Thanks, Matt.  In your opinion, which is the better play regarding ROIV:  buying a break of the blue downtrend line or waiting for a break of the horizontal resistance?  Suspect you will say the former is more aggressive, the latter more conservative. 

The implication being that either way (debt ceiling increase OR default) the SPY is likely to drop...and positions in the inverse ETFs (SDS, SH, SPXU, SSO or UPRO) would do well? Of course timing is everything.

Excellent newsletter, Steve.  Easy to follow commentary.  

I'm wondering if either you or Matt could flush out thoughts around the debt ceiling fight.  Given the political backdrop, I'm not sure this time around it will resolve prior to a crisis.  Is there a way to protect investment assets or hedge short term as the deadline rapidly approaches (as you imply, quicker than most realize)?  Is there a play linked to the US dollar, interest rates (TLT?) gold or something else to consider if one is skeptical that a solution is upon us? 

Completely agree with your sentiments.  Unfortunately, I suspect greed will win the day.

Reflection of poor management and misguided decisions.

Reminds me of the mid-1980's when I was head administrator for one of the largest IP law firms in the country.  Business was booming...our client list was a who's who of corporate America...partners were making more money than they ever dreamed of.  One young partner on the management committee at the time wanted to squeeze some additional profit and thought the way to do so was to require associates and staff to sign for legal pads, pens and pencils, etc. whenever they needed to replenish their supply. Penny wise, pound foolish, that partner became the laughing stock of the law firm.

Will fractional reserve banking be put to the test?  You have to wonder if Yellen is just a little bit worried when you see headlines like this: 

https://www.cnbc.com/2023/03/22/treasury-will-do-whatever-it-takes-to-ensure-savings-remain-safe-yellen-to-tell-senators-.html

What he should have said:

"Effective immediately, banks are precluded from investing deposits in anything other than short-term government paper."  

It was the 10 year bonds purchased when interest rates were extremely low that got SVB (and likely other banks) into trouble.  Banks shouldn't be allowed to reach for yield.

Gold up $31 on the day; miners barely notice.

Be aware: If you're trading inside a retirement account (401K, profit sharing), you will still receive a K-1 for any LP you bought and sold...even if the transaction was with pre-tax money.  I try to avoid those equities as well.

Any correlation between the depth of the inversion and the severity of the recession to follow?

The telltale sign that housing prices were peaking this time last year?  Sellers refusing to accept offers that included a contingency to inspect the property.  I feel bad for the naive first time buyers caught up in the frenzy ("the fear of missing out"), and loathe the real estate agents who advised it was no big deal.  Buyer beware never more relevant

Just checked KALA out of curiosity.  At year end this stock went from $4.00 to $55.00 in 5 trading days on volume of approximately 121M shares.  Has drifted down from $55.00 to $10.00 over the next 38 trading days on volume of approximately 25M shares.  Volume has literally disappeared (6.000 shares traded so far today).  Anything to read into this?  Can a flag last that long?  Trying to learn.

Crazy, but just to be clear that 17.1% is a YEAR OVER YEAR comparison to the 4 week period ending February 19, 2022...NOT a 17.1% increase from mid-January 2023 to mid-February 2023 as some may read it.  Still hits the consumer hard. 

Thanks for all your work on these systems, Matt.  

For what it's worth,  I would prefer one clear and concise message just after the close (when a system takes a trade or closes one out)...rather than a series of email notices or postings that give a heads up of a "possible trade" coming.  Seems reasonable knowing the ETF's trade for several hours after the close.  

Doing it that way puts the responsibility on each subscriber to check in at 4:00pm, and limits the amount of comments you feel compelled to respond to. Today in particular I found the system trade comments in the trading community quite a distraction (all for nought, I might add). A lot of unnecessary back and forth as it turned out.

KALA: How much room is too much room??

Like a few others, I too got in and out of Kala for a $2.00/share gain  earlier today.  Volatility was insane on the 5 minute chart.  Rode it up to mid $18's before it dropped briefly like a stone stopping me out at $18.15.  Gave it what I thought was enough room ($0.50 spread when it seemed soon to correct from $18.65) but it wasn't sufficient.   Watched it pause then rocket another $3.00 higher before tailing off.

Movement like that is indeed rare.  Wondering if Matt or Steve can provide some guidance on how to trade high intraday volatility.  Even viewing the 5 minute chart I felt I couldn't keep up.  Does it come down to instincts (greed and fear) or can the technicals help?  Made $$$ so I'm pleased, but can't help but feel I could have done better managing the position.

Thanks, Steve.  Last Friday I caught a $2.00 gain in the blink of an eye using 5 minute candles.  Thinking of using the same given the likely volatility if/when this stock moves again. Does that make sense? 

Matt: Are you still monitoring KALA?

Or has it drifted lower for too long to be considered a light volume pullback likely to pop again?

Caught it using the 5 minute chart.  $2.00/share gain and out in less than 5 minutes.  Probably left some on the table, but I'm pleased.  wicked volatility.

Goldman Sachs just reported.

Earnings of $3.32/share vs $5.48/share "expected".  

Reported at 6.5% YOY (0.1% lower than last month).  That used to be a recipe for disaster.  now it's seen as good news; crazy. 

Cost of living continues to be unaffordable for many.  Prices would have to drop (not increase at a slower rate) to actually make a difference.  That requires a negative YOY number, which is not in the cards anytime soon.