While bitcoin bounced 7% and AI names reclaimed their footing Tuesday, I was studying a different kind of breakout setup: CBOE’s textbook squeeze pattern near all-time highs.

Everyone’s watching the Fed cut probabilities hit 87% and debating whether December’s seasonal strength can carry this market higher. The Nasdaq’s 0.5% bounce had traders buying the AI dip again.

But here’s what caught my attention while everyone else was chasing bitcoin’s recovery: CBOE has been quietly building one of the cleanest bullish setups I’ve seen all month. This thing’s been coiling for a breakout just 5% below its 52-week highs.

Fresh Daily Squeeze Loading Energy

When I say CBOE has a “fresh daily squeeze” forming, picture this: imagine winding up a rubber band. The tighter you twist it, the more energy builds up. When it finally snaps, the release is explosive.

That’s exactly what happens with stock volatility. When a stock moves sideways, volatility contracts like a wound-up rubber band. The longer it stays compressed, the bigger the eventual breakout.

CBOE’s daily chart shows this spring-loading effect happening right now. The Bollinger Bands are pinching together, volume is drying up, and the stock is coiling just below resistance.

Bullish Stacked EMAs Show Institutional Support

Here’s what really gets me excited about this setup: CBOE’s exponential moving averages are stacked bullish across multiple timeframes, creating a foundation of support under current prices.

Picture a stack of stairs climbing upward.

The 20-day EMA sits above the 50-day, which sits above the 100-day, which sits above the 200-day. This creates a ladder of support below current prices where the stock consistently bounces off these trend lines.

Relative Strength Tells the Success Story

CBOE is up 29.5% this year while many stocks struggle to keep pace. That’s textbook relative strength – exactly what institutions want to own when markets get choppy.

When markets get volatile like we saw Monday, the relatively strong stocks bounce first and fastest. CBOE’s been building wealth for months. Now it’s positioned for the next leg higher.

Why the Business Model Works Here

CBOE operates the Chicago Board Options Exchange – essentially the marketplace where options contracts trade. Think of them as the toll booth on the highway of options trading.

Every time traders buy puts or calls, CBOE collects transaction fees. With options volume hitting record levels this year and retail trading staying elevated, their revenue streams keep growing.

The Fed cut expectations hitting 87% doesn’t hurt either. Lower rates typically boost trading activity as investors chase yield and hedge positions more actively.

But honestly? I don’t need the fundamental story.

The chart’s been showing strength for months. Those higher highs, the consistent bounces off support, the ability to hold near all-time highs – this breakout’s been building.

Your Action Plan

With those stacked EMAs providing support and a fresh daily squeeze building pressure, any pullback should be short-lived.

This sets up for a potential play using call options targeting the $262.98 highs.

The risk is obvious – market sentiment could sour, Fed expectations could shift, and profit-taking could hit high-flyers like CBOE. That’s why position sizing matters.

But when technical strength, fundamental tailwinds, and market positioning align like this? These setups can move fast.

The spring is loaded for CBOE to break higher. Sometimes the best opportunities hide while everyone’s watching bitcoin bounce.

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