• Current read is 45 on the fear greed index vs 56 last week.

• Market Fearful = Potential Opportunity/Deals. (consider buy calls/sell puts/buy shares)

• Market Greedy = Potential Over Valuation. (consider buy puts/sell calls/sell shares)

• I like to be bullish when there is extreme fear

• I like to be bearish when extreme greed.

• Opportunity is out there, just gotta find it!

• 30 year fixed mortgage rate climbed to 6.19% Today, vs 6.09% last Sunday.

• 10 year treasury bond yield climbed to 4.19% Today, vs 4.13% last Sunday.

• 2 year treasury bond yield climbed to 3.47% Today, vs 3.41% last Sunday.

• Interest rates/bond yields climbed a little this week on the back of strong economic data & dampened the need to immediately cut.

• As I always say, interest rates are gravity!

• As interest rates/bond yields DECREASE, stocks become MORE attractive because bond yields go DOWN which makes the risk free bond look LESS attractive.

What’s up everyone!
Hope you’re having a great weekend & did something productive!
Here is what we got going on right now.

Let’s Break It Down:

• Last week in the stock market we got some economic data that helped ease fears around the labor market weakening too quickly.

• We saw both initial and continued jobless claims come in at levels that suggest the labor market is still relatively stable for now.

• The issue is not where the labor market is today. The issue is what happens if layoffs start to accelerate.

• If layoffs spike, those workers may struggle to find new jobs because there are not many new job postings right now.

• That balance works in the short term, but it is fragile and it does not last forever.

• This is exactly what the Federal Reserve is watching. The Fed has two core mandates. Keep the labor market healthy and keep inflation close to 2%.

• Interest rate decisions are made based on which of those two risks they believe is more pressing.

• Right now, the Fed views labor market risk as the bigger concern, which makes them more willing to cut rates.

• I do not believe inflation is the immediate threat many people think it is.

• AI is a massive deflationary force over time, and as productivity continues to improve, inflation pressure should ease. In fact, down the road, deflation may actually become the larger risk.

• Because of this, the Fed is likely to remain focused on supporting the labor market through rate cuts.

• Lower interest rates support stock market valuations by making capital cheaper to borrow.

• They also push bond yields lower.

• When bond yields fall, investors are less incentivized to allocate capital to bonds, which shifts more money into equities. Lower yields also stimulate economic activity.

• People are more willing to buy homes, buy cars, and spend money. That liquidity injection supports overall economic growth.

• Looking ahead, we are approaching a transition to a new Fed in May. That Fed is likely to be more dovish than Jerome Powell, which creates a bullish tailwind for markets. That said, valuations are elevated right now, so caution is still warranted.

• My portfolio is currently positioned to perform well on both the upside and the downside. My upside beta is slightly higher than the Nasdaq, while my downside beta is lower. That means I am capturing more upside while taking on less downside risk. I am being patient and selective as opportunities present themselves.

• There are still opportunities to sell long duration portfolio secured puts, but it is critical to recognize that the overall market is roughly 15% overvalued. If the market were to swing to 15% undervalued, that would imply a potential 30% drawdown.

• When you have been investing long enough, you learn that unexpected events always happen, and preparation is everything.

• This is why longer duration contracts work.

• The goal is simple. Buy great companies at good prices and use options to magnify high conviction setups. That is how you win long term.

• Right now, the key drivers to watch are a gradually weakening labor market and stretched valuations. However, Q4 earnings begin next week. If earnings come in strong, the rally likely continues. I do expect Q4 earnings to be solid, but we will let the data guide us.

• As always, I will be breaking everything down in Discord in real time. We will continue to capitalize on opportunities and focus on beating the market over the long term in a low risk and sustainable way. No day trading. No swing trading. No covered calls. No cash secured puts.

• We build a strong base portfolio, sell long duration portfolio secured puts on companies trading below intrinsic value with moats, pricing power, and durable competitive advantages. Those puts are typically 1 to 2 years out. We take a portion of that premium and deploy it into call options & a portion into shares. Then we wait patiently and let the probabilities work in our favor.

• Happy 2026, the year of market volatility!

As always, I am rooting for you and want nothing but wealth & health for you & your family!

See you in next weeks newsletter!

-Brandon

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