Wealthpop

– ETF Watchlist –
For those who are closely watching this market in case of a turn around or at the very least a pull back, we are getting close to the area where that has a higher probability of taking place. For example, the next big level to watch on the S&P 500 is 4300 and we just came up to that level before rejecting down, 4299.28 to be exact.
This zone has a lot of resistance overhead, which is something traders will want to look out for. While this doesn’t suggest the market will make a U-turn here, it does suggest that there will be more and more resistance ahead.
To find these levels and zones of resistance, we must first look back on history for when prices were in this area before. We can use history to show us where the pockets of supply and demand might be and then map out those zones in the process.
SPDR Gold Shares (GLD)
One trade idea we are on the look out to execute on is gold. With gold approaching that 2000 mark once again, we would like to see it overtake that level before establishing any long plays on it. With all the attention gold is attracting once again, we want to be mindful of the rise in price that purchasing could spur. Central banks and countries around the world have once again taken to stockpiling the shiny metal.
Whatever the reason, it isn’t much concern to us, but the fact that this buying is taking place is what we want to pay attention to. The big boys aren’t the only ones buying gold either. Even retail investors are adding gold to their portfolios in order to prepare for whatever economic turmoil may be heading this way.
Another positive development for those investing in gold, the recent meltdown of the crypto market following the SEC suing crypto companies Binance and Coinbase. Again, whether this is good or bad for crypto is not really a cause for concern, however, this event may push more people into the safe haven gold has traditionally been.
So, again, keep an eye on gold taking that 2000 level for another push higher.
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Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today and as always…
Good Luck With Your Trading!
Christian Tharp, CMT

– ETF Watchlist –
It is not out of the realm of possibility that we get a pull back soon. If we just look at SPY, we are just starting to break into another supply zone, a zone where big sell order were sitting in the past and unfilled sell orders could still be lying in wait.
This gives us a suspicion that soon could be a good time to look for put plays. Now, we could go the old fashioned route an find some levels to swing puts on ETFs like SPY and QQQ, but we can also buy equity on some bearish leveraged ETFs for a little more of a safer play, or buy calls on one of those ETFs. Let’s look at an example for when the time of a pullback comes.
ProShares UltraPro Short QQQ (SQQQ)
SQQQ is a great example of one of the leveraged ETFs we can look to in preparation for a pull back, which are always bound to happen at one point or another, the only question really becomes the severity and length of the pull back. Every hot market needs to blow off some steam. For more conservative types, going long equity on SQQQ can be a bit of a more relaxed way to get ahead of a little downside movement.
However, those looking for a more aggressive approach can buy call options on the ETF. That may sound counterintuitive, but since the ETFs price goes up if the market goes down, then you would want to go long this ETF, which means you’re really going short the market.
Of course, you can certainly go the old fashioned route and short SPY or QQQ, but we would be remiss if we didn’t at least give you some different options here. See what works for you and execute!
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Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today and as always…
Good Luck With Your Trading!
Christian Tharp, CMT

Ask any old trader whose enjoyed any level of success, what’s the secret to their longevity and it will most likely be some variation of the ‘R’ word… Risk.
You can employ any combination of strategies and methodologies, but without them being joined at the hip, neigh ruled, by a strict set of risk management tools, failure is already a forgone conclusion.
One of the easiest ways to do that is to use the “R” method, which was developed by Brian Lund.
For Lund, “r” represents a fixed dollar amount, which represents both the risk and reward you’re willing to accept on each trade. This will properly allocate individual position size within your overall trading account, as well as how much of that trade your risking, or willing to lose.
It is best arrived at by using a percentage of your total trading capital. It allows you to size your position in relation to your risk level instead of in an arbitrary way.
For example, if you have $50,000 available in trading capital (cash not including margin), you might use one-quarter of one percent (.0025), or $125, as your “R” factor. Take that one step further, the total amount you are willing to risk per trade, such as 20% loss on that trade where you are using that $125. This means you are ultimately risking $25, just as an example of how risk management should work.
In the highly technical example below, (A) is a former support level that failed and now is a potential resistance level.
Price is trapped between (B) and (C) level, and you are looking to go long if it breaks back above (B).
You know that a reasonable stop-loss would be just below level (C), so you determine the price distance between your entry just above (B) and your stop just below (C).
Let’s say that this distance is 50 cents. You now take that distance and divide it by your “R” factor, which gives you a position size of 250 shares ($125 / .50 = 250).

You now know that if your trade fails and hits your stop-loss, the most you can lose is $125. The goal then becomes to only take trades where you have the best potential reward for the risk you’re putting up, ideally 1:3 (risk to reward).
In this same example, the resistance level of (A) is a reasonable target for a successful trade, so you determine the distance between your entry just above (B), to the target of (A). You then divide this number by your “R” factor to see if the trade is worth taking.
If the distance between (A) and (B) is $1.50 then you have a 1:3 risk/reward ratio and the trade is a good bet ($1.50 / .50 = 3).
The higher the risk/reward ratio you have on your trades, the fewer times you have to be right and still make money. One South African firm only won 30% of their trades, but was still wildly profitable, due to proper risk management.
As you can see, if you only take trades that have a 1:3 risk/reward ratio, you only need to be correct 50% of the time to have a 10R profit after ten trades.
Knowing how to use risk/return and position sizing allows you to make sure you are never overextended on a trade and ensures that you’ll always be able to return to fight another day.
Risk management is just one of the various trading topics I go over routinely with my students in the Options 360 trading community.
If you’ve been looking for world-class trading education, check out this short presentation to learn more about my trading methods and how joining the Options 360 community can help take you trading to the next level!

Today’s stock, Hilton Worldwide Holdings Inc. (HLT) is a great example of finding a stock that has relative weakness in a strong market. This is almost always a clear sign of a possible short play.
As you can see in the video, while the market has pressed higher and higher over these past several weeks, HLT has remained somewhat weak and in the best case, has just kind of consolidated. You may see higher highs on the chart as well, so this could lend some credence to the fact that the trend is still moving upward. However, this 135-140 area is worth a watch.
Any failure to hold this area should imply lower prices, at the very least, in the short term. Investors could use this area to gauge whether or not a larger sell off is in play. Now, to make things a bit more interesting, you’d want to see what this stock does compared to the overall market.
A relatively weak stock is highly susceptible to a reversal in the market. More importantly, is to see what this stock does if the rally continues. If the divergence continues, I would keep this stock on your watchlist for a possible short play.
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Learn to find these levels for yourself when you join The Profit Machine. There, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.

Get a jump start on your options education and put yourself in position to win in 2023. Sign up today! Until then…
Good Luck With Your Trading!
Christian Tharp, CMT

On Wednesday, Nvidia (NVDA) shares surged an eye-popping 30%, adding over $200 billion to the company’s market cap and sending the stock to a new all-time high.
The source behind the strength? Incredible demand for the company’s new chips, which are expected to be the backbone for running many Artificial Intelligence (AI) systems that are in development.
It’s not just NVDA riding the AI wave, the biggest stock gains this year have come from companies that will either be supplying the tech to build AI infrastructure or businesses that will benefit from integrating AI features, such as Large Language Models (LLM). By some measures nearly all of the Nasdaq’s 100 (QQQ) 22% year-do-date gains have been fueled by AI related stocks such as Microsoft (MSFT) and Alphabet (GOOGL).
So, it might be surprising to find an AI ETF, like AI Powered Equity ETF (AIEQ), that not only didn’t participate in the rally on Thursday, but is actually down some 5% for the year to date!

This is just another reminder of the importance of doing research and making sure you know what you own. Magnifi is here to help.
Why has AIEQ fared so poorly despite seemingly being positioned dead center in the hottest investing trend in the market?
Well, the irony is, despite its name AIEQ doesn’t not invest in AI-related companies at all! What AIEQ does is use AI to pick stocks.
AIEQ owns no NVDA, Apple (AAPL), Microsoft (MSFT), or any number of the “in play” AI stocks. Rather, of its some 150 stocks in the fund’s holdings, its heaviest concentration of holdings, with a 31% weighting, are in the consumer discretionary sector. Names such as Wingstop (WING), William Sonoma (WSM) and Ollie’s Bargain Basement (OLLI) are among the fund’s top holdings.
Due to the name and similarity to other ticker symbols, some investors might have mistaken AIQE for the Global X Artificial Intelligence & Technology ETF (AIQ), which does count AAPL, NVDA, MSFT, GOOGL among other true AI-related names as its top holdings. AIQ is up a solid 21% for the year to date. 
Launched in 2017 AIEQ is among the oldest of the artificial intelligence-powered ETFs, yet it only has a mere $105 million assets under management and the recent performance probably won’t help generate new inflows anytime soon.
“It is ironic that an AI-powered algorithm has not capitalized on the rally in big tech stocks that’s been driven by its own disruptive technology,” said Jessica Rabe, co-founder of DataTrek Research.
“AIEQ has previously tended to work best when it could catch momentum driven tech names in broad-based market rallies like during the pandemic crisis, but it’s clearly failed to do that this year,” she added.
Aside from not owning the best performing names, AIEQ’s best performance tends to come during bull markets when the models latch onto momentum trades, according to DataTrek’s Rabe. Given that the stocks are only recently coming out of an 18-month long bear market, and doing so in a herky, jerky fashion it’s somewhat understandable that AIEQ’s performance has been lackluster. Still, it has to come as a major disappointment that AEIQ’s algorithmic process stumbled so badly in not identifying the AI craze and failed to join the bandwagon, which started rolling over three months ago.
All this is to say, be aware, or even wary, of what are sure to be a slew of new ETFs offerings that will employ artificial intelligence to build and actively manage portfolios.
For example, just last week Roundhill Investments launched the Generative AI & Technology ETF (CHAT). According to Roundhill, CHAT will invest in companies advancing generative AI with the twist of applying the new technology to its own stock selection within the AI universe.
CHAT is off to a good start with its top holding being those usual suspects such as NVDA, MSFT etc. helping it to gain 4.1% since its launch on May 18th.
Time will tell how these AI-powered funds do over the long haul, but as Rabe of DataTrek says, “We find AIEQ is an interesting case study for asset allocators and stock pickers because its investment process differs from traditional approaches. But, as with some of what we are all learning from ChatGPT, different doesn’t always mean better.”
Let’s get a side-by-side view of the AIEQ and AIQ ETFs and let their metrics help you decide which is a better fit for your portfolio.

To further your research these funds and other ETFs, as well as other funds that can help power your portfolio, be sure to get access to Magnifi.
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The market seems to be showing some signs of wanting to pullback a bit after the run up over the past week or so. For the S&P 500, after surmounting that 4200 on last week and again on Monday of this week, it quickly retreated back below that level.
While this may not mean the end of the rally, it could be a signal of the market getting ready to blow off a little bit of that steam. A pullback here would likely bring back 4150 back into play as a point of support for the S&P.
From an individual stock standpoint, the big tech names have begun this selloff. Google (GOOGL), Microsoft (MSFT), and Nvidia (NVDA) have all started Tuesday’s session in the red, retreating back to support levels. Only time will tell if they can recover in the coming days to resume the rally. Tesla (TSLA), however, has not followed this path a continues to push higher this week.
As far as ETFs go, there since much of these moves have been led by the big names, there hasn’t been much participation by the ret of the stocks in these indexes and ETFs. When there is some broader participation from stocks that aren’t as heavily weighted in these ETFs the rally should begin once again.
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Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today and as always…
Good Luck With Your Trading!
Christian Tharp, CMT

Last week, the market was finally able to break out of the restraints of the range it had been bounded to with the first meaningful move in quite sometime. Led by mostly big tech stocks to begin with as evidenced by an almost parabolic surge in the Nasdaq (NDX), many other sectors are beginning to follow their lead. This surge has also led to a fair amount of FOMO by investors and traders who doubted the initial validity of the rally, lending more momentum to the move.
As for the S&P 500 (SPX), the coveted 4200 mark has been surmounted, signaling to many market participants that this rally is very much underway. Even with the inevitable pullback that often follows such a move higher, this level should remain a strong support level.
With debt ceiling talks continuing, much of this rally has taken place in anticipation of a deal being reached, however, the hopes of one being reached by the end of last week quickly fizzled out. Now, the chances of a deal being reached before default have seemingly gone down the drain with neither side looking to budge on their proposed demands.
This will indeed continue to have a fair amount of influence on where the market goes next, whether it pushes higher on a “buy the rumor” scenario or if the default will finally be what knocks the market off its trajectory.
In the meantime, keep an eye on the key levels I highlight below in order to map out the market’s next possible move.
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Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today!
Good Luck With Your Trading!
Christian Tharp, CMT

When it comes to the debt ceiling, there’s a good deal of negativity. However, we are seeing some breaks in the clouds. For example, House Speaker Kevin McCarthy says he doesn’t think the U.S. will default on its debt.
“I think at the end of the day we do not have a debt default,” McCarthy told CNBC.
Also, as noted by NBC News:
“Leaving the meeting, congressional leaders hinted at some progress. McCarthy, (R)-Calif., said that the sides remain ‘far apart’ but that ‘it is possible to get a deal by the end of the week.’”
If a deal is put in place later this week, markets could see an explosive relief rally.
So, what’s the best way to prepare for this possibility? One way is to pick up index ETFs, such as SPDR Dow Jones Industrial Average ETF Trust (DIA). Last trading at around $330, it wouldn’t be all that shocking to see the DIA ETF recover to $342.50 on a recovery rally.

The DIA ETF tries to provide results that mirror the performance of the Dow Jones Industrial Average. Some of its top holdings include Goldman Sachs (GS), Microsoft (MSFT), McDonald’s (MCD), and several more giant companies from various sectors and industries. In short, the DIA ETF allows you to trade alongside the DJIA and gain exposure to some of the most solid stocks in the market.
Next we have the tech-heavy Invesco QQQ Trust Series 1 ETF (QQQ), which was last trading just north of $330, and with an expense ratio of 0.2%, it’s not all that expensive to add to your long-term portfolio. The ETF is made up of 100 holdings with the focus of tracking the NASDAQ-100 Index.
This means some of its top positions include stocks like Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), NVIDIA (NVDA), Meta (META), Alphabet (GOOGL), and Tesla (TSLA) all stocks that have been leading the charge during this market rally.

The final fund we want to examine when trying to find a way to cast a wide net and hitch a ride to what could end up being the next leg of this bull market, the popular SPDR S&P 500 ETF Trust (SPY), whichprovides investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500. Some of its top holdings mirror much of the Q’s ETF. Stocks like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), Alphabet (GOOGL), and Tesla (TSLA).

All three of these ETFs could potentially rally higher on a conclusion of the debt ceiling chaos and seeing to it that your portfolio balance surges with it.
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Last week, Options360 established a bullish option position in SPDR Biotech ETF (XBI), based on both fundamental and technical reasons.
However, yesterday there was a ruling by the Federal Trade Commission that has cast a cloud over the sector causing me to re-think whether to maintain the position. I thought it might be helpful to share my process for not just initiating the trade, but also how I evaluate and manage the position through changes in time, price, and profit potential.
I have a feeling my final decision on whether to stick with the trade will be of the order of the old John Maynard Keynes quote, “When the facts change, I change my mind.”
First, let me share my reasoning for establishing the bullish position; here is part of the alert sent to Options360 members on May 9, when XBI was trading $84 per share.
“XBI is near equal weight (largest holding is just 1.3%) of small cap biotech companies. Most are not profitable but many have promising pipelines.
These firms (and biotech/healthcare) are fairly recession proof.
The larger pharma companies are always looking for acquisitions and usually willing to pay big premiums to fill their own often aging/coming off patent pipeline. And there has been a noticeable pick up in deals over the past few months.
Chartwise it has been in a decent uptrend and recently cleared resistance above $84. If this nascent bull flag can create a push above $86 and think a target of $90 looks possible.
I will use $83.25 as stop loss level.”
The chart below shows the $83-84 support level and the formation of a potential bull flag.

The recommended trade was to buy a July 86 call. On Monday, the stock rallied above $88 and we sold a short-term 91 call to leg into a diagonal at an advantageous price. Things looked good.
Let me backup, before I get to today’s dilemma.
One of the many attractions of Exchange-Traded Funds (ETFs) is their reduction of single stock risk; if one company has bad news or fails to execute its shortcomings, the decline won’t sink your entire position.
This makes using a sector ETF, especially for industries in which there can be a wide variety of outcomes, such as the biotech industry, a wise move in terms of risk management. Let’s face it, unless you’re an expert in the field, it is nearly impossible to keep up with all the research, progress, and potential applications for the drugs and treatments in development.
Using an ETF, which holds a basket of biotech stocks, some of which will fail and some that will achieve great success, is a time and financially efficient way to gain exposure for the sector.
So, much to my chagrin, XBI gapped down by some 3% on Tuesday in the wake of the FTC’s block of a proposed $28 billion acquisition of Horizon Therapeutics (HZNP) by Amgen (AMGN), causing shares of HZNP to plunge 23%.
This was a deal that was not supposed to have any trouble being approved. There was no overlap that would create less competition, and yet, it was blocked.
The drug/biotech industry is built on a model of small, often university and government-funded projects doing the initial research, hoping to develop a drug that can move towards Phase I testing.
If it passes muster then big pharma starts sniffing around to pick up the mantle, both financially and operationally, to get to Phase II and III, and ultimately, distribution.
This decision by the FTC (let’s face it, it’s an anti-business administration with an acute sense of the real need to reign in drug and healthcare costs) might have the unintended consequence of stifling innovation and development of medical breakthroughs if there is no path to continued financing, distribution, and profits.
If the regulatory environment changes in that acquisitions will be blocked the complexion of the whole industry changes.
Bringing us back to the trade. XBI dipped to $83.65, just above my stop loss trigger, before bouncing back above $85.
This morning I took another roll to collect premium and bring cost basis/risk down. This flexibility of options allows us to make adjustments to a more nuanced position. I’m staying with a more moderate bullish position and will be sticking with my stop to manage risk.
If you find yourself interested in learning more about me and my method of teaching even the most novice traders how to trade options, check out this presentation I put together to get filled in this link will take you directly to my Options360 presentation.
If you’re interested in joining Options360 and get in on all the action, you can follow this link to get signed up today!

The market seems to be on the move higher after a strong move on Wednesday that was really lead by the tech sector. Names like Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), and our stock that is in focus today, Google (GOOGL). This rally looks to have some legs that could keep running.
However, one thing I think is important to draw attention to is the fact that this whole debt ceiling debate could be a perfect example of a “buy the rumor, sell the news” type scenario. If that is the case, that could be the perfect excuse for the market to deal a pullback, the significance of which is hard to predict.
This also come in to play when looking at the trade we have in front of us today. When we look at the chart on GOOGL we see one major level that is drawing closer and closer the higher the stock pushes. That level is the breakdown level at 125, which triggered a massive selloff last April. If that level acts in accordance with the idea that old support turns into new resistance, a decently high probability trade setup could be brewing.
It would be a pretty aggressive play, however, this could be a pretty good area to look for puts. In addition to being a major level according to the past performance of the stock, you can see by looking at my MACD, as well as RSI indicators in the video below, the stock is currently extremely overbought. These are further confirmations a pullback could be imminent.
After GOOGL’s massive run over the past several weeks, make sure to keep a close eye on this stock. Even if the stock’s rally was to continue, there are some indicators that could lend some credence to this area being ripe for a pullback.
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Learn to find these levels for yourself when you join The Profit Machine. There, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.

Get a jump start on your options education and put yourself in position to win in 2023. Sign up today! Until then…
Good Luck With Your Trading!
Christian Tharp, CMT