Founder’s Note: JC Parets here. It’s been a while since we heard from Sam Gatlin officially.
His name might not be in the byline all the time, but Sam is a big part of everything we do at TrendLabs.
Last time, he introduced us to the “Apple of China.” This time, Sam provides some clarity about the power of trends.
By Sam Gatlin
I just got back from a trip to the Pacific Northwest, visiting Seattle and Portland and exploring the surreal landscapes in the area.
Delta (DAL) took me out, Southwest (LUV) brought me home. And despite a two-hour delay in Las Vegas, I still think airplanes are one of humanity’s most outstanding achievements.
Seriously – I can walk into a metal tube in Kansas, sit down, and a few hours later step out into an entirely different part of the country. All while flying 500 miles an hour, 36,000 feet in the air.
That’s incredible!
It’s a reminder of how amazing humans can be when we work together to solve complex and challenging problems.
But that doesn’t make airlines great businesses.
The JETS Setup
The U.S. Global Jets ETF (JETS) holds the big four carriers – United (UAL) at 11.6%, DAL at 11.3%, American (AAL) at 10.7%, and LUV at 9.4%.
Then there’s a steep drop-off – SkyWest (SKYW) is the next-largest holding at just 3.2%.
Here’s what’s fascinating…
Short interest in JETS is at an all-time high, just as price is coiling beneath the prior cycle peak from 2021:
Price has been absorbing all of that overhead supply from the prior cycle for all of 2025.
A breakout above $27 would force all that short interest to unwind, sparking what we call a Thematic Squeeze and vertical moves across the industry.
I’m not saying airlines are suddenly great businesses… I’m saying positioning is completely offside.
We’re watching JETS closely for trading opportunities at The Divergence.
From Flying to Betting
My delay happened in Las Vegas – my hell on earth. The place reeks of cigarette smoke, and the airport is lined with slot machines.
They even have closed-off rooms so people can puff away while they pull the lever.
Watching it made me realize betting might be a nasty habit, but it’s a great business.
The Roundhill Sports Betting & iGaming ETF (BETZ) is proof:
And its top holdings– Flutter Entertainment (FLUT), Lottomatica (LOTMY), DraftKings (DKNG), Entain (GMVHY), and Super Group (SGHC) – are booming.
Buyers are regaining control of the primary trend here, reclaiming the volume-weighted average price, or VWAP, anchored to the all-time high.
That’s a significant shift in leadership.
And it’s happening even if I can’t stand the products they’re selling.
Here’s the Common Thread
Whether it’s airlines or sportsbooks, my opinion of the business doesn’t matter.
What matters is the trend. And in both cases the trend is turning up.
Next month I’ll be putting these “flying tubes” to the test again – Kansas to Toronto for some of the best Asian cuisine JC swears I’ll ever have, then on to Greece to kick off my new digital nomad journey.
Because if humans can build machines that can carry me halfway around the world in a day… I’m going to take full advantage.
And if the market is building a setup that can carry prices higher in a hurry… I’m going to take full advantage of that, too.
Everybody’s wrong when they let personal bias override what price is telling them.
Airlines can be terrible businesses, but the stocks can rise if short sellers are trapped.
Sports betting can be morally questionable and still trend higher if there are more buyers than sellers.
Stay sharp,
Sam Gatlin
Analyst, TrendLabs