What's going on, everybody?

I walked into I'd Trade That this morning with no plan, and I said so on air.

I ran the same checklist I run every day before the bell and let the trades come to me.

They came.

By 10:00, I had a 20-minute fade on Walmart and a $100 overnight bet on Intel.

I also found a driller under $5 where a director just wrote a $3.5 million check, and I'm hoping that one gets cheaper before I touch it.

So how do i find these things? I spent a chunk of the show covering that very thing.

Watch the replay below or read the recap below:

I start with momentum, because markets are really just money flowing in and flowing out. Our signal went negative back in August, and we've been short the whole time.

So what's actually getting a bid? Go over to Finviz, pull up the sector groups and look at the last month. Consumer defensives: the toothpaste, the groceries, the paper towels.

That's a problem, and I'm just going to point that out. When defensives get an aggressive bid like this over a one-month stretch, that's a late-cycle sign, and it tells me some kind of policy help from the Fed could show up very soon. That makes bonds and high yield look attractive.

Over the next 90 days, I think we bend, we don't break, and a policy decision waits at the end of it.

Somebody in the chat asked if they're going to bail it out again. Yep. Why wouldn't they?

MicroSectors FANG+ -3X Inverse Leveraged ETN (FNGD), a triple-leveraged bet against the biggest tech names, just pushed through its 20-day moving average (the average close over the last 20 sessions). That's leverage leaving: the folks who bought Meta, borrowed against it and bought more Meta are underwater.

Bitcoin's the other tell. People hold it because it's liquid, so when they need cash to cover other trades, it's one of the first things they sell. When Bitcoin drops, there's stress somewhere.

I think we're heading toward a liquidity bottom, maybe three months away, maybe 15. That's why we follow momentum.

You're Trading the Next 20 Minutes

Walmart (WMT) ran 8% this week to $119. Remember when everybody was crapping on it under $100? How do you bet against the number one grocery store in the country?

People will say, "Garrett, I'm late to that." I agree. You're not trading for the next two weeks, you're trading for the next 20 minutes.

So I set my bumper cars around anchored VWAP (volume-weighted average price, what everybody's paid on average, weighted by size), anchored to 4:00 a.m. yesterday. After that run, Walmart's overbought on RSI and getting close on MFI (two momentum gauges, one built on price and the other on price plus volume). If it pushes to my level, I'm prepared to buy at-the-money puts and ride it from $120.60 down to $119, $118, $115.

If it bleeds higher, I don't think about it, and I've got no emotional attachment to the Walmart family. Is that their name? I thought it was Altman.

Then there's Intel (INTC), and anybody who bought it yesterday is getting their teeth kicked in. I'm not buying Intel because it's a great company. I'm in the business of exploiting the people dumping it right now.

The idea I laid out: at 3:00, buy Friday's $97 call, which sat around 53 cents this morning, and put maybe $100 on it. That's a low-odds, big-payoff bet that Intel bounces Friday and fills the gap (climbs back to where it closed before it opened lower) all that panic left behind.

I told everybody to go into The Close at 3:00 and keep asking Voz about Intel 97 calls until she loses it. That's what Option Pit's about.

Look at It Like a Newborn

I told the chat one chart would change their life, and I meant it. In a war-driven market like this one, MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETN (OILU) is the most important chart out there.

It's a triple-leveraged note on the biggest U.S. oil producers like Exxon and Chevron, so funds hedge with it and speculators speculate. And I only care about the daily chart here.

When the 14-day RSI hits 70 and MFI hits overbought at the same time, traders take profits. One of my best friends is an energy trader who at one point had more oil under contract than anybody in the world. Back in mid-2022, he told me energy was going to sell off, and I said, "But there's a war. Isn't oil going to $130?"

He said, "No. Traders are going to take profits." And they did. Nobody cares if oil goes to $150 or $200, that's bluster, and the money's made in the margins between those moves.

OILU just hit overbought on both, and it's selling off. APA Corp. (APA) is selling off this morning too. Funny how that works.

That changes how I look at Borr Drilling (BORR), the number one name on my insider-buying screen this morning. A director just bought 750,000 shares, roughly $3.5 million worth. Insiders have now put more than $50 million into this stock, and they paid as high as $5.58 back in April.

Do you have confidence? He does. But he's investing for the next six years, and his timing's off.

If mechanical selling hits upstream energy, BORR's probably going to $4.15 or $4.10, and I'm hoping it does. Around $4.40, I can sell the $4 put (get paid to agree to buy the stock at $4) for maybe 25 to 30 cents. That's 6% to 7% to take possession of a stock that pays a whopping yield of… nothing.

If I get the stock, I turn around and start selling calls on it. I might not make a single trade today, and that's fine, because the best ideas require patience.

You don't need $100,000 for this. If you've only got $500, cheap names with real volume get you skin in the game, and Finviz finds them: relative volume over 1.5, sorted by volume.

When Mark Sebastian jumped on, he pointed out the 10-year Treasury yield dropped from 5.35% last Thursday to 5.05%. How big is 30 basis points in five days? Multi-sigma, about a three-standard-deviation move.

Money's running out of AI and into bonds, and I don't think that's an accident. I've still got digging to do, but this is the beginning of something.

I know it's boring, but I'm willing to put cash into investment-grade bonds right now. You're going to pay me 8%? I'll take it, if I can find it in a fund.

I'd Trade That,

Garrett Baldwin