Another big up day in the market Friday. Last week we were talking about a correction, this week we are talking about threatening all time highs……

Watch rates, they came down hard on last Friday’s jobs number, but they started ticking back up Wednesday-Friday this week…..

This may be the only thing that can slow this market down at this point as traders seem to have become numb to the tariffs. Watch out if we get a hotter than expected CPI print this week.

More data this week, as I said above, we have CPI on Tuesday, PPI is on Thursday, and Retail Sales on Friday. With the whole world assuming the Fed will cut in September, and some pundits thinking it will be a big cut, inflation numbers ought to be important.

I think if we get a benign CPI print then you can look for Powell to use that as an excuse for a dovish pivot.

Story of the day likely to be crypto. Bitcoin is over $121k and approaching all time highs, Ethereum is at all time highs. As part of the H.E.A.T. Formula inspired version of the classic Permanent Portfolio we recommend a static allocation to crypto, for me it’s 12.5% (delta adjusted). If you are looking to add crypto to your portfolio (see below about BEGS) I wouldn’t suggest doing it on days like today, I much prefer to be buying the dips.

Crypto bulls love to see something negative on the cover of Barron’s…..

Another big mover today looks to be lithium, which we talked about a couple of weeks ago…..

So we are sitting at an interesting potential crossroad in the markets. US equities continue to make new highs with no real reason not to, except that everyone thinks they are extended. Crypto is making new highs, gold is making new highs, and bonds are doing nothing.

Vanguard’s advice? The 60/40 portfolio isn’t working so add more bonds…..

I do get that stocks seem extended, but the themes keep rolling with no real reason to stop. I also get that the Fed is probably going to lower interest rates, but inflation probably isn’t going anywhere so it is highly unlikely we see the next golden age of bonds.

For those of you in or near retirement, or just looking to build wealth, I’m sorry a 30/70 portfolio isn’t likely to cut it.

There is a proper way to use bonds (T-bills), and lots of them, when constructing asymmetrical portfolios that have a chance at returns. It’s complicated, maybe a webinar on it at some point.

I saw this article on Friday…..

I’m typically not a fan of trying to discern possible earnings moves from options activity as traders are going to be very active pre earnings, and if someone really knows something they will be impossible to detect in all the noise.

I do think watching options trades, especially unusual ones, can help provide an edge. The cool thing about options is they have an expiration date and a strike price. So for example, if a trader spent $1 million on NVDA calls that expire on Friday at $200, you can reasonably assume that he/she has some reason to believe NVDA will be at least 20 points higher in a couple of days.

This alone may not tell you anything, there are plenty of things I think are going to happen in the market that don’t. But, large short term options trades in a stock you already like can give you an added edge.

Even more powerful can be really unusual trades. A stock like NVDA trades a ton of options, like any stock pre earnings this can get noisy. But if you see large, short term options trades in stocks that typically aren’t that active, that could be more reflective that somebody knows something.

Large block trades in short-dated, OTM options can be a tell:

Why It’s Useful:
Institutions with informational or analytical advantages (e.g., channel checks, proprietary data models) may act on that edge through the options market because it offers high leverage for short-term moves.

To make this actionable:

There are a number of services that can help with this. @jbulltard1 and @kiantrades have paid services. There is also Unusual Whales.

When will people realize it’s Gold AND Bitcoin, not Gold OR Bitcoin……

Today’s stock is Ormat Technologies (ORA)….

This one pisses me off because I got in early, got stopped out, and forgot about it.

To the best of my knowledge it’s the only publicly traded geothermal stock. Jefferies just reiterated their buy rating on Friday with a $97 price target.

I’m most interested in applications for AI power…..

CCUP (2x CRCL) Launches Today!!!!! GLXU launched Friday…..