The 43rd Time Is the Charm

Peace in the Middle East was priced in again this morning. The market is finally past it.

Peace got priced in this morning. That makes 43 times in two months, give or take.

Today's headline was Iran will be allowed to sell oil while negotiating. Crude dropped on the news, then stopped and started drifting back.

I have stopped counting because they blur together. So has the market.

The first time a headline like this hit, the move was real. This morning it barely registered before reversing. That is the trade.

When the market reacts smaller and faster to a headline it has seen before, the pattern is being arbitraged out. The trade is no longer the news itself. It is how the market reacts to the news.

If you are still trading the Iran headline, you are behind the curve. 

A headline stops moving the market when participants stop believing it will. The first move comes from people taking the news at face value. The fade comes from people who have seen it all before.

Once enough people have seen it enough times, the move stops happening at all. That is where the Iran headline is right now, and the market is finally past it.

What you do with that information is the part that matters.

You stop trading the headline. You start trading the second-order effect: how the market reacts to a headline it has seen before.

Which is what I do with expected moves in the TheoTrade Chatroom. If you’re not a member, now is the time to get started because volaility is picking up. 

Click here now. 

To your success,

Don Kaufman 

Mr. Toad's Wild Ride

The S&P expected move for today is $60. Here is what that is telling you.

My power went out at 5 am this morning. Construction crew cut a cable and the whole area was down.

When you lose power in Phoenix, you have until about 9 am before things get ugly. After that the temperature climbs and the house turns into an oven.

Two of my three kids are in finals week and they were freaking out. "Can I even get out of the garage?"

You would think they had lived on an island. They forget the routine that fast.

My wife asked about a generator. We have 600 amps in this house, three car chargers, seven air conditioning systems, and a partridge in a pear tree. The generator is not happening.

I watched the market from my phone until the power came back. The tape was already two-sided, same energy as my house.

This was going to be Mr. Toad's wild ride for the rest of the day.

Here is what the math is telling you.

The SPX expected move for today is $60. That is the range the options market is pricing in for the session. The expected move for the week is $133.

That is sizable. Pull this number up before the bell and let it tell you what kind of day the market is pricing in.

A $60 daily expected move means the market is pricing two-sided trade. No clean rip, no bottom in, just up-down-up-down all session.

If you sat down today thinking you were going to buy the open looking for a one-way rally, the expected move was telling you to stop before you started.

And the tape is confirming it. The S&P was doing 6,000 contracts a minute this morning.

At 5,000 contracts a minute, you are pumping. At 6,000, people are standing up behind trading desks. By the time you hit 10,000, the fire hose is full open.

This is heavy hedging activity, which confirms what the expected move is already saying. Volatility is in the price.

So what do you do?

You do not fight a two-sided tape. You trade what is in front of you. Scalp, take profits, get out, look for the next setup.

Today is a sit-on-your-hands-until-the-setup-is-clean kind of day.

Tomorrow morning before the bell, I'll pull up the SPX expected move and walk through what it's pricing for the session. If it's a $40 move, we're looking for direction. If it's a $70 move, we're scalping and staying nimble.

You'll know the game plan before the first tick.

If you're showing up without the expected move, you're guessing. The algos already did the math. 

Join us in the TheoTrade Chatroom

To your success,

Don Kaufman TheoTrade

Big Move — Now We Wait

Overnight delivered a sizable move, and when price travels that far outside of regular hours, it tends to distort the usual structure we rely on at the open. That puts more weight on the opening range — the first stretch of price action after the bell — as it helps establish whether we’re seeing continuation or digestion of that move. Ideally, we get some retracement early to provide context and clues. Without it, you’re essentially trading stretched conditions, which can be less forgiving and more reactive.

This is one of those sessions where discipline matters more than opportunity. Big overnight moves can create urgency, but they also increase the odds of getting caught chasing. The goal here is simple: let the market show its hand, then respond. If we get clean structure and defined levels, we engage — if not, we stay patient. When in doubt, stay out isn’t just a saying… it’s a strategy on days like this

Full breakdown is inside today’s Pre-Market Playbook. Check it out here and trade it smart.

Hanging Tough — But Something Feels Off
by Tony Rago

Crude pushing up near 115 pre-market while equities are holding firm above 24,000 and 6,600 — on the surface, that’s strength, but the tone feels a bit disconnected. When you see multiple markets stretched like this without clean continuation, it often leaves the door open for a headline-driven move that can shift sentiment quickly. For now, price is respecting those big round levels, and that matters — they tend to act as psychological pivots where buyers and sellers reassess positioning. I’ll be watching how we behave around pre-market highs and lows early, as those zones often give the first real clue on whether we’re set for continuation or reversal.

Today feels like a “risk-first” session — not the type to force anything just because levels are nearby. When things feel slightly off, that’s usually the market reminding you to stay patient and let it show its hand. If we hold above those key areas, bulls stay in control, but any failure there could accelerate quickly if participants get caught leaning the wrong way. No need to be early — let the structure develop, stay disciplined, and take the setups that are earned, not anticipated.

Full breakdown is inside today’s Pre-Market Playbook. Check it out here and trade it smart.

]]> https://archive.theotrade.com/how-i-trade-a-bear-market-playing-ping-pong/ Sat, 04 Apr 2026 13:00:44 +0000 https://archive.theotrade.com/?p=152288

Hey trader,

Every day, I pick up my daughter from school at 10:00 A.M.

I have road rage the whole way there and back. She sits in the passenger seat and white-knuckles it while I fight Chicago traffic.

What she does not know is that by the time I get home, PayPal has already paid for another textbook.

You see, I trade PayPal almost every other day. 

Buy at $44 - sell it at $45 - $25 to $30 in profit each time. 

And it will put my daughter through college. 

This is how I survive a bear market. I do not swing for the fences. I play ping pong.

I call it the Bierman Ping Pong Game. It is the single most practical skill I can teach you right now. 

It’s not glamorous, but it will keep you alive.

The Game Nobody Wants to Play

Most traders want home runs. They want to buy the low and ride it to the moon.

That playbook is dead. The market is broken technically, fundamentally, and psychologically.

PayPal trades at eight times earnings. Not one hedge fund owns it. Not one active manager in the world wants to show this stock to their clients.

That is exactly why it works for me. The stock is in a lock box. It bounces between $44 and $45 like a metronome.

I do not need it to go anywhere. I just need it to keep bouncing.

How the Ping Pong Game Works

The concept is simple. You find a stock trapped in a narrow range with a floor underneath it.

You buy near the bottom of the range. You sell near the top. Then you do it again.

The key rules I follow every single time:

• The stock must have fundamental support underneath it. PayPal at eight times earnings is not going to zero. That valuation is the floor.
• The range must be tight enough that you can trade it in days, not weeks. If you are waiting a month for $2, you are in the wrong stock.
• You never short these names. The risk reward is too lethal. One emergency Fed cut and you are bankrupt on the margin call.

This is not a bull market strategy. This is a survival strategy built for exactly this environment.

Adobe Proves the Same Point

I sold put spreads on Adobe at 235 to 240 this week. The stock trades at eleven times forward earnings.

Insiders are loading the boat. An activist investor group is circling the company to unlock value.

I do not need Adobe to go up. I need it to sit still for three weeks. If it closes above 241, I bank $250 from theta decay alone.

I priced it right. That is the entire lesson.

TLT. Same Game. Different Asset.

TLT is the 20-year Treasury bond ETF. Jeff calls it one of his favorite trading vehicles because he uses bond funds to generate income. 

You cannot invest in it. Bear markets force you to trade. Bull markets force you to invest. Jeff says to write that down.

Buy it at $85. If it bounces to $87, sell it. Trade it back and forth over and over again.

The farthest it might fall is $79. That would put the yield at 6%. You cannot own it for more than a week.

You cannot short it either. If the Fed announces an emergency rate cut, TLT goes straight to $90 and you get a margin call. The risk reward is too lethal on the short side.

But as a ping pong trade, it works. Buy the call, sell the put spread, and grind.

Why This Matters Right Now

You are in a bear market. Value stocks are the cheapest they have been since 2018. Money managers refuse to buy them.

That means these channels will persist for weeks, possibly months. Every one of them is an opportunity to grind out profits while the rest of the market panics.

I make sure the downside is mitigated on every trade. You should too.

The Genesis COG System identifies exactly when these range-bound setups form and when the channel is about to break. It tells you when to play the ping pong game and when to step aside.

Most traders will spend the next three months watching their accounts bleed. You do not have to be one of them.

Have a good weekend. Monday comes fast. Be ready.

Professor Jeffrey Bierman
Creator of the Genesis COG System

Hey trader,

Holiday weekends tend to produce strange market behavior. I've seen it happen dozens of times over the years.

Human traders leave their desks early. 

The algorithms take over with one less day in the trading week.

Last week was no exception. Markets experienced a sharp rebound after breaking through a key technical level.

The big debate right now is whether stocks are retesting former support as resistance or whether we just witnessed a false breakdown. 

Time will give us the answer shortly.

But as keen sector observers, we know exactly what to look for coming out of a low. 

There's a niche theme developing that most traders are completely ignoring.

Forget Mega-Cap Tech. Focus on This Instead.

For years, the entire market narrative revolved around seven stocks. The Magnificent Seven dominated every headline and every fund flow report.

Add names like AMD, PLTR, and AVGO to the mix and you get a Magnificent Ten. That group accounts for roughly 40% of the S&P 500.

That concentration worked beautifully on the way up. It has been a drag on the tape since October.

These names have attempted to find support in recent weeks. They still face major headwinds before we get any kind of "all clear" signal.

Earnings expectations remain elevated. The AI spending cycle is facing tougher scrutiny from investors who want to see actual returns on massive capital expenditures.

But I've noticed something much bigger brewing underneath the surface.

The Russell 2000 has outperformed the large cap indices by a wide margin during this correction. When small caps hold up better than large caps during a selloff, it tells you that capital is rotating, not leaving.

This got me thinking about a more specific slice of the market. Small cap tech stocks.

Take a look at this ratio chart:

This chart compares small cap tech stocks to the Magnificent Seven. Up until about August of 2025, the big tech names were dominating the relationship.

Since then, the trend has quietly reversed. Small cap tech names have been steadily outperforming their mega-cap counterparts.

The ratio has been making higher lows and recently pushed to a new relative high. Most traders are not paying any attention to this at all.

Why This Matters for Your Portfolio

They're still obsessed with whether NVDA will hold its 200-day moving average or whether AAPL can reclaim its highs. Meanwhile, the real relative strength is showing up in smaller, less-followed names.

History shows that when leadership shifts like this, it tends to persist for months. Consider what happened during previous rotation cycles:

• In late 2020, small caps outperformed large caps by over 30% in just a few months after a similar divergence appeared
• In early 2016, small cap tech led the recovery out of the January-February correction well before mega-caps joined the party
• In 2018, the October selloff saw small caps bottom first and lead the snapback rally into year-end

The pattern is consistent. When the mega-cap trade gets crowded and starts to unwind, capital flows into the next best opportunity.

Right now, that opportunity is sitting in small cap tech.

Once the indices sort out this volatility, keep close tabs on this space. Small cap tech stocks are setting up to be serial outperformers in 2026.

The ratio chart is confirming it. The relative strength is confirming it. The rotation out of mega-caps is confirming it.

Keep you posted,

Gianni Di Poce

Hey trader,

Crude oil dropped $5 on Thursday after Iran-Oman negotiation headlines hit. 

If that pullback made you start looking for energy shorts, the math says you are wrong.

Wednesday's futures open was $98.84. Thursday's high was $113. Oil is still up $10 in two sessions.

The supply deficit that drove this rally has not changed. Even a best-case deal is months away from putting additional barrels on the water.

The Pullback in Context

A $5 drop after a $14 rally is one-third of the move. That is a normal pullback, not a reversal.

Price pulled back to $108. It was still $10 above Wednesday's open.

April's monthly monkey bars show crude does not reach overbought until $120. The math still has room for new highs.

Headlines Do Not Change the Supply Math

The market sold crude on the word "negotiation." That word is doing a lot of heavy lifting.

Even if a deal were signed tomorrow, the physical timeline is three to four months. One mega supertanker was destroyed. The ships getting through carry 700,000 to 1.5 million barrels each.

The U.S. consumes 20 million barrels a day. That trickle barely registers.

The Strait of Hormuz has not reopened. The conflict has not de-escalated. Military operations have not ended.

Energy margins stay elevated until that changes.

The Channel Said Buy

Thursday's overnight chart showed a clean uptrending channel with $1.30 of efficiency measured off closes.

Crude broke out, ran to $113 at exactly the doubled channel height, then pulled back to support. It tested the lows multiple times and refused to close below.

That was a buy signal. Entry above $110.67. Target $112.13.

On a micro contract, that is $146 of risk. On a full-size contract, $1,460. Precise entry. Precise target. Precise risk.

Energy Stocks Held Firm

Crude dropped $5. The energy sector did not care.

XLE bounced off the zero level on the monkey bars Thursday. The bullish bias stayed intact with a target near 133.

The longer-term channel has been climbing for weeks. The best entry on a deeper pullback is near 122, targeting 135.

That channel would have to break entirely before the bearish case begins. Do not short energy stocks. I have said it every day for two weeks. The math has not changed.

One Trade That Pays You to Wait

ConocoPhillips traded near $129 Thursday. It pays a 2.6% dividend with the next payment around May 18.

Sell the May 15 expiration 125 put for roughly $4.50. That collects 3.7% in 43 days.

Your break-even drops to $120.50. COP would need to fall over 7% before you lose a dollar.

If it stays above $125, you keep the premium. If you get assigned, you own a quality energy stock at $120.50 with a dividend kicking in May.

Both outcomes work when the thesis is bullish.

What to Do Before Monday

Markets reopen after Good Friday. Use the weekend to plan.

If the supply deficit thesis makes sense to you, the COP short put expresses it with defined risk. For futures traders, watch for a close above $110.67 targeting $112.13.

Do not rush anything into Monday's open. The levels will be there.

I cover these setups live every session inside the 10% Club. Entries, stops, and targets in real time.

Click here to learn more.

Blake Young
Senior Market Strategist, TheoTRADE

Hey trader,

Headlines can move markets in a blink, whipping traders out of positions before they can even react. You do not have to let them control your trading.

All you need is a plan you trust. That is what kept me grounded this week.

Tuesday morning, I was walking the room through an ES trade: long from the 26, targeting the 88...a normal Golden Setup executed in the futures room with everyone watching.

...then a headline dropped about Iran, and the dome disappeared.

"If you're sitting in a trade and that news hits and your dome just disappears, price just completely goes away, and you got to kind of look for it."

The order book emptied out. 

Impulse bars of 105 and 158 handles printed back to back.

If you were on the right side, your bracket either took you out at breakeven or you were staring at a runner. 

If you were on the wrong side, you were in trouble.

I was on the right side because I had direction. 

I got my 62 points across all contracts, and the only reason it worked is because I had a plan mapped before the headline ever hit the wire.

The Noise Was Relentless

Every session had something, from Iran military exercises to ceasefire talks to White House press briefings to crude oil pushing over $103. The news flow hit at all hours, whether it was overnight, pre-market, or at the close.

"Either overnight, pre-market, at the close, sneaking it in when the real money is not doing anything."

Last Thursday, a White House press secretary headline about Iran popped up mid-session. I saw the impulse candle forming and told the room we were going to fade it.

I was already short the 06 based on my levels. The headline created a quick spike, and price rolled right back over.

"They can throw everything they want at it. It's just got to run its course here."

The next morning brought the same thing, and the morning after that was no different. By Tuesday, we had seen multiple overnight headline-driven rips that got sold the next day.

By Wednesday's pre-market prep, another ceasefire headline launched a massive bar in the futures. The NQ printed a 150-handle candle and the ES printed 39 handles.

Both got faded almost immediately.

"It's just a headline. There's going to be plenty of those."

If you were chasing those bars, you were buying the top of a headline spike and selling the bottom of the fade. The traders who had their plan already mapped were the ones who stayed out of trouble.

The Plan That Held

Here is what my week actually looked like underneath all the noise.

On Tuesday, I came in with a simple thesis. If the bulls could sustain trade above the previous day's high, they could run.

Crude was over $103, which meant headwinds for any sustained rally. The news flow could create pops, but sustained buying was unlikely with oil at those levels.

"You can't have crude over 100 and have equities ripping. It just doesn't work that way."

That gave me a framework. I was on bounce watch, and my confirmation was a break above yesterday's highs.

Below that, pops would get sold. Within that framework, I traded a clean Golden Setup, long the 26, out at the 88, 62 points on micros.

The 100-handle block had given me the directional signal. From the 50, a close above the 62 meant higher prices were owed.

The 33 was my line in the sand. As long as that held, the target above was in play.

"All I was doing was following my plan."

None of that required me to have an opinion about Iran or oil prices or what any press secretary said on television. The levels were mapped, the direction was clear, and the trade was there.

On Wednesday morning, I walked the Market Masters room through the same top-down process. We started on the daily chart, went to the four-hour, then the hourly.

The NQ had just printed a 1,000-handle daily candle. The ES put up 230, and the natural instinct after bars like that is to assume the selling is over.

I told the room the rally was too far, too fast. The farther price goes without any back and fill, the more dramatic the eventual pullback becomes.

I identified 24,250 as resistance on the NQ and 24,000 as the bull/bear line. On the ES, 6,500 was the level to watch.

If the bulls could not hold the pre-market low at 6,575, there were 60 points of downside to weekly pivot.

"I don't have a dog in the fight either way. I want to just have a market that moves."

That is the mindset that keeps you alive in a headline tape. My job is to have the levels ready so that when price resolves, I know where to get involved and where I am wrong.

Why This Matters for You

The biggest danger in a headline-driven market is the temptation to trade the headline instead of trading your plan. Both buying a ceasefire spike and panic selling an Iran headline put you at the mercy of information you cannot verify in real time.

Your levels do not change because a press secretary said something. The 26 is still the 26, the 77 is still the 77, and the opening range still establishes direction.

When a headline hits mid-trade, there are only two things that matter. You need to know whether you had the direction right, and you need to know where you are wrong.

"It's about getting the direction right, because we as day traders, that is at the core of what we do."

On Tuesday, I had the direction right. The impulse bars were violent, but they were moving in my favor.

If I had been short, I would have known I was wrong the moment price closed above the 62. The levels told me that before any headline ever printed.

This tape is going to keep producing headlines. Crude is going to keep making noise above $100, and geopolitical developments are going to hit at random hours.

None of that changes the process. Map your levels before the open, let the opening range tell you who is in control, define your risk on every entry, and when the headline hits, check price against your plan.

That is all you can control, and it is all you need.

See you in the room Monday.

Trade smart,

Tony Rago
Creator of the Golden Setup

Hey trader,

Someone just bought downside protection on Ford through the earnings window.

The position was over 3,000 contracts at the $10 strike for May 1 expiration, and the open interest jump confirms every one of them was brand new. 

Someone placed a fresh directional bet that Ford reaches $10 inside a month.

If you have been watching oil prices climb while Ford sits range-bound near $11.50, that tension is exactly what this print is pricing in. Higher gas prices do not help move cars off the lot.

Ford announces earnings at the end of April. The May 1 expiration extends just past the report.

The Block Hunter Console caught the moment open interest at $10 jumped from 359 to over 3,400 in a single session. The largest block printed at 2,200 contracts.

Ford moves about $1.60 in a typical monthly cycle, and the $10 target is $1.50 away. The math works.

The tricky part is the implied volatility. It is elevated enough that buying a naked put bleeds premium even if you are right on direction.

There is a spread structure that solves that, and the earnings date gives you a built-in rule for when to close.

What the Print Tells You

The Console flagged 2,200 put contracts bought at the $10 strike for May 1 expiration in a single print. Open interest at that strike sat at 359 before the session and jumped to over 3,400 by the close.

That jump confirms these are new positions. The institution opened this exposure during the session, and fill location confirmed the contracts were bought.

Ford was trading near $11.50 when the print landed. The $10 target sits approximately $1.50 below the current price.

Ford announces earnings at the end of April. The May 1 expiration captures the full window through the report and gives the position a few additional days to work after the announcement.

How the Monthly ATR Validates the Target

The monthly average true range on Ford measures approximately $1.60. That number represents the average amplitude of a full price cycle from low to high over a four-week period.

A $1.50 move from $11.50 to $10 falls within that range. The target is achievable inside a single monthly cycle based on Ford's historical price behavior.

Elevated oil prices add a macro headwind. Higher gas prices weigh on consumer demand for new vehicles, and the Persian Gulf conflict has kept crude elevated for weeks.

That backdrop supports the bearish thesis on an auto manufacturer heading into an earnings report.

Why Implied Volatility Favors a Spread

Implied volatility on Ford is elevated relative to recent history. That pricing environment makes naked put purchases expensive, because you are paying inflated time premium on top of directional exposure.

A put vertical spread solves that problem. You buy the higher-strike put and sell the lower-strike put, which offsets some of that inflated premium.

The skew on Ford tilts in the spread buyer's favor. The $10 strike carries implied volatility near 48%, while the $12 strike sits near 41%.

Selling the richer premium at the lower strike and buying the cheaper premium at $12 reduces the net cost of the position.

How to Structure the Trade

The institutional print targets $10 for May 1. A spread at the May 15 expiration gives you additional time through the earnings window with clear management rules.

• Buy the Ford May 15 $12 put
• Sell the Ford May 15 $10 put
• Spread width: $2
• Cost: Approximately $0.73
• Break even: $11.27
• Max risk: $0.73 (the debit paid at entry)
• Max profit: $1.27
• Direction: Bearish
• Catalyst: 3,400 put contracts at $10, monthly ATR confirming target range, earnings late April, elevated oil prices

Ford does not need to reach $10 for this spread to hit a 70% return. A move toward $10.75 with time remaining pushes the spread to approximately $1.24.

The earnings management rule is straightforward. If the position is profitable heading into the announcement, close it and take the gain.

If the position is underwater going into earnings, hold through and let the report serve as the catalyst.

The $12 strike on the bought leg sits slightly in the money at current prices. That means the spread already carries intrinsic value and responds immediately to downside movement in Ford.

What the Console Is Tracking Now

The Block Hunter Console flagged the 2,200-contract block and confirmed through fill location that the puts were bought. Open interest at the $10 strike confirmed the position as new.

The monthly ATR validates the target, the skew favors the spread structure, and the earnings window provides the catalyst.

The institution committed capital to $10 on Ford with a defined timeline. The spread gives you the structure to position alongside that conviction for 73 cents of risk.

See exactly how Block Hunter catches institutional positioning before the crowd catches on.

Brandon Chapman, CMT
Creator of Ghost Prints

Oil just ripped 11% overnight and closed at $111. That single data point makes me unable to get bullish on this market by any stretch.

We are heading into a three-day weekend with gasoline prices about to explode. Five and six dollar a gallon gas triggers what traders call demand destruction, and it will crush economic activity almost overnight.

The S&P 500 had a textbook rip-your-face-off rally this week. The index moved almost exactly 195 points to the upside, landing right on the upper edge of the weekly expected move.

That kind of precision matters. Zero DTE options are forcing the market into these expected moves with staggering efficiency.

SPX alone traded nearly five million contracts today. Add in the Spiders at 12 million and QQQ at six million, and those three products accounted for roughly a third of the entire options market.

Nothing else even traded.

The rally looks impressive on the surface. Underneath, the signals are flashing red.

Volatility futures are still bid heading into a holiday weekend. That almost never happens. The VIX term structure remains in steep backwardation, meaning the market is pricing more risk in the next 13 days than the next 47.

Here is what I covered in tonight's video:

• Oil at $111 is no longer a US problem. It is a global demand destruction event that will show up in inflation prints across every sector.
• Private credit firm Blue Owl saw a 41% redemption request on roughly $33 billion in assets. They froze redemptions at 5%, and the contagion is now spreading to their technology fund.
• Blackstone is down about 30%. BlackRock and KKR are under duress. The private credit stress is bleeding into junk bonds and regional banks like KRE.
• NVIDIA has gone nowhere for almost a year. Meta is flat. Microsoft is approaching three-year lows. Tech was already broken before geopolitics kicked in.
• Next week's expected move is $170. If you get up moves, short into them. If you get big down moves, keep your hands inside the vehicle and use defined risk.

Even if the geopolitical situation resolves over the weekend, the structural problems remain. Private credit redemptions, stalled mega-cap tech, and $111 oil do not disappear with a ceasefire.

This is far from over.