Methodology
The secret sauce — published openly because transparency builds trust.
This is exactly how we generate signals. No black box. No course to sell.
The Core Philosophy
Most retail traders fail because they treat the market as either pure numbers or pure news. The edge is in combining both — and knowing which one to check first.
Macro environment → Sector sentiment → Individual stock signal
(water) (current) (the fish)
No point analyzing a perfect stock setup
if the macro is about to tank everything.
Step 1 — Check the Macro First (SPY/SPX)
Before looking at any individual stock, check whether the market environment is safe to trade in.
SPY = ETF = retail money moves it = faster reaction = noisier SPX = index = institutional money = slower but heavier = more meaningful SPY drops, SPX not confirmed → retail panic, possible noise, fade opportunity SPX confirms the drop → institutional selling, respect it, stay out Same story appearing in both → highest weight signal, do not fight it
Your stock not moving as expected? → Check SPY first (is it the whole market?) → Check SPX next (are institutions confirming?) → Both down = market problem, not your stock — thesis may still be intact → SPY/SPX fine = something wrong with your thesis — reassess
Step 2 — Macro Trigger Words
Headlines on SPY/SPX that move the entire market before individual stocks react.
| Trigger | Market Reaction | Hidden Opportunity |
|---|---|---|
| Fed / FOMC / Powell | Pause before briefing, direction after | Wait — no trade until after statement |
| CPI / Inflation / PCE | Immediate broad dip | Oversold bounce play 2-3 days later |
| Interest rate hike | Dip — especially tech and growth | REITS, utilities hit hardest |
| Interest rate cut | Run — especially REITS and growth | Rotate into rate-sensitive sectors |
| War / Invasion / Sanctions | Broad market dip | LMT, RTX, NOC, GD, POWW go UP |
| China / Beijing / Tariff / Taiwan | Tanks broad market | Domestic manufacturers go UP (reshoring) |
| Dollar strength / DXY | Emerging markets and commodities dip | Domestic-only companies less affected |
The Thursday Fed pattern:
FOMC meeting dates are published a year in advance. The market pauses Wednesday-Thursday before the briefing. No trade entry during the pause. After the statement: hawkish language = dip, dovish language = run. This is free alpha from a calendar lookup.
FOMC meeting dates are published a year in advance. The market pauses Wednesday-Thursday before the briefing. No trade entry during the pause. After the statement: hawkish language = dip, dovish language = run. This is free alpha from a calendar lookup.
Step 3 — Individual Stock Signals
Bullish Trigger Words CALL
beat expectations raised guidance new contract FDA approval partnership announced share buyback dividend increase record revenue expanding into strategic acquisition
Bearish Trigger Words PUT
missed expectations lowered guidance investigation recall CEO resigned SEC inquiry delayed launch restructuring layoffs debt downgrade
Context Dependent
acquisition → are they buying or being bought? partnership → with who? bigger or smaller company? restructuring → cutting fat (good) or bleeding out (bad)? beat revenue / missed earnings → which matters more for THIS stock?
Step 4 — Signal Scoring System
SEC EDGAR filing highest weight (legal, factual)
Earnings call transcript high weight (direct from company)
Reuters / Bloomberg medium-high (institutional attention)
Yahoo Finance / Google News medium (retail attention)
Social sentiment low weight alone
BUT high weight if it CONTRADICTS others
— divergence itself is a signal
Score > threshold → CALL signal
Score < -threshold → PUT signal
Score in middle → NO TRADE ← this signal is underrated
Step 5 — Smart Money vs Dumb Money
Unusual options volume BEFORE a known catalyst = someone knows something = legitimate signal, visible to everyone, public data WSB peak hype on a ticker = smart money is typically already exiting = the GME squeeze worked once because the math was real = most of the time peak hype = someone needs you to buy their bags Smart money (unusual options volume) + technicals agree AND retail sentiment is on the opposite side = highest confidence signal
"Buy the rumor, sell the news":
Stock up 15%+ in 2 weeks BEFORE earnings → post-earnings drop is more likely regardless of actual numbers. The people who bought the rumor are now selling to you.
Stock up 15%+ in 2 weeks BEFORE earnings → post-earnings drop is more likely regardless of actual numbers. The people who bought the rumor are now selling to you.
Step 6 — Price Position (Technical Layer)
RSI < 30 → oversold, potential bounce RSI > 70 → overbought, potential pullback RSI < 40 + price near 52-week low + known catalyst → strong CALL setup RSI > 65 + price near 52-week high + no catalyst → strong PUT setup
The key question most retail traders miss: is the bad news already priced in? A stock down 30% on a bad quarter with a product launch in 60 days = the setup most people are too scared to take.
Step 7 — Implied Volatility Check
High IV before a known catalyst → market is already pricing in a big move → options premium is expensive → you can be right on direction and still lose money Low IV + known catalyst approaching → cheap premium, market hasn't priced in the move yet → this is the sweet spot IV crush after earnings = one of the most common ways retail traders lose money on correct directional calls. Always check IV before buying.
The Trading Timeframe
Entry: 3:55 PM PST — automated, buy into the close News scan: 6:25 AM PST — Yahoo Finance, held tickers + SPY + SPX Exit: 6:31 AM PST — automated Bearish keywords confirm thesis → hold 2 min → sell at 6:32 AM No confirmation → sell at open (6:30 AM first clean candle) 2-minute hold is a hard stop → THETA on 0DTE is violent past that
Why 2 minutes exactly:
The first 2 minutes after open are the most volatile and carry the most theta. Holding past that on a 0DTE contract means theta is actively burning your premium. The overnight uncertainty premium resolves at open — that is your profit window.
The first 2 minutes after open are the most volatile and carry the most theta. Holding past that on a 0DTE contract means theta is actively burning your premium. The overnight uncertainty premium resolves at open — that is your profit window.
Signal Quality Filters
Minimum price: $10.00 → ATM options on sub-$10 stocks exceed $100 budget → Bid/ask spreads untradeable below this threshold → Market cap rejected as alternative — penalizes emerging companies Minimum volume: 500,000 shares/day (2-day average) → Options open interest is downstream of stock volume → Below 500K = wide spreads, can't get fair fill on $100 contract Expiration max: 7 days → Quarterly contracts: ATM premium exceeds $100 budget → Theta burn makes overnight hold inefficient → yfinance 1-min candle history only available for 7 days
The 15-Year Watchlist Principle
No algorithm replaces knowing which stocks are "well behaved" — meaning they consistently follow these patterns vs ones that are erratic.
A well-behaved stock: Reacts predictably to its sector's macro triggers Has consistent IV behavior around earnings Doesn't gap randomly on low volume Has enough options liquidity to get a fair fill
What We Publish That Nobody Else Does
1. Full signal methodology — open source, no black box 2. Trigger word list with historical price reactions 3. Unusual options volume as insider activity proxy 4. The NO TRADE signal — when to sit out 5. Pairs trades hidden inside every macro trigger 6. IV check before every paper trade — shown explicitly 7. Running paper trade record — fully transparent wins and losses 8. Black-Scholes FOMO calculator — what you left on the table 9. Theta burn by DTE — Thursday vs Monday entry comparison 10. Keyword accuracy rate — turns opinion into evidence over time