going to net a profit, or it’s going to be a zero – a full loss of invested capital. There’s no in-between.

Usually, this happens because I love a setup, but the price level on the chart that would invalidate my thesis is pretty far away. If we get there, it’s more than likely that whatever premium I paid to enter the trade will have nearly evaporated. There will be nothing left to sell, even if I want to.

Two trades with March expiration options have concluded for me this week that demonstrate the yin and yang of these types of trades.

On Feb. 14, I put on a bearish bet in Hormel Foods $HRL. I bought the March 25 puts for 15 cents. This trade was put on at a time when I was looking to add some bearish exposure to my portfolio to help balance out the heavy long exposure I had in other...

Steve Strazza and I hosted another Flow Show today on Stock Market TV and discussed opportunities in the Biotech space.

Starting at an index level, we see that biotechs are clearing a base and appear set on breaking out:

From there, we started diving into some individual biotech names to play the breakout, but many of the charts offered unique challenges that made it tricky to pick one to take the most advantage or the sector breakout.

So when that happens, sometimes the best move is simply to buy the index!

And that's what we're going to do here, using the sector ETF $XBI as a vehicle for expressing our bet.

Here's the Play: