Don Kaufman here.  Just wrapped up another appearance on Schwab’s Big 3, and I’ve got to tell you – this was one of those sessions where the obvious plays and the smart plays were pointing in completely opposite directions. You know me. I love finding opportunity where everyone else sees disaster. The Government Shutdown Nobody Cares About First things first – all this noise about the government shutdown? The market’s basically shrugging it off. It’s business as usual in the “circle of life” as I’m calling it now. Oracle talking to OpenAI, throw some Nvidia in there… the cycle just keeps spinning. But here’s where it gets interesting for traders like us. Three Setups That Caught My Eye I brought three completely different plays to the table today, and honestly, they tell the story of where we are right now better than any market commentary could. Play #1: Following the

Don Kaufman here.  I was staring at two butterflies this morning and the market wanted to charge me $1.15 for a call butterfly that I could get for 35 cents on the put side.  Same damn trade.  This is exactly why most traders lose money – they don’t understand how skew is robbing them blind. Here’s what happened.  We were in one of those “slop fest” days where the S&P was basically dead flat, down a whopping 9 handles.  Perfect butterfly weather, right?  So I looked at two butterflies: one targeting the downside around 6560, another targeting 6730 on the upside. Both $15 wide. Both targeting roughly the same distance from current levels. The put butterfly? Trading for 35 cents. The call butterfly? Over a dollar. Holy crap.  How can you make a logical argument that you should buy the call butterfly over the put butterfly?  You can’t. I wouldn’t

Don Kaufman here. I woke up this morning and the S&Ps were up 40 points.  By the time I hopped on my live trading room session, they were already cut that in half. But here’s what’s got me perplexed – and this is the signal everyone’s missing. The Market That Doesn’t Trust Itself When you’re watching the S&Ps, trade on low volume in the pre-market, it tells you something. Lower contract size means there’s just not a lot of capital confirming what you’re seeing on the screen right now. But here’s the kicker – and I’m dead serious about this: trust nothing you’ve seen in the pre-market. The Vol Signal Nobody’s Reading Here’s what’s got everybody perplexed, including me: the vol futures. When I say volatility futures are “on fire,” you’re thinking, “Dude, they’re flat. What the hell are you smoking?” Exactly my point. They’re flat with the S&Ps up

Don Kaufman here.  Markets just hit the warning signal I’ve been waiting for. 87% of stocks moving in the same direction this morning.  That’s not bullish or bearish – that’s the setup for something much bigger. I talked about this literally yesterday.  The sign of big moves coming? High degrees of correlation.  When everything moves together, the market’s about to make a much more substantiated move. Here it is happening live. Here’s what correlation actually tells you… It’s not about direction. It’s about stretch. This morning’s advance-decline line hit 87 to 13. Full blown correlation. When you see numbers like that, the market is coiled tight. Physics takes over – things snap back. I’ve had way too much caffeine this morning, but this is textbook. Yesterday I warned about correlation being the precursor to big moves. Today we’re seeing it play out in real time. The reversal is already starting.

Don Kaufman here.  At 9:34 AM this morning, Tesla dropped $7 in four minutes. “That crap should not be occurring,” I called it live in the TheoTrade Chatroom. Even at 60% implied volatility, the math doesn’t support moves that violent, that fast. Then something fascinating happened. The market bounced. Not because of fundamentals or Oracle selloffs or rising yields. It bounced because it hit my levels. I drew those lines Friday. Hit exactly today at 6580. Made 145% on my butterfly while teaching the breakdown point live: 6564. Welcome to the new market reality: Expected moves aren’t suggestions anymore. They’re mathematical prison bars. The Entire Trading Community Revolves Around This Now Twenty years ago, I could trade fundamentals. Company earnings mattered. You could buy good companies on dips and hold with conviction. Not anymore.  This morning’s chaos wasn’t about Oracle’s AI deals or unemployment claims.  It was about algorithmic respect

Don Kaufman here.  The sector rotation game is getting dangerous. While everyone’s watching the S&P bounce around breakeven, here’s what’s actually happening: We’ve got a 50/50 advance-decline line with tech getting hammered underneath. That’s not healthy market action—that’s the setup for something bigger. And frankly, after 48 hours of trillion-dollar AI spending announcements, I think we finally jumped the shark. I’m making three bearish trades today. First one’s Broadcom. Everyone’s still buying the AI dream, but I’m seeing something in the options market that has me backing up the truck on the downside. There’s an extreme condition developing that historically doesn’t end well for tech stocks. Second is Eli Lilly. The GLP-1 gold rush just got a lot more crowded, and there’s a fundamental shift happening that most people are missing. The chart’s telling a story about what’s coming next. Third one has me seething bearish: Goldman Sachs. Up 40%

Don Kaufman here.  After +20 years in this business, I know which traders survive market chaos. And which ones get their heads ripped off. Yesterday, the S&P moved a whopping 30 points. And 71 million option contracts traded.  Last Thursday and Friday?  84 million and 83 million respectively. Those are the three highest option volume days on record. For perspective: we moved 30 points and traded more options than during most crash days. This isn’t normal market activity.  This is warning shots getting louder. The Bubble Everyone’s Missing Everyone’s focused on NVIDIA at $4.4 trillion.  Yeah, it’s suspect.  But that’s not where the real risk lies. The real risk is in all the pieces of crap that got pulled higher. Goldman Sachs is up 168% over three years.  Is this company literally 168% better off? What exactly have they revolutionized? Want to know how broken these companies really are? I

Don Kaufman here.  Last Thursday, we traded over 84 million option contracts. The average is 58 million. Nothing happened in the market that day. Nobody in the industry can explain why. Let me paint the picture: Wednesday, Thursday, and Friday of last week were some of the quietest trading sessions I’ve seen.  If the market’s heartbeat was this flat, you’d be dead. One sign of life on Wednesday around the Fed announcement, then back to meandering like a drunk in the woods. The Volume That Doesn’t Make Sense 84 million option contracts on Thursday.  To put that in perspective, the only times we see numbers this big are during market panic – like the selloffs back in April.  But April was pandemonium. Last week was a snoozefest. I’ve been asking buddies across the industry the same question: “Have you ever seen volume this significant without heavy volatility?”  Everyone’s saying the

Don Kaufman here Someone asked me my win rate on a webcast yesterday and I turned red. Seriously. Like, I get so pissed at that question it’s almost as bad as when somebody says “quadruple witching.” My blood pressure spikes and I want to reach through the screen. You know why that question makes me furious? Because who the hell cares what your win rate is? I could be wrong 90% of the time and still crush it.  In fact, that’s exactly what happened during one of the most profitable periods of my trading career. The Crisis-Seeking Years Back in 2007-2008, I was flying all over the world for Thinkorswim. Singapore, you name it. I literally couldn’t sit in front of screens all day for about two years because I was constantly on planes – and this was before internet on flights. So I switched everything to what we call