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– ETF Watchlist –
As of this morning, after a key piece of inflation data dropped, the markets seemed to have resumed their move higher with the usual suspects leading the charge. However, even though tech is leading the way, we want to analyze a trade for a sector or industry that appears ready to follow closely behind.
It is an industry that has been battered ever since the banking crisis from earlier in the year. This drastic drop in prices has opened the door for investors to pile back in with alacrity. That industry is the regional banking area of the market. Let’s take a look.
SPDR S&P Regional Banking ETF (KRE)
Although we admittedly won’t be doing much with this ETF until we get closer to 45, getting prepared for that move now can help you better execute on your plan when the time comes. Over the past three months, the ETF’s price has remained pretty congested around current levels, but if the stock can break through its resistance around 45, then the stock could be primed for a move higher.
A break of this level could come with a retest as investors try to figure out if this is the correct price or not. For traders, this could be a good point of entry, but notice, we aren’t trading on expectations of what we think is going to happen, we are simply making contingency plans should this price come back into play.
While we acknowledge this price is a long way off from where price trades at the time of this writing, near 41.50, if this market has shown us anything, it’s the ability to get to higher prices in a hurry. The market is still being led by the tech sector, but a rising tide may be enough to lift even financial boats. Be sure to mark 45 on your charts as a level we expect price to have a reaction, up or down.
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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

One of the most traded stocks in the market due to it’s ability to make massive moves in short order, Nvidia (NVDA), has made it on our radar for today’s trade idea. NVDA has been on quite the impressive run as of recently, climbing over $200 in just a month or two. However, it also hit a snag this week with some news dropping that was less than favorable for the stock in the short term.
On Tuesday, the United States announced it’s considering new restrictions that would limit exports of AI chips to Chinese firms, like the chips NVDA produces and is projected to sell billions worth. This may not be the death blow to the chip maker, however, it has provided a bit of a speed bump to a stock that was racing higher on the back of the AI hype train.
However, for market participants, this is exactly the kind of catalyst you like to see because it adds more volatility to an already volatile stock. For traders, this means price movement, whether it’s to the upside or the downside. The beauty of trading is we can make money either way the stock goes, which is why we are watching three key levels in order to direct our trading.
The three levels in the video below illustrate a range of possibilities for what comes next with NVDA. There is no real telling what a stock like NVDA will do in the face of news like this. On the one hand, this could very well impact to their business, but on the other, the stock may just shrug this news off as investors pour into it at a “discounted” price.
The three levels to watch are 420, 400, and 375. To the upside, watch for 420 to be broken. If that happens the stock could be well on its way again with resistance not coming into play until around the previous high of around 440. To the downside, 400 should hold as a support level, however, if that is broken in a strong downside move, 375 is the last line of defense.
Make sure you keep this stock and these levels on your watchlist as the market looks to find some strength and resume on the path of a bull market.
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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

We talk a lot about support and resistance in these articles and video breakdowns, but what are they exactly? Today, we are going to go into what they both are and some of my tricks for finding the most meaningful support and resistance levels. The best part, once you learn what they are and how to find them, you can take that with you for any stock you are analyzing for a potential trade.

Support

Think of support as your floor. If you were to bounce a ball off the floor, the ball is likely to bounce back. However, if you were to throw the ball hard enough at the floor, you are liable to break through. Support is a specific level at a certain price on the stock.
Support is also referred to as demand, it is what prevents a stock from falling. In a real demand zone, buyers do not let the price drop through this area. However, if buyers are overwhelmed by sellers, the stock can break through this level and fall rapidly. Demand is usually a zone or area, not a level like support.

Resistance

Resistance is the ceiling.
Resistance, also known as supply, is the level (or area when talking about supply) that provides resistance to the stock’s price from going any higher. Sellers step in at these levels or areas and prevent the price from rising any higher. Once buyers muster enough strength to overwhelm sellers, the price move to the upside can be drastic.

How to Identify Support and Resistance
As I say in the video below, there are any number of support and resistance levels on a stock at any given time, so how do you find the most meaningful levels and areas? Well, you start from the higher timeframes, the weekly or daily timeframes, then you work your way down to the smaller ones, one hour and the 15 minute.
This method is extremely important as many times, bigger timeframes reveal important, more explosive levels. The more times a stock’s price touches support/resistance, the more explosive a potential move becomes. This indicates pressure is building up to break through that level. Expect a drastic move when it finally does.
Support and Resistance Example: Roblox (RBLX)
As you can see on my chart in the video, there are any number of support and resistance levels on a stock at any given time, the trick is finding the most meaningful ones for where price is currently. In our Roblox (RBLX) example, we are using the daily timeframe to look for our meaningful levels and we find one, based on the price action of the last few weeks, at around the 42 mark.
We can see the resistance to the upside pretty clearly as price tried several times to break through this level, but failing each time. However, like we said, the more times this level is tested, the weaker it becomes where one good push to the upside could not only break through this level, but send the stock surging higher.
When in doubt, zoom out. That is what I tell my students. There will be too many false levels and zones if you look for major levels on the smaller timeframes. Why it helps to look for these levels and zones on the higher timeframes is because of the larger aggregation of time in each candle.
This gives you a summary of where the stock found support or resistance over a longer period of time, making spotting these levels easier. For our trade idea below, you can watch the market to see if it carries RBLX higher, bursting through this level to the upside. Keep this trade and these support and resistance insights handy the next time you are looking for a big trade.
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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

– ETF Watchlist –
The markets appear to be stabilizing in the United States, but if you haven’t yet heard, the market is strong for Japanese stocks. Warren Buffett added a spark in April when he visited Japan to announce that Berkshire Hathaway boosted its investment in Japanese trading houses to 7.4%. Overseas investors followed suit, buying $7.83 billion in Japanese stocks.
The prospects for Japan continue to look up as well, even well into June. So where does the opportunity lie for investors and traders in this country? Well, we can look to Japanese ETFs for a little slice of the action.
Now, these ETFs may not have the highest volume, so trading them may be a bit difficult. However, if you were to go long the equity itself, you could play this as more of a short-term play, looking for the boost in buying to continue. Let’s take a look at one of our options when looking across the pacific for solid returns.
iShares MSCI Japan ETF (EWJ)
One of the most common Japan ETFs is EWJ. This ETF has broad exposure to Japanese stocks in order to make sure your boat is lifted by this rising tide. Some of the stocks Warren Buffett’s Berkshire Hathaway is buying up are some of the top holdings in the ETF.
For example, two of the countries largest financial groups Mitsubishi and Sumitomo are among these holdings. If the Japan trade is set to continue, which the Oracle of Omaha seems to believe it will, this could be a god add to your short or long-term portfolio. Keep an eye on this ETF going forward to see if the Japan trade has ay legs.
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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 –
The market is moving higher as of this morning, however, we still believe there could be a little bit more to this pullback in the meantime. The number to watch on the S&P 500 is still at that 4300 mark, a bounce could come there are even a little bit before, but regardless, be careful of going long just yet.
There is still a bit of weakness to the market currently, but if we can build a base at the lower 4300s then we might be able to make another mover higher. With the AI tech boom still very much in place, those looking to go long might want to keep their eyes on when to go long on the tech sector.
Technology Select Sector SPDR ETF (XLK)
The level we have been watching for the past couple weeks on XLK has been 168, which has turned into a nice little support level. If we can get some kind of retest of this level and a move higher, this would be an opportune time to ride this ETF higher.
However, since the market has not really confirmed strength to the upside after pulling back for the last week, you must also watch this level as a breakdown point. If this level should give out this week. Stay away from your long positions for the moment.
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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 still remains our view that this pull back is still very much in effect and we won’t see indexes like the S&P 500 find some support until at least 4300. This gives a good point to look for a reversal or at least a bounce for the market. Even though we are still technically in a bull market, we are now someone on the fringes of one where we could easily slip back out of one.
Remember, a bull market is 20% off a recent low, our low came back in October of last year. Since then the market has steadily moving higher and higher, lending more credence to the old saying, “the trend is your friend.”
In this case, let’s look at the ETF that tracks the S&P 500 index to see where we might find an area to trade on the SPDR S&P 500 ETF Trust (SPY).
SPDR S&P 500 ETF Trust (SPY)
If we are looking to see how prices react at the 4300 mark on SPX, the S&P 500, then traders would want to keep an eye on one of the most commonly traded tickers in the market, SPY. A 4300 mark on SPX would translates to around 430 on SPY.
Additionally, if you look at the SPY one year chart, you can see that we had a reject around this area in the past, right around the 431.61 mark. We can now use this as our old resistance turned support. However, as I always try to tell my students, this is not your confirmation to hop into a trade.
You also want to look at price action, as well as find other confirmations of this as a trade to take. Gone are the days where you enter a trade without knowing your risk management ahead of time and trading with only one (or even no) confirmations. This is what most traders do, losing traders, and we don’t want to lose anymore.
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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

Workforce management company, Workday (WDAY), has made quite the recovery from lows of just a few months ago and is now looking to hold above a major resistance level. This level of near 220 acted as firm support with price bouncing off it many times before breaking through to the downside.
Now, as the market moves higher, WDAY has as well, surpassing this level and possibly setting up for another move higher. This could very well be another situation where we get a break and retest of a major level.
As you can see on the chart, price took a recent dip before finding a mini level of support, which then propelled the stock higher. Holding above this 220 could mean the stock is off to the races, if the market can push higher and take the stock with it.
This is a very bullish looking chart, however, you would still want to be patient and look for confirmation, as well as a good entry. If you are entering a move higher or lower then most often you are chasing the move. You do not want to chase a move because over the long term this will lead to a losing record. Best to pick your entries based on an A+ setup, not a move that is already underway.
Keep this trade and stock on your watchlist to see if it gives you any of those A+ setups with minimal drawdown, so your stop is not hit and you miss the move higher.
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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

– ETF Watchlist –
While our expectation is that the market wants to move higher, we are still of the mind that before that happens, the market may pullback a bit. This is, of course, is a healthy thing for a market that has been red hot lately, and will ultimately lead to some nice set ups with better entries than going long at the top of the market.
Areas to watch still continue to be the tech and communication services sectors as investors look for the AI boom to continue to juice the market. As long as this hype remains, we expect the majority of the buying to be concentrated in these two sectors. So let’s take a look at the tech sector as that has been powering the market higher for much of this rally.
Technology Select Sector SPDR ETF (XLK)
The XLK has retreated back from making highs on the year near 177 and appears to have settled at around 172. As of this writing, the fund looks to be wanting to make a move higher with the tech giants gaining a bit of momentum to start the trading week.
However, this is not yet confirmed as a move higher seeing as how the pullback from last week was significant enough to suggest there could be more for the market to shed. But, as this sector has led the market higher for most of this rally, we think it will continue to do so, especially as the world is captivated by the AI narrative. A pullback to the 170 mark would give better risk reward if we continue from the pullback on Friday.
This sector has earned a place on your watchlist for the foreseeable future until there is confirmation otherwise. Be sure to trade smart and off key levels, not off hope or anticipation of what you think the market could or should do.
[embedded content]
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

There’s a famous phrase among the trading community. “The trend is your friend.” Meaning, when there is a clear trend, it’s best not to fight it. Many a fortune has been lost trying to bet against stocks or markets that are trending in one direction or another, just ask those big institutions who have been shorting a stock like Tesla (TSLA).
No, it’s rarely a good idea to go against the grain in the market. So that is why we have been focusing on finding stocks that are breaking out or look like they’re about to, like Roku (ROKU). The level to watch on today’s stock is going to be the 75 mark which has gone back quite a ways by looking at the chart.
Given the trend, we assume that if ROKU can break through this 75 level and hold above it, it could make a run to higher prices. Keep this trade idea close at hand.
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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

After nearly two years of a bear market, unprecedented interest rate hikes, and general macro- uncertainty, which unnerved investors and led to volatile trading, things have finally calmed down over the past few weeks.
Over the past month, the Chicago Options Exchange Volatility Index (VIX), dropped from 22 to 13; one of the steepest slides in two years and its lowest level since prior to February of 2020. This suggests investors expect relatively smooth sailing for the foreseeable future.
However, it might be premature to become complacent or overly optimistic. This week there are several events which might unnerve investors and induce a renewed round of market volatility.
Items on the calendar this week include key economics data such a the Consumer Price Index (CPI) and Producer Price Index (PPI), retail sales data, and the all-important Federal Open Market Committee Meeting (FOMC), in which Chairman Powell will reveal the Fed’s planned path for interest rate policy.
With the VIX at a multi-year low, it might make sense to look at some volatility-based ETFs that would benefit from either a sell-off or simply an increase in price swings and market volatility.
Before getting to a few of the ETFs we can employ, there are a few things we need to understand about VIX-based products.
The VIX itself cannot be traded. It is simply an index which is calculated based on the implied volatility of a mix of the S&P 500 Index options. These products are linked to volatility futures. They own or short futures based on the CBOE Volatility Index (VIX). The VIX index portrays the price volatility embedded in the option prices of the S&P 500 Index for the next 30 days.
Investors need to understand that these funds track the futures on the VIX and not VIX itself. Because of the nature of the VIX futures markets, the rolling cost of futures may be detrimental to performance results. Thus, these products may lose money over the long term. Investors need to approach these products with care.
The ProShares Ultra-Short Term Volatility ETF (UVXY) is one of the more popular ways to play the VIX index as investors can bet on increases in the expected volatility of the S&P 500, as measured by the prices of VIX futures contracts.

UVXY started trading all the way back on October 3, 2011 with an expense ratio of 0.95% and total assets under management of $481 million. Volume averages around 45 million a day.
It uses a 1.5x leveraged exposure to the index investing in the first- and second-month VIX futures with a weighted average maturity of 30 days.
The fund rebalances every day, so it’s not a product to be held very long. A good time horizon would be no more than 2 weeks as the daily reset can result in negative compounding effects.
Highlighting the long-term downward pressure on Monday the UVXY will undergo its 11th reverse split since its inception; on adjusted it is now down 99.9% from its split adjusted first day closing price of $2,058,000,000.
The iPath S&P VIX Mid-Term (VXZ) is an exchange-traded note (ETN) that tracks the performance of medium-term VIX futures contracts. This gives a way to bet on the S&P 500 using its exposure to VIX futures with average 5-month maturity.

The use of future contracts typically between 4 and 7 months allows investors to capture exposure to volatility over a longer time horizon.
The longer time frame can be advantages when compared to other volatility products by reducing the potential negative impact of contango.
Using the further out contracts can help lower the costs vs. volatility products that continuously roll over their positions.
Assets under management are a mere $56 million with an expense ratio of 0.89%. VXZ is a leveraged product, which means that its returns are magnified relative to the underlying index. This can lead to significant losses if the market declines. The price is hovering at $19 a share, which is a 3-year low.
It is down only 10% for the year to date, which compares favorably to UVXY’s 50% drop during the same period.
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