🤼♂️ YEET no. 19: Wrestlemania
Welcome to The Yeet, a weekly DD where we try to tilt the casino...
Hey! I’m @yourboymilt, and welcome to retail’s Sunday Paper.
I should probably let you know...This is not financial advice! We are here to entertain while giving you ideas, perspective, and angles. Do your own research, I prithee. And if you aren’t subscribed, join us here:
Creator/Editor:@YourBoyMilt The Architect: 🧠 Publishing Associate:@YourGirlRachie
Pt. 1: Week’s Thoughts, Pt. 2: Defense Sector DD (CJO), Pt. 3: Flow 302: Filters (Unusual Whales), Pt. 4: Crypto DD (sourmilk, capybara), Pt. 5: Watchlist, Pt. 6: Index Forecasts (@daarkmaagician ), Pt. 7: TLDR
🤼♂️ Pt. 1: Wrestlemania
WELCOME TO SUNDAY NIGHT SMACKDOWN
In a stunning reversal somehow, some way, we made it out of last week’s OPEX chokehold; lying on the mat, we were down for the count by mid-week as the S&P 500 tanked 2.5% from its record high on Monday. SPY wasn’t the only victim of a topsy turvy week, however, as each of the indices took some bruises from the top rope:
The S&P 500 lost 0.6%, the Dow lost 1.1%, and the Nasdaq Composite lost 0.7%. The Russell 2000 was the real loser with a 2.5% decline.
Well, that didn’t matter too much because mega-cap stocks came roaring back to end the week. With rises of nearly 1% or more in each major index, we had the type of face-melter on Friday that brings us all right back to the 0DTE Casino (even after we swore never to push our chips all-in again).
The rebound was both shocking and unshocking when you consider two facts; 1) Bears get absolutely suplexed every week, as is tradition, and 2) this week’s economics reports were Schroedinger’s numbers—on a macro level you could interpret them pretty much any way that you wanted. The biggest letdown was probably in retail, which missed the mark completely with a -1.1% drop led by auto sales; apparently people ain’t rushing to buy a used Miata anymore, and Becky ceased her routine T.J. Maxx trip to scoop up $8 leggings. On the other hand, we saw a huge uptick in numbers for industries like restaurants and bars; Delta be damned people are determined to hit their local Olive Garden, and they’re gonna shut down that bar once they’re full of those breadsticks.
I suppose the market couldn’t figure out what to think, which is why the week was so up and down. Is Delta the real deal—indicated by lower retail sales—or is it a thing of the past, indicated by spending increases at restaurants, bars, and other social entertainment? Well, either way you slice it, the end result on Friday was the same:
Ouch. But this week was only the lead-up, these numbers and their interpretation serving as the warmup for the marquee billing; Wrestlemania is coming LIVE to Jackson Hole (virtually), and you better be prepared Brother (Ohhhhh yeauuuhhhh!!). The Fed’s annual symposium—the big event of big events for the central bank—is going down in the public Zoom Arena. There was only so long that tough conversations about Central Bank policy could run from their destined Championship match; all the topics we’ve been able to brush under the rug will finally be addressed directly—and very publicly—for all of the market to overreact to. Just the fact that they decided to switch to a virtual meeting—rather than host it in person due to Covid-19 concerns—should give you a sense of the mood heading into next week’s policy discussions.
Teton County, Wyo., where dozens of central bankers, policymakers and economists normally gather for the event, changed its transmission risk level to “high.”
The Fed’s decision to cancel its own in-person event is representative of a broader pullback in economic activity as virus concerns mount. Fresh data from the Transportation Security Administration show a slowdown in travel, with the number of people passing through TSA checkpoints down 10% on Friday from a recent high in mid-July.
So, which issue is it that will send investors into a frenzy? Well, there are several entrants into the Royal Rumble that have a legitimate claim to the crown of discussion, but the Championship Match seems set. In one corner we have the Delta Variant, and the necessary pause this would bring to any discussion of The Fed’s tapering of quantitative easing. In the other we’ve got economic benchmarks, which would force The Fed’s hand in tapering off bond purchases.
Federal Reserve officials, in numerous recent speeches and interviews, have already managed to speed up expectations for when they could begin to slowly pare back their $120 billion a month in bond purchases. More of that talk is expected at their annual symposium, which begins Thursday.
The Fed chairman’s speech is typically the highlight of the annual event, and various Fed chairs have used the Jackson Hole, Wyo. meeting to send important messages. The question is whether Jerome Powell will channel his speech Friday morning to provide more details on how the Fed could begin to unwind its bond buying, and even whether he is personally ready to embrace it.
The best hope for bulls? That some of the mouthier members of The Fed end up with shitty Wi-Fi connections so they can’t spout their bearish propaganda.
One piece of good news for you gambling addicts who got too deep into weeklies before knowing this event was coming; the most villainous of The Federal Reserve Bear Bunch, Kaplan, is already switching his stance on tapering. Our boy, The Fed’s Kaplan, just two weeks ago:
Our mans two days ago:
Kaplan? More like CAPPIN’ 🧢. Wow, what a turn from heel to hero! Not since The Rock have we seen one man reinvent his persona so completely for the fans! This dude changes his mind more than Nikki Minaj changes her hair color, and my calls absolutely thank him for it; The Delta Variant hit his previous opinion with a jaw-shattering reversal.
Wrestlemania is the main event of its sport, a money-making clash of titans watched by casual fans and the die-hard alike; it’s the birth of heroes, the vanquishing of heels, and the origin of absurdly manufactured storylines to come. Much like the beer-guzzling, suplex-loving fans in the stands at the arena, financial “analysts” and cheering investors will be watching Jackson Hole with bated breath. Each word will be hung on, and each grapple gasped at, while news media for a full week becomes a continuous echo of “oOoOohs” and “ahhhs” at the show.
But none of it matters. Wrestling isn’t real, the storylines aren’t real, and the characters aren’t real. The arena that we watch is a fabricated, engrossing set of storylines presented for entertainment. Maybe next week Delta is the villain, and reopening stocks go down like Andre the Giant effortlessly tossing a foe out of the ring. Or maybe it’s a heel that turns hero, and we all cheer and give a “hell yeah” as stay-at-home stocks send tech soaring. Or maybe it’s retail that is the entertainment, bulls living off the former glory of a championship fight, soon to be discarded and holding bags like Mickey Rourke in The Wrestler. Who knows what will happen in the ring next week, and honestly who cares—let’s accept that big money writes the script in the shadows, and we’re just here to watch the show.
Welcome to YEET no. 19, brought to you by Ric Flair Drip
🛡 Pt. 2: Playing Defense
A DD on the defense sector in light of world events
Contributor: CJO
To say that the situation in Afghanistan will have impacts on the American Defense Sector is an understatement; it’s one of the oldest and slowest investment sectors, but one that also tends to react dynamically to relevant conflict. The nature of the fight in Afghanistan—and the political ramifications—are a touchy subject which The YEET has no desire to dive into (so, don’t worry!). What this event does do for The YEET, however, is bring the deeply valuable American defense industry to the forefront of our minds; we realized that we’ve somehow neglected to talk about it up until this point. It doesn’t take a cynic to see that when it comes to the withdrawal, the sudden and increased need for U.S military intervention and technology will create fresh demand for the major players.
We’ve seen similar situations unfold over time that reveal an undeniable truth—international instability breeds U.S. military response. We believe America wants to and will do the right thing, and the U.S. is already intervening on behalf of the Afghani citizens as a part of our commitment to the country. We also believe there are catalysts integral to the international political order that will drive America to act even quicker and more decisively than one may think; these catalysts serve as further confirmation of a coming boom for defense companies. Before diving into the tickers in the defense sector, there are two specific catalysts in Afghanistan you should know of which will heighten the U.S. response:
Chinese involvement: Our arch nemesis is, of course, using the botched withdrawal as an opportunity to strategically maneuver themselves closer to Afghanistan. With Afghanistan in a precarious spot as a newly independent nation in search of an identity, they are susceptible to Chinese influence and could potentially fall under their geographic and ideological sphere.
Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington and an adjunct assistant professor at Georgetown University, told Barron’s, “Chinese officials will seize this opportunity to portray U.S. involvement in Afghanistan as a dismal failure and pitch the Chinese model of global leadership for the country’s forthcoming chapter.”
If there’s one thing we Americans hate more than a reasonable diet, it’s the spread of communism! We’re likely to see a swift yet humane response to establish ourselves as both peacekeepers and the dominant global political ideology.
Resources: Afghanistan is also incredibly rich in metal resources, including the precious Lithium and Copper necessary for EV batteries. Were those resources to fall under the control of the Taliban—one of the few financial plusses for the country—it would bring about even more infighting and instability. Additionally, continuing with our above point, the last thing the U.S. wants is countries like China and Russia cutting sweetheart deals on a critical resource stockpile.
Many countries with weak governments suffer from what's known as the "resource curse," in which efforts to exploit natural resources fail to provide benefits to local people and the domestic economy. Even so, revelations about Afghanistan's mineral wealth, which built on earlier surveys conducted by the Soviet Union, have offered huge promise.
Demand for metals like lithium and cobalt, as well as rare earth elements such as neodymium, is soaring as countries try to switch to electric cars and other clean technologies to slash carbon emissions.
So, for reasons of principle, emotion, and strategy, it’s incredibly important that the U.S. respond in a major way. Who are the key players in our defense sector that will provide said response? Let’s have a look at some financials and charts:
Major players: Boeing (BA), Northrop Grumman (NOC), Lockheed Martin (LMT), Raytheon (RTX), and General Dynamics (GD).
High-risk/High-reward new kid on the block: Kratos Defense & Security Solutions (KTOS)
Note: The performance of the defense sector has been mixed so far in 2021 (YTD=Year-to-Date)
SPY YTD 18.24%
DIA YTD 15.51%
LMT YTD: 1.94%
LMT’s revenue was $17.03 billion in Q2 and $65.4 billion in 2020, up 9.4% year-over-year on a market cap of $100 billion. The F-35 Joint Strike Fighter will be a key moneymaker for Lockheed for years to come. Its acquisition price tag is $400 billion, making it the most expensive Pentagon program ever; this stealth fighter is also seen as the "quarterback" in the Pentagon's emerging war fighting strategy to counter near-peer rivals like Russia and China.
The U.S. and its allies have 3,100 F-35s on order through 2035, making Lockheed one of the best defense stocks for steady, long-term revenue. Currently, the fifth-generation jet accounts for about 25% of Lockheed's total revenue. Management expects the program's revenue will grow at a faster rate than the overall top line through the end of the decade, plus more and more allies want to buy the advanced jet. The United Arab Emirates is buying up to 50 F-35s, opening up the possibility of more sales in the region. Lockheed also produces Sikorsky military and civilian helicopters, as well as a variety of missiles and fire control systems. Additionally, its Terminal High Altitude Area Defense missile-defense system has seen a surge in foreign orders. They’re not resting on their laurels, as Lockheed has key hypersonic weapons contracts in the works; in September, the Defense Advanced Research Projects Agency said that Hypersonic Air-breathing Weapon Concepts (HAWC) from Lockheed and Raytheon successfully completed captive carry tests. But Lockheed's hypersonic missile prototype failed to launch in April in what was supposed to be its first flight test with the Air Force. Still, growth in hypersonic weapons is seen soaring. For 2021, Lockheed sees hypersonic weapons sales hitting $1.5 billion and sees that figure doubling to $3 billion by 2025. That's up from an estimated $1 billion in 2020 and $600 million in 2019. In space, Lockheed has secured major satellite deals and is developing the deep-space Orion spacecraft for NASA. Its joint venture with Boeing, United Launch Alliance, provides launch services for the Pentagon.
LMT Daily Chart:
BA YTD 2.31%
Known for its commercial jets, but its defense and space programs accounted for $6.88 billion in the second quarter. In 2020, defense revenue accounted for $26.25 billion, up 1% from its 2019 total. The aerospace giant has a market cap of $140 billion. Boeing has legacy fleets of fighter aircraft like the F/A-18 and F-15, which remain in production and have updates in the works. The Air Force is buying upgraded versions of the F-15 as well. In July 2020, Boeing received the first order in what could be a $23 billion contract to build F-15EX fighters. Boeing is also building the T-7 Red Hawk trainer jet for the Air Force, the MQ-25 Stingray aerial-refueling drone for the Navy, and the KC-46 refueling tanker for the Air Force (side note: I work on the KC-135 refueler. Air Forces current refueling platform alongside the KC10. The jet I worked on today was built in 1957 so upgrades are desperately needed). Its P-8 Poseidon maritime surveillance aircraft for the U.S. Navy has also proved popular among allied navies too.
BA Daily Chart
NOC YTD 20.28% -
Revenue was $1.04 billion in Q2 and $36.8 billion in 2020. Its market cap is $60 billion. This defense company is a major subcontractor on Lockheed's F-35 and produces drones such as the Global Hawk, while its purchase of Orbital ATK boosted its space offerings.
Another big moneymaker will be the B-21 stealth bomber. The Air Force plans to buy 80 to 100 planes to replace Cold War-era Boeing B-52s.
The Pentagon hasn't disclosed a comprehensive cost estimate, saying U.S. adversaries would be able to infer the B-21's capabilities. But so far, the Air Force has put development costs at $23.5 billion, and analysts estimate the total acquisition price tag could hit $80 billion.
On July 30, CEO Kathy Warden said the B-21 is scheduled to enter low-rate production in 2022 after reaching key developmental milestones. The first prototypes are under construction.
Northrop also is the contractor for the Air Force's Ground Based Strategic Deterrent (GBSD), which will replace aging intercontinental nuclear ballistic missiles. The total program is valued at $85 billion to $100 billion, marking another potential windfall for NOC stock.
NOC Daily Chart
RTX YTD 21.03% -
Raytheon and United Technologies completed their $100 billion all-stock merger in early April 2020 to become Raytheon Technologies (RTX). The new company has a market cap of over $132 billion after spinning off the Carrier and Otis businesses. The company reported Q2 revenue of $15.9 billion. Missile-defense systems are in high demand, making Raytheon one of the best defense stocks as threats from China, Russia, North Korea and Iran become larger priorities for the U.S. and its allies. Raytheon builds the Patriot missile defense system along with the interceptors for the Aegis air defense system.
The company also produces an array of missiles and munitions, perhaps most notably the Tomahawk cruise missile. Raytheon is a leader in radar systems and electronic warfare, and is also ramping up its cyberdefense capabilities and expanding its hypersonic technology.
GD YTD 34.89% -
Their revenue was $9.2 billion in Q2 and $38 billion in 2020, and the company is one of the top shipbuilding defense stocks. It's part of a team that's building Littoral Combat Ships, and its Electric Boat unit makes the Virginia-class and Columbia-class submarines.
In November 2020, the Navy awarded GD a $9.5 billion contract to build the first Columbia-class sub and start advance work on the second sub.
GD's Bath Iron Works also builds Arleigh Burke-class destroyers and Zumwalt-class next-generation destroyers. The NASSCO unit also builds auxiliary and support ships for the Navy, plus oil tankers and dry cargo carriers for commercial operators. General Dynamics is a top provider of land weapons systems too, building Abrams tanks, the Stryker family of vehicles, and Light Armored Vehicles.
GD Daily Chart
KTOS YTD -20.31%
Q2 Total revenues amounted to $205.1 million, increasing 20.4% from $170.4 million reported in the year-ago quarter. The year-over-year upside was led by organic growth in Kratos’ Unmanned Systems, Space, Satellite and Cyber, Rocket Support Systems and Microwave Electronics businesses. More than 70% of its sales come directly from the Defense Department.
KTOS Daily Chart
We actually ended up discovering through research that, regardless of the international climate, many of these tickers are approaching fantastic buy levels. In particular, we’re fans of LMT, BA, and KTOS for pops relatively soon; think about going long!
Our hearts are with Afghanistan and its innocent citizens, and the U.S. troops risking their lives to help; here’s hoping that there are better days ahead! ❤️
See ya ✌️
🌊 Pt. 3: Flow 302: Filtering Pt. 1
Powered by Unusual Whales Tools
What. Is. Up?!
Been getting a lot of questions about flow stuff, particularly how we’re setting our filters, so I had to dig back into the bag of tricks one more time. Filters honestly used to be something I kinda ignored, and over time, as I’ve written these, they’ve become more and more critical. Flow is flow, but not all flow is created equal—using filters can pinpoint anomalies that'll help you get higher trade confidence, and of course make more of those precious tendies.
This is going to be a deep dive where we give you a lot of context for things that I really could just tell you. Why? Because we like to teach a person to fish! Don’t view this as solely a do’s and dont’s tutorial, but also as a tutorial meant to explain some broader UOA principles while helping you learn to think critically about flow. If we just tell you what to do—rather than teach you why you do it—then you won’t grow as a trader, which is literally the whole point of The YEET.
Today we’ll talk about:
Ask-side filtering
Premium filtering
Expiration filtering
Filtering for ER plays (as we’ve done successfully 5 times in a row! Sorry, had to flex ONE time 💪!)
1⃣ - Ask Side Filtering
So I commonly get asked how I get my charts looking the way they do—the answer, my friend, is that ask-side filter.
❓What is it?: Buys on the ask-side mean that the contract order was placed close to or at the asking price for the contract. The Bid-Side is the opposite, meaning that the person (or Whale) lowballed their buy.
Why is it important?: This is a critical piece of knowledge for two reasons.
👍 The first is a general rule of thumb for options; an order close to the ask is a buy, and an order close to the bid is a sell. Don’t ask me why lol—it’s just the way it is. Luckily Unusual Whales tags take care of this difference by labeling them, but it’s something you should know now that you’re a real live trader without training wheels.
❗️❗️The second reason is that—and this key—ASK SIDE IS AN INDICATOR OF URGENCY. Think about it logically; the ask price is the highest amount you can pay for the order. If someone is buying a contract at or close to the ask, this means they want it bad.
How do you play Ask-Side Filtering: There is an obvious concern with using the ask-side; you filter out a lot of bearishness because, as mentioned, ask-side orders tend to skew toward calls at the ask. What do we do to know we’re not just looking with bias?
Make sure the ask-side bullishness or bearishness you’re seeing is at least 75% in either direction on your Flow Chart. Note: I make exceptions for this when the flow is divergent (see YEET 17 for understanding divergence). This gives us confidence that even though our ask-side filter has us skewed towards calls, for example, we’re over the margin of error/deviation.
Ask-side filtering example: SNAP
Take a look at SNAP at the end of day Friday (I picked a random ticker). If we search with a 10k premium filter without ask-side filtering we get this:
Now here’s what happens when we filter with the Ask-Side flow:
🦔 Hedging: Another reason I like to look toward the ask-side flow in these situations is the fact that call and put sales, in comparison to buys, tend to be more hedges than bets. If you’re a Market Maker with deep pockets, you can just sell covered calls against your position and exercise them if you gotta. No biggie for them but, given that we are not whales, this is something we don’t really do. The whole key to the game in flow is learning to separate hedges from buyers, so when I see ask-side flow this bullish I GOTS to give it a try.
2⃣ - Premium Filtering
So, if you follow my twitter or if you’ve seen plays in The YEET, you know we’re always playing around with premium filters to get just the right read. This is key to make sure you catch prime predictive flow, as opposed to flow that simply trails the price action throughout the day.
🤔 So now that you know where to enter your premium, what numbers do you actually enter? It’s a “feel” thing for me, but I thought long and hard, and this is the general rule of thumb I came up with to explain it:
❗️You want to be looking at the orders placed in the last hour if you’re looking for a play EOD or after hours, and at orders placed in roughly the last 20-30 minutes if you’re looking for a trade intraday. This is on a page with the standard 50 results per page.
🐳 Whales Flow is automatically set to 50 per page, but here it is in case you need to know where to change it:
Once you’ve done a lot of flow searching, you’ll know off the top of your head what premiums to use to get a given hour’s flow for many tickers (my sad reality).
Here's a quick premium guide for those new to this part of the process:
🦐 Small caps/mid caps/low premium stocks:
1k+ is a good starting point
Examples: BB, EXPR, GPS, M
BB example: 1k+ EOD Flow
😐 Most aka “your average” stocks:
5k+ premium is the best starting point, and if need be adjust to 2500 for more results, and 7500 for less
Examples: PDD, PTON, DKNG, PINS
DKNG example: 5k+ Ask-side Flow
🦍 Popular tech stocks/highly shorted, mid cap meme stocks:
10k-25k+ Premium filter
Examples: GME, AMC, AMD, SNAP
SNAP example: 10k+ Premium Filter
💪 Mega Cap stocks:
50k+ to 100k+ Premium Filters:
Examples: FB, AAPL, MSFT
Example: FB 50k+ Premium Filter
3⃣ - Expirations Filtering
There are three primary reasons to filter by expiration:
Helps you avoid hedging
Helps you confirm big moves in the near-term
Helps you build confidence in ER plays
🦔 Avoid following hedges:
Let’s think critically. In the beginning of the week, hope in the market springs eternal: weeklies are on the table, we haven’t surmised whether a stock will pump or dump, and there is still enough time that the bell curve of theta hasn’t completely fucked your OTM calls. As we progress through the week things begin to become more clear—and, for many an ape, hopeless. ⭐️ As we get to EOD Thursday or Friday, even the most surefire bets are speculative gambles if you’re playing 1DTE or 0DTE. At this point the big boys are placing orders more as algorithm-driven hedges than actual bets on stock movement.
❗️For this reason, as we get toward the end of the week, it becomes more and more necessary to filter out the flow of that week’s expiration, especially toward EOD Thursday and on Friday.
SNAP Example: Let’s look at SNAP again on Friday. The first is the ask-side flow without the 8/20 expiration filtered out:
Here is the SNAP 10k+ ask-side flow with the 8/20 filtered out:
If you need a different visual to show what I mean, look at the flow reading for SNAP at the end of the day. Do you see all these 8/20 expiring call orders placed on 8/20? And placed in the last hour of trading. Either someone is preparing for the news pop of a lifetime in the last hour of trading (lol yeah right), OR, more logically, they are expiring algo hedges.
💡 Here’s the general the idea for when I start filtering out the same week’s expiration:
Monday/Tuesday: Keep all expirations on, as flow could still be following news or a coming pop that week
Wednesday: Be more cautious and begin filtering tickers, looking at your reads with that week’s expiration both on and off for active comparison. If flow matches up for both, you can trust what you see.
Thursday/Friday: I turn the expiration filters for that week off entirely, no matter what, beginning pretty much after the open.
⭐️ BONUS: Expiration filtering using the flow chart:
A lot of people ignore this, but looking at the expiration on flow charts is critical. If you see large spikes in premium spent on close-dated expirations, you know that some type of move is likely coming. Conversely, if you’re focusing on the flow chart only and not the expirations, you may miss something like a spike in ITM LEAPs, for example, which are a nuanced sign that the flow may not be as good as it seems.
SNAP Flow from Friday Example:
4⃣ - Filtering for Earnings
Although there are a variety of signals for what the market expects for certain earnings, I tend to find filtering for orders expiring the week of earnings—and/or the first monthly expiration after ER—are pretty good indicators. Typically, I’m doing this analysis the Friday before ER to get a good feel, and if the ask-side flow sticks out to me (at 75% or above 😉) I consider it a strong candidate.
AMD ER example, our weekly ER choice from the YEET prior to their ER (screenshot for proof or it didn’t happen):
🤷♂️ Why we liked AMD: Flow expiration premium spikes the following week
I’m going to reverse engineer this a bit because I can’t filter out past expirations, but I can show you the historical flow chart (and therefore expiration read) from the day that we analyzed it. This screen is taken from Friday, 7/23, before AMD’s ER on Tuesday, 7/27.
The 7/30, the 8/20, and the 9/17 expirations all saw huge spikes in bullish activity leading up to the AMD 7/27 ER.
I use this strategy to infer whether the earnings report will be a beat, or reveal something else considered bullish like good forward guidance. What I do not assume is that it means that the stock will skyrocket; earnings are a fickle mistress, and depending on the mood of the market an earnings beat can lead to tendies or Wendy’s on any given day.
⭐️ BONUS ER tip: spotting diverging same-sector earnings flow:
Using the previous strategy, sometimes we build confidence in an earnings play by comparing expirations for for similar stocks. Often, these tickers will report within a day or two of each other, giving you a nice point of comparison for anomalous earnings news for a ticker.
DKNG and PENN examples:
DKNG Flow on 7/20, the Friday before their ER
PENN Flow on 7/20, the Friday before their ER
😏 You may be thinking “what’s the big deal, it’s a 14% flow difference’. Well, this is where expiration filtering comes in HUGE: you’ll notice there are also bearish spikes in premium for coming expirations as well, which means there could be more comparative hedging of PENN to DKNG, as there are no spikes in put premium for DKNG above. Given there is more bullish flow for rival DKNG, and virtually no spikes in put premium for DKNG as compared to PENN, that’s the horse I’m picking.
🤷♂️ What happened?:
Okay, I think that’s all the filtering you can probably handle THIS round. I’ve given you a TON to chew on. So here’s a graphic to help you remember!
Feel free to hit me up @yourboymilt, I try to answer when I can. Good luck out there! See ya later! ✌️
🪙 Pt. 4: Tales from the Crypto: A Closer Look at our Crypto Favs
Contributors: capybara & sourmik
Hey Y’all!
We covered a lot in the last 2 weeks and wanted to go a bit lighter on this Yeet. We’ll look at some spooky new Crypto regulation chatter, peep the last week, and end on some Alt plays!
There’s a brief note to make for clarification and accuracy, in our first Crypto write-up we said the following:
We're smokin up ETH right now and the smog looks unfriendly at a rate of approx 3.17ETH every minute. That’s over $9,000 at time of writing, gone every minute. So with an "upgrade to the network", coated with a slippery drizzle of FOMO (I mean, there are less now. And now. Aaaand now)
Though, the idea of Ethereum tokens dwindling (and becoming scarcer by the day) is primo bull food, a shrinking circulating supply is not actually the case here, nor will it ever be. New blocks (coins, essentially) continue to be created and unlike Bitcoin, which has a finite supply of 21M coins, Ethereum has no such limit. The Forks “burn feature,” while deflationary in practice, will never outpace the rate at which new Ethereum tokens are created - but it slows that rate down! At time of writing, the burn has done away with about 32% of newly issued tokens. Now if you’re not on the edge of your seat by now, this oughta get you there...You can watch the burn LIVE! We wanted a thrilling yule log christmas fire graphic, or the one with puppies and ducks, but I guess dull scrolling numbers will do.
https://watchtheburn.com
Now, onto spookier stuff:
Infrastructure Plan: Build Back Fuck Bitcoin
When you hear infrastructure, what do you think of? Roads, highways, a draw-bridge and a friendly troll? Well think again, troll-lover, ‘cause our tech-savvy lawmakers are serving up pork fat of digital DEATH! Nahh it’s not so bad, we’re just amped from watchin’ the ETH burn - here’s a summary:
What is it? An extremely vague redefining of the term “broker”, as it relates to Cryptocurrency trading and relative tax structure / reporting. Right now that term means...well, brokers. The expanded definition means a broker would be “anyone responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person” LOL.
But miners, network validators, and lots of people on a decentralized network “effectuate” transfers. That makes like, everyone a broker?
Woah! Should we be scared?
Nope! We don’t think so anyways. Fear on news is our only concern. The bottom line is...it’s impossible. Expanding, whimsical regulation lost it’s battle to Crypto before they knew it existed. That’s why decentralized tech is so cool! The Government can tax our gains, and they already do, but beyond that, (and we hope we aren’t proven wrong), applying very broad terms and conditions to the fundamentals won’t work. An adequate, sensical amendment to the language has already been introduced but even if that’s not considered, don’t be shakin’ in your boots quite yet.
Hah! Good, fuck any and all crypto regulations always!
Hah! That seems to be the general sentiment, but we think there are valid arguments on both sides. We look forward to arguing with ourselves about it soon :)
Where does the Infrastructure bill stand?
The bill has passed the Senate with an overwhelming majority, and is awaiting a vote in the House of Representatives which will come this week.
One final interesting note from our DD:
“The Federal Reserve, meanwhile, is considering developing its own digital currency pegged to the U.S. dollar. A so-called digital dollar could enable faster payments among banks, consumers and businesses.” We think they should call it *some clever name idk Milt can prob think of something.*
Alt Coin Plays
Luckily for you all, there are a stupid number of Alt coins, so we’ll keep dishing out plays to you. What do we have on tap? We’ll look at a couple of newer coins as well as one that has been around for a while.
Celo (CGLD)
CGLD has been trading on Coinbase for nearly a year, but in Crypto years this one would be old enough to buy a beer. What is it? Celo (CGLD) is a Crypto that acts as a utility and governance token for the Celo platform. The goal of Celo is to make it easy for anyone to send, receive, and store stablecoins that are on the Celo platform without needing a Crypto wallet. Transferring Crypto to different wallet addresses can be confusing and stressful, Celo wants to change that by allowing users to transfer Crypto via smartphone numbers. We are a bit surprised that CGLD is still trading at its current price and we think this is due for a nice pop. Let’s take a peek.
Entries: 3.18, 3.12, 3.00, 2.85
Targets: 3.41, 3.54, 3.80, 4.19, 4.38, 4.71
Quant (QNT)
Quant is one of the newer kids on the block, having just been released on Coinbase about two months ago. Unlike many new Crypto that fall substantially in price, QNT has been gaining momentum as time goes by. What is QNT? QNT has one main goal: it aims to provide interoperability between distributed ledger technologies (DLTs). What are DLTs? They are distributed databases and blockchains (ETH and BTC are a few examples). There is a movement by large banks, central governments, and public health operations to move to DLTs over regular databases. QNT wants to help entities that are using different DLTs bridge the gap between each other and be able to send information more seamlessly. Let’s take a look at the chart!
Entries: 177, 167, 150, 141, 120
Targets: 197, 203(ATH), the moon
Ampleforth Governance Token (FORTH)
Forth is a Crypto that powers the stablecoin Ampleforth. The goal of Ampleforth is to maintain a stable price by adjusting the number of coins available to the market every 24 hours to match the price of 1 USD. When demand for Ampleforth is high, supply will increase. When demand is low, supply will decrease. FORTH launched in April of this year and people who buy FORTH are supporting a stablecoin project that aims to do things differently. More importantly, we like what we see when looking with the FORTH chart.
Entries: 17, 16.60, 15.60, 15, 14
Targets: 18.30, 19.45, 22, 23.45, 26, 27.75, 31, 33.40
A note on Bitcoin and Ethereum
Over the last few weeks we have made the case for Ethereum pushing Bitcoin to be its best self. However, price action the last week between the two makes it look like Bitcoin is ready to party but Ethereum wants to stay home and watch a movie.
Bitcoin 4hr chart:
Ethereum 4hr chart:
What are the charts telling us? It seems as though Bitcoin is ready to keep ripping but Ethereum needs to take a breather. The small divergence we are seeing is curious, especially since Ethereum has been leading the charge as of late. It will be an interesting week ahead to see how this plays out. One thing we do know is this: the two largest market caps in crypto will not head in different directions for long. Either Bitcoin drags Ethereum out of the house to the party, or Ethereum will convince Bitcoin to stay home for some Netflix and chill.
We maintain our bullish outlook on the market, and think that any large dips should be looked at as points of entry.
Good luck!
👀 Pt. 5: The Whale Watchlist Picks
Made possible with help from the @unusualwhales Alerts and Flow Tool. Sign up here!
Contributors/Tipsters: @contactr2m (ROKU), @wesley_scalpz (AMD), @AJ_SM3SH (COIN), and the Ready-tubbies:
Whale WatchList:
📞Calls: ⭐AMD, COIN, ROKU,
👿Puts: ⭐ETSY, PINS
⭐️ = Milt’s Pick
📞 Calls:
1. ⭐️AMD Calls
I’m coming back to the gift that keeps on giving! After going like a billion% gains after our AMD ER pick, our favorite chip company has been snoozing. Well, the chart and the flow shows it’s time for the turnaround. Su, I should have never doubted your graceful guidance.
🐳 AMD: Unusual Whales Alert
🌊 AMD: Flow reading
📈 AMD: Flow Chart
⌚️🔨 AMD: Expirations and Strike
⌚️Expirations: 8/27, LEAPs
🔨 Strikes:110
📊 AMD: Chart
📝 AMD: Levels
Upside:
105.42, 108.6, 110.55, 112.4, 114.13
Downside:
103.1, 101.25, 98.55
2. COIN Calls
With all this $BTC DD that SourMilk and Capybara have been doing, I’d be a fool not to dive in with both feet. But, freal, the chart looks great on a nice breakout, and cryptocurrency is stretching its legs. Going to roll with these to keep myself from leveraging 10x on KuCoin.
🐳 COIN: Unusual Whales Alert
🌊 COIN: Flow reading (7500k+ Premium)
📈 COIN: Flow Chart (84% 🐂)
⌚️🔨 COIN: Expirations and Strike
⌚️Expirations: 9/3, LEAP
🔨Strike: 230, 260
📊 COIN: Chart (4 Hour)
📝 COIN: Levels
Upside:
261.5, 266.75, 271.94, 280.84
Downside:
253.82, 245.82, 238.12, 227.42
3. ROKU Calls
Looking to make a comeback after being on the rocket of rockets. Quiet on the alert front recently, but the other signals say yes. Premiums can be pretty crazy on this one, so don’t be scurred to do a debit spread.
🐳 ROKU: Unusual Whales Alert
🌊 ROKU: Flow reading (10k+ Premium)
📈 ROKU: Flow Chart (72% 🐂)
⌚️🔨ROKU: Expirations and Strike
⌚️Expirations: 8/27, 9/17, 10/15, LEAPs
🔨 Strikes: 340, 350, 400
📊 ROKU: Chart (Daily)
📝 ROKU: Levels
Upside:
372.8, 382.25, 390.95, 401.2, 413.55
Downside:
347.13, 329.75, 321.14
👿 Puts:
4. ETSY Puts
Finally time to go against Becky—a few things working against this ticker after a ripper on Friday. It’s at the top of a trend, AND has mad bearish flow.
🐳 ETSY: Unusual Whales Alert
None recently.
🌊 ETSY: Flow reading (7500k+ Premium)
📈 ETSY: Flow Chart (80% 🐻)
⌚️🔨 ETSY: Expirations and Strike
⌚️Expiration: 12/17
🔨Strike: 90
📊 ETSY: Chart (4 hour)
📝 ETSY: Levels
Upside:
202, 207.88, 213.07, 221
Downside:
194.25, 186.94, 182.14, 175.21
5. PINS Puts
I didn’t choose the Becky sector for puts—it chose me. Couldn’t help but notice this one had incredibly bearish flow pick up on the last hour of a bright green day. Interesting “maybe Delta is actually on the decline” poot play.
🐳 PINS: Unusual Whales Alert
🌊 PINS: Flow reading (5k+ Premium)
📈 PINS: Flow Chart (77% 🐻)
⌚️🔨 PINS: Expirations and Strikes
⌚️Expirations: 9/17, LEAPs
🔨 Strikes: 45, 65, 70
📊 PINS: Chart (Daily)
Note: watch for entry if the falling wedge fails at the top slope
📝 PINS: Levels
Upside:
54.11, 55.61, 57.2, 59.55
Downside:
52, 48.62, 45.45
🎲 Earnings BONUS: GPS Calls
IF I played earnings, I’d say that among the big retailers reporting this week they’ve potentially got the most surprise upside with multiple operations including refreshed success with Old Navy and Athleta.
IF I played earnings, I’d say that they have the most reasonably priced khakis in the game. And also they had some bullish Dark Pool activity.
IF I played earnings, I’d say to hope for a deflation from the Friday mega-green day to catch them at a nice entry.
If.
🐳 GPS: Unusual Whales Alert
🌊 GPS: Flow reading
📈 GPS: Flow Chart
📊 GPS: Chart
🌦 Pt. 6: Weather: SPY & QQQ Forecast by @daarkmaagician
Below is the chart & info for a SPY & QQQ forecast from @daarkmaagician, his DISCORD is the place to be (YEETers get two weeks free!). I’ve attached his accompanying text as an image with the photo below.
SPY/QQQ Charts Legend:
Solid Blue= ATH, Green= Dark Pool Buys, Red= Dark Pool Sells, Purple= Dark Pools, Orange= Supports/Resistances, Teal= 9ema
SPY Forecast:
SPY Charts:
QQQ Forecast:
QQQ Charts:
Spy channel theory: a dark hypothesis
A quote from the magician himself: ‘This chart is a SPX channel theory I’m testing. If my calculations are correct, SPY will hit the next box by 9/17’
Me: Look forward to seeing what happens, Dark!
Make sure you follow @daarkmaagician to get updates on the indexes daily!
Pt. 7: TLDR & GOODBYE ✌️
TLDR:
Pt. 2: Defense Sector DD: including BA, LMT, GD, NOC
Pt. 3: Flow 302: How to know which filters to use when.
Pt. 4: Crypto DD: Deeper look at the dynamic between cryto currencies and analysis of our favorite picks.
Pt. 5: The Watchlist —
📞Calls: ⭐AMD, COIN, ROKU,
👿Puts: ⭐ETSY, PINS
🎲ER Gamble: GPS
Pt. 6: Spy and QQQ Forecast by @daarkmaagician
Goodbye and thanks for reading! Questions, scoops, comments @yourboymilt or /u/alldatdalton. See you next week! ✌
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