Good morning, traders…
There’s an old saying in football: “Watch the linemen if you want to see where the play’s going.”
Quarterbacks might get all the attention, but the real strategy starts in the trenches.
The same goes for options. You can chase headlines, trends, squeezes, but the real edge comes from watching the Smart Money.
Friday was a perfect case study. MicroStrategy Incorporated (NASDAQ: MSTR) and Nike Inc. (NYSE: NKE) lit up my scanners like Times Square.
Repeater call sweeps, big premiums, and heavy conviction from institutional traders.
Then what happened? Both names gapped up over the weekend.
That’s not a coincidence. That’s why we pay attention to Smart Money order flow.
It’s math, probability, and pattern recognition. It’s reading the play before the snap.
No magic required.
But you’ve gotta be quick. Blink and you could miss these killer setups.
Here Are The Names Lighting Up The Scanner Today (And How I Plan On Trading Them)…
5 Charts Getting Huge Smart Money Flow
FuboTV Inc. (NYSE: FUBO)
FUBO is one of my top watches this week.
Why? We saw $4 calls hit the scanners with big sweeps. Meanwhile, the chart is compressing on the four-hour timeframe.
I’ve set an alert at $3.80.
If it breaks that level, I like the August 8th $4 calls.
Victoria’s Secret & Co. (NYSE: VSCO)
VSCO is another textbook breakout setup.
My scanners showed six big sweeps on the $23 calls, oversized premium at the ask.
On the daily chart, we see this beauty bouncing off the moving averages. I’m setting an alert to see if VSCO can get above the $21.75 area.
If it does, I like the August 15th $23 calls.
Merck & Co. Inc. (NYSE: MRK)
MRK is forming an “inverse head and shoulders” pattern.
This is a bullish reversal pattern that forms after a downtrend, signaling a new uptrend.
Think of it as the mirror image of a regular head and shoulders pattern, appearing upside down:
- Left Shoulder: The price falls to a low point, then bounces higher.
- Head: The price then drops to an even lower low than the left shoulder, before bouncing up again, often to about the same height as the peak after the left shoulder. This is the deepest low of the pattern.
- Right Shoulder: Finally, the price falls a third time, but this low is higher than the “head,” indicating that selling interest is weakening. The price then begins to rally.
- Neckline: This is a resistance line drawn by connecting the high points of the two rallies that occurred between the shoulders and the head.
To add to the pattern trigger, MRK reports earnings today.
Leading up to the print, Smart Money traders were buying MRK $95 calls on Friday.
Huge volume vs. open interest, big size.
If MRK can break above $85.30 post-earnings, I like the August 15th $95 calls.
Palantir Technologies Inc. (NYSE: PLTR)
PLTR has been getting absolutely hammered with Smart Money bets.
Sweeps on the $162.50 calls stacked up $1.72 million in volume yesterday.
PLTR is setting up for a run to $170-$172, with earnings on August 4th.
If it breaks above $161, I like the August 8 $172.50 calls.
When Will Rate Cuts Happen?
On Wednesday, we’ll get some crucial economic numbers: Durable Goods, preliminary House Price Index, and JOLTS jobs openings.
More importantly, Wednesday is the FOMC Meeting with Jerome Powell’s statement and press conference.
Analysts expect no change in policy, with a 97% chance of rates remaining where they are.
But Powell’s press conference could move the market as traders parse every word from the Fed Chair.
- September: This is when analysts think rate cuts will begin.
- October: Analysts predict rates will stay the same, but the potential for a quarter-point drop is increasing.
Here’s a prediction: In the next 12 months, we will see a 100-basis point cut in interest rates (a full % point).
Powell’s term ends in 8 months, and President Trump will undoubtedly appoint someone who will cut rates almost immediately.
That’s incredibly bullish for stocks. We’re already seeing the market front-run this decision, as evidenced by the recent rally in the major indexes.
This is prime time for bullish options traders.
Take advantage while the trend is still smooth, bullish, and relatively predictable.
Happy trading,
Ben Sturgill
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