On Friday, I outlined an important litmus test for the market. It was based on a series of option prints that came into Magnificent Seven (“Mag 7”) stocks on Thursday. These large “Ghost Prints” are incredibly powerful when it comes to capturing profit potential - and you’re going to be hearing a lot more about them at my special event this Friday. (You can RSVP here).
In case you missed me on Friday, here are the “Ghost Prints” that materialized on Thursday:
- Apple (AAPL): 21 MAR 25 $215 calls bought
- Microsoft (MSFT): 21 MAR 25 $392.50 calls bought
- Amazon (AMZN): 21 MAR 25 $197.50 calls bought
- Alphabet (GOOGL): 28 MAR 25 170 calls bought
- Meta Platforms (META): 28 MAR 25 $600 calls bought
The premise was that the market tends to revert to what previously worked off significant lows in the index. Clearly, buying Magnificent Seven companies has been an outperforming strategy for much of the past seven years, and you would expect them to be part of any major rally this time around.
While not a certainty, those Ghost Prints pointed to a very important level in the market. A level, if held, could create significant upward momentum in the near future. If the level failed, it could point to the next breakdown in the market. Friday ended up being an important test for the market, and it passed.
Friday’s Gamble, Monday’s Payout
Today, the S&P 500 had the biggest Monday gap since October 2022 and appears to want to finish strong on the day. Why is everyone excited about Monday? Here is why:
What the above graphic tells us is the news cycle surrounding Trump admin policies over the weekend have created selling pressure on Mondays. Does that really mean anything? No, but to the extent people consider this, it may create some buying.
However, this is just a reflection of the gamble that was made in Mag 7 companies last Thursday.
People can try to point out why Friday was going to bottom, but those are just hunches and I hate hunches. I want to see real flows that are pointing to the timing of bottoms. Thursday’s prints led us directly to monitor Friday’s outcome to trade for today’s movement. The news surrounding the potentially more targeted tariffs on April 2 over the weekend was just the match that lit the fire.
We don’t have to make the market harder than it is. We don’t need to search around for statistical aberrations to prove to us that we should or shouldn’t do something. Trying to find patterns that prove this is the rally to buy is only an X post away from proving you wrong. As a result, this rally should be looked at as an opportunity to raise cash levels if you haven’t already.
The Bitcoin Bump
Did I mention that I don’t like guesswork and trying to apply statistical models to price exclusively? Just wanted to check.
Here’s why I’m looking at Bitcoin today.
At the time of this writing, BTC is up just over 5%. Not exactly a tough hurdle for it to jump over. What makes today’s move different than the last 5% move are prints in BTC products like the ProShares Bitcoin ETF (BITO) and MARA Holdings, Inc. (MARA). There are likely other prints in this industry, but my focus is on finding a link from potential movement in BTC with a short squeeze in an equity product like MARA.
Here is a breakdown in the call buying for BITO:
- BITO 28 MAR 25 $20.50 calls bought
- BITO 28 MAR 25 $21 calls bought
- BITO 28 MAR 25 $21.50 calls bought
These are out-of-the-money (OTM), short-dated option contracts which indicate the expectations of a short-term move higher in BITO. As these contracts move ITM, it has the potential to accelerate the move higher called a gamma squeeze.
If BITO and BTC are moving higher, it was not a surprise to see MARA trading 15% higher today. Here is a breakdown of the call roll that happened today on MARA:
- Sell 28 MAR 25 12.50/13.50 long call vertical
- Buy 28 MAR 25 14.50/15.50 long call vertical
Apart from the generally bullish option statistics today, this trade rolled a long call vertical spread from in-the-money (ITM) to out-of-the-money (OTM). This is a reflection of the potential movement in the price as profits are taken and a runner in place.
What is the catalyst for MARA outperforming BITO? It’s about the short interest in MARA. According to Yahoo! Finance, MARA has 32.29% of its float shorted as of 2/28/25 with a short ratio of 2.53. If the current movement in BTC creates interest in MARA and the share price rises, the gamma squeeze created from the option activity could fuel a major short squeeze in the stock price.
As the above chart shows, some of the biggest moves in MARA have been a result of this sort of dynamic. This is something that I like to call a “Squeezequake” and will be part of my upcoming Ghost Print mastermind and alert service we’re launching on Friday! You can register to attend my presentation here and, if you’re game, accept my 90-Day Challenge.