The Entry Protocol (Commons vs. LEAPS vs. The Wheel) + Watchlist This Week

Why we are fading the Venezuela noise, how to stop catching falling knives, and the 4 tickers triggering "Seller Exhaustion" signals right now.

First up—as you know, the news out of Venezuela is significant. The U.S. military operation to capture Maduro and assert control over PDVSA assets has injected a fresh “Risk Premium” into the energy markets.

While the long-term thesis is a supply glut (eventually stabilizing prices), the short-term reality is chaos. Oil is likely to gap up on uncertainty regarding the transition and security of the Orinoco Belt.

The Protocol: We will sit on our hands for the first 24-48 hours of trading. Let the algorithms fight over the headlines; we will trade the reactions.

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🟢 The Scoreboard: Validating the Indicator

Before we get to the new targets, let’s look at the scoreboard. The CSPIndicator has been printing money while the street chases headlines.

• $BABA (Alibaba): ✅ Win. We entered Commons when the indicator flashed green on the daily. The trend reversal is confirmed. (Alerted on Twitter).

  

  Fig 1: The entry signal on $BABA. We entered commons here; the trend reversal is now confirmed.

• $MMM (3M): ✅ Win. Entry signal triggered, we bought Commons. The industrial rotation is favoring us.

  

  Fig 2: $MMM caught the industrial rotation perfectly. Note the cluster of signals before the move.

• $MP (MP Materials): 🚀 Up 9% since our entry signal. The rare earth trade is front-running the supply chain fears.

  

  Fig 3: $MP is up 9% since the signal. Front-running the supply chain fear.

• $WYNN (Wynn Resorts): ✅ Win. A textbook bounce from our entry zone

• $LMND (Lemonade): 💰 Premium Captured. We sold a Cash Secured Put (CSP) last week. Volatility crushed, we kept the income.

  

  Fig 4: $LMND was a volatility play. We sold the put, the stock stabilized, and we kept the premium.

Now, the tool is lighting up again. $PLTR, $CSCO, IBM 0.00%↑ , and $CRSP are flashing ‘Entry Signals’, meaning sellers are finally exhausted.

The Entry Matrix: Choosing Your Weapon

But here is where the amateur fails: They see a buy signal and default to buying shares. Wrong. The instrument must match the volatility environment.

Here is the logic I use on when to deploy Commons, LEAPS, or CSPs for this week’s watchlist.

We do not just buy stocks. We rent risk, we lease upside, or we acquire equity, depending on the math.

1. Cash Secured Puts (CSPs)

• The Setup: High Implied Volatility (IV), Bearish-to-Neutral short-term sentiment, “Falling Knife” chart.

• The Logic: When a stock like $PLTR or $CRSP sells off aggressively, fear spikes. Premiums become expensive. We don’t want to buy shares today and watch them drop another 5%.

• The Play: We sell an Out-of-the-Money (OTM) Put at the support level shown on our charts.

• The Math: If the stock keeps dropping to our strike, we get assigned shares at a massive discount (Cost Basis = Strike - Premium). If it bounces (like $WYNN did), we keep the cash instantly.

2. LEAPS (Long-Term Equity Anticipation Securities)

• The Setup: Low Implied Volatility (Boring), High Conviction Bullishness, Capital Efficiency needed.

• The Logic: You love the chart, but you don’t want to tie up $20,000. You buy a Deep-In-The-Money (ITM) Call (0.80 Delta) expiring in 12+ months.

• The Play: Perfect for a name like $IBM. It moves slowly.

• The Trap: Never buy LEAPS on high volatility (like $PLTR right now). When the fear subsides, the value of your option drops even if the stock price stays the same (IV Crush).

3. Commons (”The Pure Play”)

• The Setup: Dividend Capture, Low Volatility, or “Forever Hold” / Unsure on timeline.

• The Logic: Sometimes leverage isn’t worth the cost. If a stock pays a healthy dividend and has low volatility, option premiums (CSPs) are too cheap to be worth the risk, and LEAPS carry too much time-decay drag.

• The Play: $CSCO. It’s a boring, dividend-paying tank. Just buy the shares when the indicator flashes green to lock in the yield.

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The Watchlist for the Week

Here is the execution plan for the new signals based on the charts you provided.

$PLTR (Palantir Technologies)

• Signal: Seller Exhaustion after a pullback.

• The Instrument: Cash Secured Puts (Weekly/Monthly).

• Lab Logic: Retail sentiment on Palantir is emotional. The sell-off spikes premiums. Do not buy Commons yet; let the premium pay you to wait for the absolute bottom. Target the support zones identified by the indicator.

  

  Fig 5: The New Signal. $PLTR is flashing exhaustion after the pullback. High IV makes this a prime candidate for Cash Secured Puts

$CRSP (CRISPR Therapeutics)

• Signal: Oversold bounce underway

• The Instrument: Aggressive CSPs.

• Lab Logic: Biotech is high beta. Buying LEAPS here is dangerous due to IV crush risk. Sell Puts at the “panic” levels below the current price. If you get assigned, you own a high-growth asset at a 2024 price level.

  

  Fig 6: $CRSP is in "Panic Territory." We sell puts here to catch the knife with a safety net.

$CSCO (Cisco Systems)

• Signal: Stabilization at support.

• The Instrument: Commons.

• Lab Logic: The premiums on Cisco puts are likely negligible. The stock doesn’t move fast enough to justify LEAPS. Buy the Commons, collect the dividend, and wait for the rotation back into legacy tech.

  

  Fig 8: $CSCO is boring, and that's the point. Buy Commons here for the dividend yield and safety trade.

$IBM (IBM)

• Signal: Trend continuation potential.

• The Instrument: LEAPS (Stock Replacement).

• Lab Logic: IBM is currently flashing a setup where capital efficiency matters. If IV is low (check the percentile), a Jan 2027 Deep ITM Call gives you the exposure of 100 shares for a fraction of the cost, freeing up capital for more CSPs on volatile names like $MP.

  

  Fig 9: $IBM is setting up for a Stock Replacement play. Low volatility favors LEAPS over Commons.

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⚠️ Next Step for You

As always, Ill be alerting my entries here on substack. If you want enter at your own pace, make sure you check the Implied Volatility Percentile (IV Rank) on $IBM and $PLTR specifically.

1. If $PLTR IV Rank > 50%: Sell Puts.

2. If $IBM IV Rank < 30%: Buy LEAPS.

The Venezuela situation will create noise tomorrow morning. Ignore the noise. Trust the exhaustion signals.