I’ll never forget the first time I saw it. 

It was a Friday. I had the day off from my “day job” as an engineer, and I was trading the markets during a once-in-a-generation crash.

I hadn’t learned my lesson about how financial media operates. I had CNBC up on my TV.

And there it was. A level of financial noise I couldn’t fathom.

The Octobox.

Eight talking heads, all at the same time, trying to dissect the most recent piece of terrible news that hit the market.

Nobody got it right, and the fear truly was on everyone’s faces. It wasn’t just a bear market – it was a full blown credit crunch.

And I think we were a week or so away from a liquidity crisis, where people couldn’t access the capital in their money market accounts.

Of course, the Octobox never helped me in any way… until I discovered a different kind of signal.

Once we were on the other side of the crash, there would be a few times a year where the market would get a little scary… and they would dust off the old Octobox and let eight pundits duke it out about how terrible things were.

I found that if I noticed Octobox came out, the market would bottom just a few days later.

Placing a bet that the market will bottom is never an easy task. And today, unlike the Octobox, I’m going to give you some useful pointers.

How Markets Tank – Looking at the Stock and Option Markets

Around 2018, the market started to change the way it traded. More market participants were actively trading options as a way to get exposure to the market.

If you get enough option trades, they can easily overwhelm the rest of the market. 

There were two big selloffs in 2018 that proved it:

There are a few dynamics with a big pullback:

Inventory gets stuck. The market trades in a range and gives new buyers false hope with a recent trend. 

In this case– the AI revolution in the semiconductor space. That narrative started six months ago, and if you’re late to the party you will be left with the bill.

That’s exactly what happened in the Nasdaq 100 recently:

Once you get enough new buyers at bad prices, then the market can start to weaken.

This is where the option players step in. When you have a “boring” market, there are traders who love to step in and sell volatility. They can do this by selling puts, going long SVXY, or some other combination.

When we see a liquidity break, all of the positioning starts to panic– both the stock and option holders. You’ll see a rush for puts and protection, leading to a spike in the VIX:

As the market sells off, option prices go up as the price for insurance rises. 

This forces a second cascade of sellers who have to reduce their risk as volatility just explodes. 

This is where it gets fun.

How to Trade Out of a Market Selloff

There’s one other interesting options trade that starts to happen.

As the market sells off, you will also see calls starting to be sold against assets. These are institutions and larger market participants who want to try and pay for some of their protection by selling calls.

You also see any kind of speculation to the upside go away, which leads to a drop in the buyers of the market.

That means calls start to get cheap. Dirt cheap.

So cheap that you don’t even have to nail the exact bottom, because they are so underpriced any small bounce will be worth a solid amount.

Here’s the catch though: the “sweet spot” for the best options to buy out of a bottom won’t be found on short term options.

There’s too many players at those distorting prices, and you want to hold on for a longer timeframe.

You also want to avoid “at the money” options, because that’s not where you get the best bang for your buck.

If you’re trying to play for a bounce in the market, my focus is always on “out of the money” options that are between 45 and 75 days to expiration.

Let’s take an example on the SPY, which I think is close to a short term bottom, although I’m not certain this will be the lowest price we trade for the rest of the year.

Those two zones I’ve marked are where the liquidity is. These liquidity zones often act as magnets. If the S&P 500 were to bounce, I would expect at least a retest of 509, and even a stretch back into the big zone up at 514.

So instead of risking more capital and owning less convexity by purchasing the 495 calls, I would be targeting the 510 calls and trading around them.

This can only work if you know where the market is going to run into, and the only way I’ve found to do that is to use my Trading Roadmap, just like the one I showed in the chart above.

I’ve also got a full hour-long training video on the Roadmap and how we use it to find serious market opportunities – you can watch it completely free right here.

Back in 2002 I went on study abroad to Australia.

Not the cool, hip part of Australia with beaches and bikinis… 

Instead I went about six hours inland to a small town surrounded by sheep farms. 

To say it was a culture shock is an understatement… a kid from Florida went to the Australian equivalent of Kansas.

The field trips were fun. One time we drove a few hours to a gold mine – the very same gold mine that provided the metal for the 2000 olympics. 

(Actual photo of me at the mine)

It wasn’t a decade later until I discovered the dirty little secret about gold mining…

Garbage Gold Miners

Here’s a chart of the performance of gold miners relative to the performance of gold:

And here’s a chart of junior gold miners relative to gold:

These charts go back to 2010. That means we have seen 14 years of dismal performance by the gold miners.

Why?

The answer is straightforward… these aren’t well-run companies. It’s like a clown car of mediocre executives fell into a mine shaft.

Gold mining should be straightforward. 

You find a line, start digging, refine it and then sell it. Set aside the risks involved in digging in the wrong area… just think about the execution of it all.

You have to hire the right people, get assayers you can trust, have all of the equipment lined up. 

That means your corporate leadership needs to have the pedigree and experience to run a mining operation.

Take Barrick Gold for example, with a current valuation of $30 billion and one of the more well-run shops in the space. 

Here’s a look at their return on equity, which shows how efficient a company is at getting profits:

(By the way, you can learn more about return on equity – and how to use it in stock analysis – in my masterclass, right here.)

It’s barely positive right now, and has been through several periods where shareholders didn’t see a return for multiple years.

It’s the same with silver miners as well. Here’s a look at the RoE for Pan-American Silver:

For executives of precious metals companies, their goal is to sell stock in the company, not try and get the most efficient operation. It’s a cynical take, but that’s the game.

And it’s also why you don’t find many gold companies that see aggressive insider buying. 

These companies are simply tied to the price of gold action and they take a little off the top to pay for operations.

Which is why it came as a surprise that we started to see a swath of insiders picking up shares in a small silver mining company based in Mexico:

Gatos Silver (GATO) started to see aggressive insiders picking up shares in the $5 range. 

They started buying in size in September of 2023, then added more shares in February 2024.

Here’s what the price of the company has done since then:

Our clients at the Insider Report were keen to these hidden buys – and we sent out a buy alert when the stock was trading at 4.89.

The stock is now trading 95% higher, and we’re looking for even further upside as the precious metals market heats up.

We also just issued a brand new buy alert on a different opportunity with the same kind of setup…

A rare, high-conviction purchase from a company insider.

So if you’d like to learn more about our approach to following insiders to huge stock opportunities, click right here to view a no-cost training webinar where I’ll show you exactly how it works.

The markets just had a stellar first quarter.

Long-term portfolios are hitting all-time highs as the indices continue their march higher. 

Investors should be fat and happy, right? 

Well, that’s true if you owned a semiconductor stock going into the start of the year.

But there’s one group of investors that’s getting grouchier as the year drags on…

Apple shareholders. 

These poor schmucks have a YTD return of -11%, while the Nasdaq is up over 8%.

Here’s how AAPL has performed against the Nasdaq 100 over the past few years:

This streak of underperformance is the worst since 2012 when the stock was down 40% off its highs.

What’s Going On with Apple Stock?

The company has a few things going against it.

First, they seem to be behind the curve on the AI front.

Second, they’re currently facing some legal problems you may have heard about…

Apple acting like a monopoly? Color me shocked.

I mean, when the largest cell phone maker also controls the app store, it carries some terrible incentives.

But here’s the thing: The headlines don’t matter. 

It was almost as if Apple was ready to pull hard into these levels. 

See that red box? That’s where the most volume has traded from the 2020 low to the recent highs. 

When a stock fails to push higher after an obvious breakout, there’s a tendency to revert hard back to the biggest liquidity zone.

This is a monster level for AAPL, and for the past two weeks, the stock has seen a “stick save” from buyers coming in and holding this level.

It’s a decision point for the stock. If buyers can keep persisting through the headlines, then this stock is due for a hard snapback rally.

But if it doesn’t, there’s a lot of stuck longs who are going to be wanting a way out. 

If AAPL loses this level, the next big liquidity zone would be at 147.20. That’s an additional 13% lower from current prices.

I’m stalking a trade right now in the name, and if we do start to see signs of a bottom in this name, we will load up with some calls to participate in the upside.

In the meantime, I invite you to learn more about these liquidity zones, and how we use them to find monster stock opportunities…

Just click right here to register for a free training webinar where I’ll walk you through it all step by step, no strings attached.

Learn how to follow insiders into stocks with explosive potential (full details here)!

Let’s talk meme stocks…

Remember GameStop, AMC, and the “meme stock” frenzy from early 2021?

They effectively created the market top and caused the initial push into the bear market that followed. 

Well, we’re coming out of it, and a lot of those meme stock names are seeing moves in a way that’s not often discussed.

(Side note: I watched the first 30 minutes of “Dumb Money,” the movie based on the meme stock saga, on an airplane. 

Interestingly, I was one of the few who actually called the GameStop squeeze before it happened based on what I was seeing in the options market, and a few days later, I talked about GameStop topping out, which made me quite unpopular online.)

Meme Stocks: An Insider’s Perspective

I bring it up because one of our key strategies is following the purchases of corporate insiders.

CEOs, CFOs, directors, VPs – people who know better than anyone else what’s really going on inside the company. 

We do this by looking for significant buys – high-conviction buys – where they clearly expect the stock to go up. 

We then identify potential catalysts that could spark such a move, like an FDA approval, an earnings beat, or a potential merger.

We also see thematic plays too, like if a lot of energy executives start buying up energy stocks.

Assessing Insider Stock Opportunities

One name worth looking at is Beyond (BYON), a combination of Overstock and Bed, Bath and Beyond. 

A company director, Marcus Lemonis, started accumulating a position beginning around October 2023. 

He bought shares between $15 and $17… 

And the stock has climbed 113% since his purchases.

Here’s another name that came up recently: Blackberry (BB). 

But I’m going to show you why it’s a bad trade.

Philip Brace picked up 35,000 shares at a cost basis of $2.79 this past Valentine’s Day. 

Check out the Form 4: 

Now there was a piece of news associated with Blackberry that hit on February 8th. 

Here’s the press release:

An insider buying company stock shortly after joining the board of directors, or becoming CFO, is pretty common.

But when you see someone whos been at the company for years suddenly loading the boat, it’s usually a much stronger signal that something big is coming.

Here’s another example: Big Bear Ai (BBAI).

Company director Pamela Braden made her first open market purchase ever, picking up 50,000 shares at a cost basis of $1.92 a share. 

In my premium alert service, we picked up shares based on this activity and recently closed down half the stock position for an 87% return.

Our call options did even better, gaining 275%. We closed half of that position as well, so we’re still riding this trade for more upside potential.

I’ve recently put together a complete masterclass that shows my entire process for finding these types of opportunities. 

I break down how to find these Form 4s, what to look for, plus my process workflows, key performance indicators on individual stocks, scanners, screeners, and even some bonus training on value investing and trading options. 

(And, I think you’ll be pleasantly surprised when you see the price.)

Click here and I’ll explain all the details in a brief video.

The relentless advance of technology, fueled by artificial intelligence (AI) and groundbreaking energy solutions, is on the cusp of addressing one of the most daunting challenges of our era: antibiotic-resistant infections. 

The intersection of AI, energy innovations, and medical science promises a new dawn of discovery, transforming our approach to longstanding problems and offering new hope.

The Rise of Antibiotic Resistance

Antibiotic-resistant infections have emerged as a formidable adversary, claiming 1.2 million lives in America in 2019 alone. 

The overprescription of antibiotics has caused an evolution of superbugs, strains of bacteria that conventional drugs cannot defeat. 

However, hope glimmers on the horizon as AI steps into the fray, wielding the power of vast datasets to unearth a new class of antibiotics capable of combating these resistant pathogens.

AI: The Key to Unlocking New Frontiers

The potential of AI extends beyond medical advancements, promising solutions to unsolvable math problems and the development of room-temperature superconductors. 

Every domain, from industrial to medical, stands on the brink of a technological renaissance, poised to leap forward as AI unlocks previously inaccessible possibilities.

The Energy Dilemma

But this progress is not without its challenges. 

AI’s insatiable appetite for energy poses a significant hurdle, with predictions suggesting a tripling of US data center energy consumption from 2023 levels. 

The resurgence of coal-fired power plants, especially in data center hubs like Virginia, raises concerns over environmental impact and sustainability.

The Nuclear Option and Green Energy’s Limitations

As the market searches for solutions, nuclear energy emerges as a viable alternative, promising a cleaner, more sustainable path to powering AI’s future. 

But the transition to a nuclear-powered America is fraught with obstacles, requiring time to build and activate reactors. 

Meanwhile, renewable energy sources like solar and wind grapple with their inherent intermittency, unable to guarantee the constant power supply AI demands.

The Quest for Efficient Energy Storage

The key to bridging this gap lies in advancements in battery technology. 

While Lithium-Ion batteries dominate the landscape, their limitations in scalability, durability, and safety underscore the urgent need for innovation. 

Fortunately, discoveries of vast lithium reserves within the US and the development of new energy storage solutions that eschew costly and hazardous materials offer a glimpse of the future—a future where energy storage is both scalable and affordable.

A Company at the Inflection Point

We’ve identified a company poised to capitalize on the AI revolution with its cutting-edge energy storage technology. 

Trading near its cash value but boasting a high sales multiple, this “deep value” stock is on the verge of explosive growth. 

With a promising product line and the potential for significant returns, especially through the warrant market, this company represents a golden opportunity for forward-thinking investors.

The Role of Corporate Insiders

In navigating the complex landscape of energy and AI, corporate insiders offer invaluable insights.

 A recent six-figure purchase by a company director underscores the confidence and insider knowledge that can guide investment decisions.

To delve deeper into the nexus of AI, energy innovation, and their implications for the medical field and beyond, we invite you to join our free training. 

Discover how following corporate insiders can illuminate the path to groundbreaking investments and transformative technological advancements. 

Click here to watch our free training and embark on a journey to the forefront of technological innovation.

Access our free Trading Roadmap training right here!

 

Hey, Steve here, the lead strategist at Market Traders Daily. 

Today, we’re diving into a topic that’s capturing the attention of investors worldwide… Bitcoin Spot ETFs. 

With Bitcoin’s value soaring above $60k and showing no signs of slowing down, it’s clear we’re witnessing something extraordinary. 

This surge in value is not just about the numbers; it’s about the increased interest from retail investors, especially those previously on the sidelines of the crypto market. 

The introduction of new Bitcoin Spot ETFs is a game-changer, and here’s why.

Understanding Bitcoin Spot ETFs

Bitcoin Spot ETFs are a significant development, primarily because they allow ETF custodians to buy Bitcoin directly. 

This is a departure from the crypto ETFs exposed to the Bitcoin futures market, which, while innovative, come with their own set of challenges. 

For instance, exposure to the futures market can lead to ETF degradation over time due to the futures roll curve. 

The goal with Spot ETFs is to offer a more straightforward, potentially less volatile investment option for those looking to get into crypto.

The Role of Liquidity and Market Dynamics

When trading Bitcoin Spot ETFs, it’s crucial to look beyond the ticker chart and focus on the underlying asset. 

This approach provides a clearer picture of the market’s direction, offering insights that are not immediately apparent when analyzing the ETF in isolation. 

For example, understanding the liquidity dynamics on platforms like Bitstamp can offer strong signals about market movements, something particularly important in the decentralized nature of crypto markets.

The recent SEC approval of Bitcoin Spot ETFs marks a pivotal moment for the market, opening the doors for retail investors to gain exposure to crypto through a regulated framework. 

But the intricacies of trading these ETFs and the broader implications on the market demand a nuanced understanding of liquidity and market dynamics.

The Momentum Circle of Spot ETFs

An interesting phenomenon arises with the structure of these Spot ETFs. 

As retail investors pour into Bitcoin Spot ETFs, the ETF custodians must purchase more Bitcoin, pushing the price even higher. 

This creates a momentum circle where the rising price of Bitcoin attracts more investors, further accelerating the cycle. 

It’s a dynamic that mirrors the momentum runs seen in traditional markets, such as the NASDAQ, driven by significant players like Nvidia.

Harnessing the Trading Roadmap for Success

Understanding the intricate dance of liquidity in the market, especially with the emergence of Bitcoin Spot ETFs, requires a comprehensive approach. 

This is where our Trading Roadmap comes into play. 

We’ve developed a methodology that not only demystifies the process of trading these ETFs but also provides a strategic framework for navigating the crypto market’s volatility and liquidity challenges.

If you’re looking to deepen your understanding of these dynamics and how to leverage them for successful trading, this free training is for you. 

It covers everything from liquidity analysis to strategic trading practices, giving you the tools you need to navigate the complexities of Bitcoin Spot ETFs and the crypto market at large.

By focusing on the underlying assets and understanding the market’s liquidity dynamics, investors can position themselves to capitalize on this new frontier. 

And for those eager to dive deeper, our Trading Roadmap training can offer a pathway to success in this exciting market.

If you’re ready to explore the intricacies of Bitcoin Spot ETFs and how to trade them effectively, join us for our free Trading Roadmap training. 

Discover the power of liquidity analysis and how it can transform your trading strategy in both the stock and crypto markets. Access the Trading Roadmap training here and embark on your journey to becoming a more savvy and informed investor.

Remember, the world of Bitcoin Spot ETFs is complex, but with the right knowledge and strategies, you have the opportunity to navigate it successfully. 

See you on the other side, take care.

Tesla’s journey on the stock market has been nothing short of a rollercoaster. 

Compared to other NASDAQ giants, Tesla’s performance has shown unique patterns that require more than a surface-level analysis. 

In this video blog, Steven uses his Trading Roadmap to offer a comparison with other tech giants and shed light on Tesla’s unique trajectory… 

Including where it could be heading next.

Click here to learn more about Steven’s Trading Roadmap and how it can help you decipher market moves for the shot at exceptional gains.

This isn’t just about tracing trends. It’s about understanding the underlying market psychology and the strategic plays that come with it.

Key Takeaways from the Analysis:

• In-Depth Chart Analysis: A detailed breakdown of Tesla’s daily charts, highlighting key trading ranges and pivotal moments.
• Strategic Trading Tips: Insights into potential trading strategies and option call recommendations based on current market analysis.
• Liquidity Analysis Techniques: A look into how volume-by-price analysis can predict market movements and offer strategic advantages.

Exclusive Access to Precision Volume Alerts Training

Steven’s expertise is just a glimpse of what we offer at Market Traders Daily. For those who want to delve deeper, we have an exclusive offer for you. Access our FREE Precision Volume Alerts training, where you’ll learn the intricacies of liquidity analysis and how it can be a game-changer in your trading decisions. Click here to unlock this valuable resource.

 

Have you ever wondered where the fastest stock movements occur? 

It’s a common belief that giants like Apple and Facebook lead the way, but there’s a different sector where dramatic changes happen more rapidly: biotechnology and pharmaceutical stocks.

The Unpredictable Nature of Biotech Stocks

Biotechnology stocks are known for their volatility, but this can work in your favor. 

When positive FDA data rolls in, these stocks can surge dramatically, sometimes by 300-500% in a single day. 

Take Viking Therapeutics, for example. In early 2023, good news sent their stock soaring from around $3 to a high of $25 a share – that’s an astonishing 733% jump!

The Risks Involved

It’s not all roses in the biotech space, though. The sector is fraught with risks. Poor FDA results can plummet a stock instantly. Companies failing to secure funding might dilute their stocks, further driving down prices. The key is to navigate these waters carefully, understanding both the potential and the pitfalls. 

Mastering the ‘Buy the Rumor, Sell the News’ Strategy

One effective strategy in biotech investing is ‘buy the rumor, sell the news.’ 

This involves buying stocks in anticipation of positive developments, not right before they’re announced. 

A great example is Macrogenics (ticker MGNX), which saw its stock rise from $4 to $16 after an earnings report, showcasing the power of anticipation.

Leveraging Insider Insights

We don’t have to be biotech experts to make smart investment choices. Instead, we can look to those who are… 

The insiders. 

In September 2023, a corporate director’s purchase of 15,000 shares in a company signaled a strong buy to us. 

Following this insider move led us to a whopping 426% return on the stock, and a 712% gain on the simple option play we traded.

The Power of Insider Information

Recently, we’ve identified a promising trade where multiple corporate insiders are buying shares. This company, working on treatments for major depressive disorder and weight loss, has seen significant insider investment, signaling a strong buy to us.

Setting Realistic Targets

With biotech stocks, setting realistic targets is key. We aim for a double on our initial stock investment, with the potential for a 200% return on capital if FDA results are favorable. Options trades could yield even higher returns.

Your Gateway to Profitable Biotech Investing

Biotech investing offers unique opportunities for significant gains. 

To learn more about navigating this volatile yet potentially lucrative market, check out our free, on-demand training.

Packed with case studies from various sectors, it’s a treasure trove of insider knowledge, ready to guide you through bull and bear markets alike.

Click here to access the free training and unlock the potential of biotech investing.