Markets are finally starting to exhale.

With the government shutdown deal making its way through Congress, Wall Street is shifting back from fear to calculation. 

The sharp uncertainty that had traders on their heels is dulling, and when policy stress lifts like we’re seeing right now, markets often respond in waves. 

First comes relief, when indexes bounce, volatility drops, and traders breathe. 

The second, more important, wave is when the market starts sorting what’s been mispriced, misunderstood, or tossed out in the panic.

Right now, we’ve got a few moving parts working in our favor. 

This is what they are and how to harness them.

Second Wins the Race

On one hand, you’ve got tech and AI names that took a beating over the past few weeks because they were crowded trades in a rattled market. 

Those names are far from dead, but the easy money is gone and now it’s time for the smart money to take over.

At the same time, you can see in the options flow that institutional desks are beginning to rotate. 

One day the volume’s in defensive names and the next it’s in speculative call-buying on high-beta tech. 

That tells me one thing: Traders are probing to see which sectors have real strength after the shutdown and which ones are going to limp along under the weight of rising yields and softening economic data.

This is when I start looking for bounce trades, or strategic, short-dated call spreads on names that got whacked too hard, too fast. 

I’m looking for asymmetric setups with defined risk and solid catalysts behind them. The goal here isn’t to catch the bottom, it’s to catch the second, smarter move. 

No Guts, No Glory

But don’t confuse this approach with, “Everything is bullish now.” 

That’s not the takeaway. 

The shutdown resolution isn’t guaranteed, and this market still has some unresolved tensions including rates, inflation stickiness, and the Fed’s next move. 

That’s why risk management is non-negotiable. 

This isn’t the time to go all in on long calls hoping for a melt-up. It’s time to scale in, stay sharp, and be ready to cut trades that don’t move fast enough.

This kind of moment is where a lot of traders mess up. They get whiplashed by the rally — like they “missed it” — and start buying blindly into names that are already extended. 

That’s emotional trading and it’s a killer. 

The better move is to focus on setups that give you a real edge. You want tight risk, strong bounce potential, and a story that still has legs post-headline.

I’ve seen this cycle too many times over the past 20 years. Markets sell first and ask questions later. 

Then the dust settles, the news gets priced in, and suddenly there’s money sitting on the table, waiting for someone with the guts to take it. 

That’s the moment we’re in now.

Recognize the Opportunity

So what do you do in this sudden shift? 

You keep your head clear, because setups matter more than stories. 

Let the charts show you where the buyers are stepping in again. 

Look for those snapback patterns on names that held key levels, especially if they’ve already flushed weak hands. 

If you’re trading options, structure your trades with exits in mind. Don’t overpay for premium. 

And keep some powder dry.

This market’s giving you a second chance. Don’t let the noise drown out the opportunity.

Stay street smart,
Jeff Zananiri