In 1974, Muhammad Ali did something nobody had ever seen before.
He let the most feared boxer on the planet, George Foreman, hit him. Over and over again, for eight rounds.
On purpose.
The crowd watched in horror, while his corner men begged him to fight back.
But Ali was just waiting, planning, and reading the fight…
When he finally came off those ropes, it only lasted about ten seconds.
Ali landed a clean combination. Foreman went down, the ref counted to ten, and that was that.
Fight over.
This market has been hitting you for six weeks. Tuesday’s relief rally was like that tenth second of Ali-Foreman.
And the options market turned it into one of the most violent single-day moves in recent memory…
6 Weeks On The Ropes
Let’s be honest about what the last six weeks actually felt like.
We’ve seen the longest weekly losing streak for the major indexes since 2022, the VIX above 30, oil near $100, and the Nasdaq deep in correction territory.
That’s what eight rounds of Foreman haymakers feels like in a portfolio.
And just like in that fight, most of the crowd has already written the ending and stopped looking for setups.
The moment everyone stops looking is exactly when it’s time to start.
4 Clues That A Reversal Was Imminent
I didn’t predict Tuesday’s rally. I look at market internals, and gauge my risk management accordingly.
And at the beginning of this week, the numbers were hinting at a potential reversal.
The VIX
When volatility spikes above 30, and then starts to stall, bounces tend to follow. The fear and uncertainty get overpriced in the options market, leaving the opportunity for enormous single-day moves on the side of the reversal.
Key Support Level
The Invesco QQQ Trust (NASDAQ: QQQ) was pressing against a key support zone near $558. That level had held twice in the prior week. A third hold on declining volume is a bottoming signal. This coincided with the index’s daily chart touching an RSI of 22 (a level not seen since last April’s Liberation Day sell-off).
End-of-Quarter Rebalancing
The quarter ended on the last day of March. Institutional rebalancing into quarter-end creates real buying pressure that has nothing to do with headlines or sentiment, leading to violent upside moves regardless of the news.
Smart Money Flow
The flow on my OMEN Scanner has been quietly shifting into more bullish positioning. The signals are there for anyone willing to take the time to read them.
Ali didn’t throw the first punch in round one. He waited until he knew exactly where Foreman’s hands were.
And after Tuesday’s reversal, we have a better picture of the current market direction.
Use it.
How Zero-Day Calls Gained 3400%+
QQQ gapped up at the open on Tuesday and never looked back. By the close, it was up 3.34% on the day.
But that’s nothing compared to the zero-day calls, which posted some mind-boggling gains…
The QQQ Mar 31 $570 Call opened Tuesday worth pennies and closed up +2880%.
The $573 Call finished up +3441%. The $567 Call up +2155%.
Look at the orange chart here, showing the QQQ 3/31 $573 calls intraday move:
These contracts moved from $0.14 to over $4 in ten minutes, eventually hitting a high of $5+.
Absolutely stunning returns you could never get outside of the options market. Did I trade these? No. Did I alert them? No.
But I’m sharing these insane moves to show you the power of a well-timed asymmetrical options trade.
What This Means For The Stock Market
The major indexes are still below the key moving averages, and the macro headwinds haven’t gone anywhere.
I’m definitely not telling you to load up on calls into a long weekend.
I’m pointing out that the conditions for explosive moves are fully alive in this market.
The setup was readable. The signals were there.
You just have to know how to identify, execute, and manage the positions.
Ali didn’t go into that ring swinging wildly. He had a plan, waited for his moment, and struck aggressively when the conditions were perfect.
Take the same approach in your trading this week.
Be good (and be good to others),
Ben Sturgill
*Past performance does not indicate future results
