AJB Capital

The smartest money on Wall Street is trapped.

Prime brokerage leverage just hit 322.7%, a five-year high, with long-short books in the 99th percentile, all crowded into the same tech names and dead short energy.

And with all that firepower, they still lost to the index in May, gaining 3.35% against the market's 4.55%. That is a chase, not a lead, and it is the setup for a violent rotation.

Here is the urgent part...

Protection is cheap and Friday's jobs report drops into a market with no insurance.

The line on S&P is 7,500, that tells you the selling has started.

2. Oil Is a Coiled Spring 

Wall Street agrees almost unanimously that oil inventories sit at record lows while the Strait of Hormuz stays shut, and that governments will rush to refill their reserves the moment it reopens. 

The real tell hides in the futures curve, because near-term Brent has jumped toward $98 while the longer-dated contracts still sit near $85. 

That means traders assume this whole crisis blows over quickly. 

If it does not resolve, the squeeze runs hard and fast in the other direction. 

We’re looking at Cheniere Energy (LNG)... as a major play in the growing demand for U.S. gas.

Plus, I’ll walk you through what’s happening with the MicroSectors Oil & Gas Exploration & Production 3X Leveraged ETNs (OILU), which acts as our key signal for energy movement.