Billy Ray Valentine

Capricorn

[GlobalObserver @GlobalObs_HQ]

Dealer gamma flipping from record low to near record high perfectly explains this melt-up.

Market makers are now forced to keep buying as prices rise, which creates that self-reinforcing momentum. It feels unstoppable right now.

But this is pure mechanical euphoria, not real strength. When the tide turns or a negative catalyst appears, the same dealers will have to sell hard on the way down. These extreme flips often mark the final phase of a rally, not the beginning of something sustainable.

We're riding a gamma wave, not a healthy market. Stay alert.

[Armaan Sidhu @realarmaansidhu]

Dealer gamma just flipped from record low to near-record high.

Goldman is publishing what every options trader has felt for two months.

Dealer gamma is the aggregate market-maker option exposure that determines whether the S&P 500 moves more or less than it should. Positive gamma means dealers buy dips and sell rips to hedge, which compresses volatility. Negative gamma means dealers sell dips and buy rips, which amplifies volatility. Record low gamma in February meant every selloff cascaded. Near-record high gamma now means rallies and selloffs are getting muted by dealer flow.

The transition from record-low to near-record-high gamma in 90 days is one of the fastest flips in dealer positioning since 2018. The mechanism is the put-spread unwinds and zero-day-to-expiry call buying that filled order books in March and April. As volatility normalized, dealers found themselves long gamma into a recovering tape. They now hedge the opposite direction they were hedging in February.

What this means in practice. Expect tighter daily ranges. Expect less follow-through on news. Expect cleaner mean reversion. Stops get hit less. Trends die earlier.

Equity vol is going to keep compressing here. The VIX is going to grind lower than fundamentals justify because dealer hedging is suppressing realized vol. That suppression itself is what created the conditions for the February crash. Once gamma resets again, the cycle starts over.

The market isn't calm because risk is gone.

It's calm because the dealer book is short volatility into a tape that won't break.

Watch what dealers do when gamma flips back negative.

It always does.

The longer the suppression, the louder the rebound.

[Jay Kaeppel @jaykaeppel]

Have commodities overtaken stocks? One never knows for sure, but the signs are accumulating. Remember you can get exposure via ETFs without having to trade futures contracts. $PDBC $GCC $GSG $CTA $COM
@sentimentrader

[Lance Breitstein 🇺🇸🌎 @TheOneLanceB]

THE "CONSISTENTLY PROFITABLE" SKILL GAP & THE MYTH OF SUPPLEMENTAL INCOME FROM TRADING

For many new traders or part-time traders, there is this pervasive belief that with some time and effort, they'll be able to make "just" a few grand per month to supplement their income. Or they "don't want to aim big, they just want to replace their current salary via trading so they can have more freedom."

This is because people mistakenly believe that trading is like most other jobs, rather than it being a winner-take-all performance endeavor more akin to becoming a professional athlete.

99.9% of athletes will never make a dime professionally. There is no market demand for your average high school or college player. To even make league minimum in the NBA, you are still in the .0001% of basketball players. There is no such thing as just deciding to casually make a few grand as a pro athlete.

Think about what it takes for someone to make $50k/yr as a golfer? The skill gap to earn an income or make the league minimum is crazy to comprehend. The analogy I gave with @AT09_Trader was the story of Brian Scalabrine.

Even though Brian Scalabrine “sucked” in the NBA, he would absolutely annihilate 99.9% of the people calling him trash. He once said the famous line that he’s closer in skill to LeBron James than his haters are to him, and that line perfectly explains trading. The gap between unprofitable and elite looks massive from the outside, but the real canyon is between unprofitable and making any amount of money consistently.

People look at a trader making $1M a year and think that’s a different species. They assume someone doing $100k a year is basically the same as the guy still blowing accounts, just with better luck. That’s like saying Scalabrine and your friend who plays pickup on Tuesdays are basically equal because neither is LeBron.

Going from $0 to consistently profitable is the hardest jump in trading. You CANNOT just casually make a few grand per month or supplement income part-time. The skill level needed to consistently make ANY AMOUNT trading is the equivalent of being in the league.

A trader who can pull $100k a year out of the market is not “kind of good.” They have competency in finding edge, executing trades, handling their psychology and risk management, and are competing in the league. From there, scaling to $300k, $500k, even $1M is usually a function of size, capital, and refinement, not a complete identity shift.

But the trader still stuck at breakeven or red? They’re not one tweak away from $100k. They’re not “basically there.” They’re still trying to prove they belong on the court at all.

The uncomfortable truth is this: the distance between $0 and $100k is far greater than the distance between $100k and $1M. One requires becoming a professional. The other simply just requires becoming a more refined one.

My confidence in taking a trader from $100k to $1m is probably 10x higher than my confidence in taking a trader from $0 to $100k.

[Jurrien Timmer @TimmerFidelity]

One emerging narrative resulting from the Iran conflict is that Iran will more or less control the Strait of Hormuz with a “toll booth” approach and that countries might pay those tolls in Yuan or crypto. Meanwhile, the exporting countries might have to liquidate some of their gold reserves or Treasuries to offset their shortfalls. I don’t know if this thesis is true, but the easy way to test it is with the chart below. On the left is Bitcoin and the Polymarket odds of the Strait reopening, and on the right is gold and the number of crossings through the Strait. A new high frequency chart to add to the mix.

[Andrew Thrasher, CMT @AndrewThrasher]

RSI has gone from under 30 to over 70 in 15 days just two prior times since 1980: Nov. '16 & Aug. '82. It's not quite there yet but it's very close.
$SPX $SPY

[Goshawk Trades @GoshawkTrades]

this Columbia Business School lecture on price momentum will change how you think about trading.

he explains the exact portfolio construction behind big hedge funds, why momentum is so powerful, and a strategy that turned $1 into $41,000.

25 minutes. free. bookmark it.

[Warren Pies @WarrenPies]

The last 10-days have been unlike any 10-day period in the market since 1950.

First, the S&P 500 is up 9.8% in 10-days, which is in the 99.7th percentile of all 10 day returns.

[InvestmentGuru @InvestmentGuru_]

PHOTONICS / OPTICAL STACK — THE FULL VALUE CHAIN

“The layer below the chips” — AI’s real bottleneck

Layer 1 — Materials
Foundation of everything (InP, fiber, wafers)
$AXTI $GLW $COHR

Layer 2 — SiPh Foundries
Where photonic chips are fabricated
$TSMC $GFS $TSEM

Layer 3 — Lasers (Bottleneck)
EML + CW lasers — tightest supply in the chain
$LITE $COHR $AAOI $FN

Layer 4 — PICs (Optical Chips)
Integration layer replacing discrete components
$POET $LWLG $MRVL $AVGO

Layer 5 — Transceivers
400G → 800G → 1.6T data movement
$CIEN $AAOI $LITE $COHR

Layer 6 — Co-Packaged Optics (CPO)
Next-gen architecture — optics + silicon combined
$NVDA $AVGO $MRVL $COHR $LITE $ALAB

Layer 7 — Optical Switching (OCS)
Routing light without electrical conversion
$CIEN $COHR $LITE

Layer 8 — Networking Systems
DCI, long-haul, metro infrastructure
$CIEN $ANET $NOK

Layer 9 — Test & EDA
Hidden backbone enabling scale
$KEYS $FORM $ANSS

Layer 10 — Demand Drivers
Hyperscalers pulling the entire chain
$NVDA $META $GOOGL $MSFT $AMZN

THE BIG PICTURE (2026–2027)
- AI demand is exponential
- Electrical interconnects are hitting limits
- Optical = the only scalable solution

Key Constraint: Laser supply (InP → EML/CW)
→ Bottleneck today = pricing power tomorrow

This isn’t a single stock trade.
It’s a full-stack infrastructure shift — like semis in the early 2000s.

The winners won’t just be chipmakers…
They’ll be the ones enabling light-speed data movement.

Not financial advice. DYOR.

Bookmark this, retweet for others

[Jeff Sun, CFTe @jfsrev]

Simple way to read RVOL: use a Projected Volume Display (per‑second run rate) — via @finallynitin free script. (eg. $SOFI)

https://t.co/c3bJxT8tHk

[Julian Komar 🚨 Market Update Premium @BlogJulianKomar]

A lot of traders fail because they act when they shouldn’t—and freeze when they should act 👇

Here’s the framework I follow every day:

1) Do nothing without an edge: If the setup isn’t clean, I sit on my hands. No forcing. No “almost.” Patience is part of the system.

2) Wait for real opportunity: Strong stocks. Clear structure. Proper risk. If it’s not obvious, I pass.

3) Act aggressively when it’s there: When the edge shows up, I don’t hesitate. No fear. Just execution.

4) Stay process-focused: No expectations. No emotions. I trade what I see and improve a little every day.

No noise.
No pressure.
Just repetition.

[Andy Constan @dampedspring]

Saturday 3/28 SPX 6400. Expect a sizable dip on Monday and "Nothing but a buyer"

Saturday 4/11. SPX 6820 buying puts last week at current levels . Just doing what we do.

[Finn Stockinger @FinnStockinger]

2028: The Year the Lights Go Out for AI Clusters?

The AI industry has officially shifted from a "Compute Crunch" to a "Photonics Panic."

$LITE CEO Michael Hurlston just delivered a seismic warning: if current order rates for US hyperscalers persist for just two more quarters, their production capacity will be completely sold out through the end of 2028.

This isn't just a corporate milestone; it’s a structural ceiling for AI growth.

When the market leader closes its books for the next three years, the "Optical Nervous System" of AI becomes the most valuable commodity on Earth.

1⃣The Direct Capacity Alternatives (Primary Laser & Module Sources)

As hyperscalers scramble for slots that Lumentum can no longer provide, they are diverting billions to the only other firms with high-volume production lines:

➡️Applied Optoelectronics $AAOI:

The primary beneficiary of the spillover. Their strategic partnership with Microsoft and massive Texas-based manufacturing capacity makes them the immediate "Plan B" for 800G and 1.6T modules.

➡️Coherent $COHR:

Lumentum’s most formidable rival. They hold a massive share in EML (Electro-absorption Modulated Laser) technology.

With LITE full, Coherent becomes the default gatekeeper for high-end optical capacity.

2⃣The Foundry & OSAT Layer (Manufacturing & Advanced Packaging)

These firms provide the physical fabrication and specialized assembly services for the industry's biggest players:

➡️Tower Semiconductor $TSEM:

A crucial "Foundry" player. They specialize in Silicon Photonics (SiPh) fabrication, acting as the factory floor for fabless designers who need to integrate light onto silicon at scale.

➡️Fabrinet $FN:

The "Gold Standard" of optical contract manufacturing.

They physically assemble the complex modules for Nvidia, Cisco, and Lumentum.

A sold-out industry means Fabrinet’s high-precision lines are the most contested real estate in tech.

3⃣The "Intelligence" Layer (DSP & Architecture Control)

Hardware is useless without the silicon that manages the signals.

This layer dictates the efficiency of every photon:

➡️Marvell $MRVL & Broadcom $AVGO:

The duopoly in DSP (Digital Signal Processors). Every laser module requires their silicon to "talk" to the GPU.

Marvell’s TERA platform is the mandatory brain behind the 1.6T era.

➡️MACOM Technology $MTSI:

The pioneer of LPO (Linear Pluggable Optics). By removing the power-hungry DSP in specific short-reach links, MACOM offers a "power-saving" escape hatch for data centers hitting their electricity grid limits.

4⃣The Innovation Accelerators (Bridging the Supply Gap)

With traditional capacity blocked, these innovators are accelerating "Next-Gen" architectures to bypass the bottleneck:

➡️Sivers Semiconductors $SIVE:

A leader in external light sources (CW-WDM) for CPO (Co-Packaged Optics).

Sivers is essential for moving the laser from the pluggable module directly into the processor package - the holy grail of efficiency.

➡️Alumea $ALMU:

A specialist in high-efficiency silicon photonics engines, streamlining the transition to 1.6T and 3.2T speeds where traditional optics fail.

➡️POET Technologies $POET:

Their "Optical Interposer" is a motherboard for light, allowing for radical miniaturization and lower-cost assembly compared to traditional "active" optical alignment.

➡️Lightwave Logic $LWLG:

Developing proprietary electro-optic polymers. These materials modulate light at speeds (200G+ per lane) that standard inorganic crystals struggle to achieve.

5⃣The Transport Giants (DCI & Global Infrastructure)

Data must move between clusters and across continents. These firms control the "Inter-City" light:

➡️Ciena $CIEN: Their WaveLogic coherent optics are the global standard for long-haul Data Center Interconnect (DCI).

➡️Nokia $NOK - Optical Networks (NOC):

They provide the high-capacity optical transport and carrier-grade routing that form the literal backbone of the global AI internet.

6⃣The Quality Gatekeepers (Testing & Validation)

In a world of scarcity, a single "dud" laser can take down a $10B cluster.

Yield is everything:

➡️Aehr Test Systems $AEHR:

The kings of wafer-level "burn-in."

Their FOX-XP systems test thousands of lasers simultaneously under extreme stress to ensure they don’t fail after installation.

➡️FormFactor $FORM:

They provide the ultra-precise "probes" and test systems that validate optical performance on the wafer before it is even cut into chips.

7⃣The Atomic Foundation (Raw Materials & Substrates)

The "Bottleneck of Bottlenecks."

No substrate = no laser.

Period.

➡️AXT Inc $AXTI:

A critical supplier of Indium Phosphide (InP) wafers—the physical medium required for the high-performance lasers that drive AI.

➡️IQE PLC $IQE:

The masters of Epitaxy. They "grow" the complex semiconductor layers on wafers atom-by-atom. IQE is the first point of failure in the global supply chain.

➡️Soitec $SOI.PA:

The dominant provider of SOI (Silicon-on-Insulator) wafers, the essential building block for the entire Silicon Photonics movement.

⬇️Executive Summary: The Photonics Supercycle

A situation where a market leader (Lumentum) sells out production nearly 3 years in advance happens once a decade. This means the speculative phase of AI has ended, and the phase of brutal infrastructural execution has begun.

Key Investor Takeaways:

▶️Seek "Available Capacity": If LITE is full, capital and orders will immediately flow to AAOI and COHR.

▶️Watch the Foundations: Without wafers from AXTI and processes from IQE, not a single additional laser can be built. These are the true "Gatekeepers."

▶️Bet on Quality: With such massive production scales, errors are inevitable. Testing companies like AEHR and FORM will benefit from every photon produced.

▶️Innovation is Mandatory: New architectures like LPO (MACOM) or CPO (Sivers/POET) are no longer just curiosities, they are the only way to prevent AI from "suffocating" due to energy and bandwidth limits.

⬇️Question to the Community:

Analyzing the current supply chain and the fact that optical infrastructure is becoming the new "AI bottleneck", which of these companies would you invest in today at their current market valuation?

Which one has the highest potential for a "re-rating" in the coming quarters?

Let us know in the comments by dropping the Ticker! 👇

[Macro Charts @MacroCharts]

Stunning charts from GS — big extremes here:

[Goshawk Trades @GoshawkTrades]

https://t.co/UmPsYPesnW

[Billy Ray Valentine @BRV99]

@MBjegovic @MikeZaccardi @fundstrat @fs_insight And if oil spikes to $150/bbl that's just a 1 time price increase-- that's not a contribution to inflation.

[Billy Ray Valentine @BRV99]

@Chasingpaperbro @Braczyy I found similar variance. ATR may be calc differently on the different platforms as a function of mov avg used (WMA vs. SMA, vs EMA, RMA etc.)

[Ryan Detrick, CMT @RyanDetrick]

The S&P 500 consolidating above the 40-week MA is textbook to me and suggests new highs won't be far away.

But again, the US is simply following the rest of the globe that is already breaking out to new highs and is in a major global bull market.

[Roy Mattox @RoyLMattox]

Today was an expectation breaker. Fueled by Elon Musk ending his bromance with Trump, the market dived precipitously. Musk began the war when he exclaimed, the big beautiful bill in the Senate was an abomination. The rhetoric heightened when Musk said Trump would not have been elected without him and he called for his impeachment. That set the stage for many leading stocks to reverse and trigger sell signals. We took defensive action today to protect further downside and sold all of our indexes $Mags, $Tna, $Mdy as well as taking profits in $Ibit, $Gev, $Pltr, $Tsla, $Hood among others. Today was uncharacteristically disappointing and we would not be surprised for further short term weakness. With that in mind, we raised the most amount of cash in a single day in 5 years. There will be a silver lining from this reset but we know not to fight a potential trend reversal that occurred today. While today was nasty, we are still up for the year. It has been a very challenging year to navigate, The good news is that once this market volatility subsides, it will lead to terrific results. Stay tuned.

[Markets & Mayhem @Mayhem4Markets]

Hedge fund gross leverage is now irresponsibly high, at the 99th percentile. They're going to need to buy more longs and cover more shorts to level out their net leverage levels.

Chart: Goldman Sachs