Wealthpop

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

One of our main goals with these video walkthroughs, and indeed, our strategy of trading is to demystify the world of options trading. You’ve probably heard it all. Options trading is impossible to be profitable in, its not a viable means to make money, so on and so forth. However, what if the real reason you haven’t seen a meaningful shift in your options trading ability is much simpler than that?
What if it all comes down to the education, or lack thereof, that is the real bottleneck? Well, we hope to have a solutions to all your hopeful traders out there. Today, we have yet another example of how we plan to declutter your trading strategy by finding clean and obvious trade setups, so let’s get into it.
Ulta Beauty (ULTA) is one of those simple examples, which has set up a clear level of support around the whole psych number of 500 as you can in the video below. However, what you will also have noticed is this level of support has been broken, implying lower prices could be the the most plausible outcome at this point.
If we are looking at the yearly chart, we don’t see another level of support until 480, a significant drop from current levels. The higher probability trade here would to likely take puts, while being mindful that a bounce, however big or small, could come into play at that 480 level. My advice? If you were to take a short position, scale into your position with a stop near 505, as you could get a retest of that 500 level if the market shows us strength. Be sure to check out the full video below for any additional thoughts on this setup!
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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
There isn’t much green in this market and, even on good days, there isn’t much to jump out of your seat for. However, there is one clear sector of the market that seems to be propping up the rest of the market. This sector should come as no surprise to seasoned traders as it is usually the leader of any rally the market is treated to.
The tech sector is home of some of the most valuable companies in the world and companies that investors feel the safest investing their money into whether the economy is on the rocks or not. There aren’t too many rosy pictures being painted of the economy, but that doesn’t always translate to a stock market that mirrors that sentiment.
In fact, there is still a bullish rally going on, albeit a slow-moving one, until there isn’t. Which is why we are shifting our attention to the sector that is leading the pack.
Vanguard Information Technology ETF (VGT)
Though there is resistance that is incoming just a few dollars away, this may make the setup all the better. This resistance level comes into play around 391, at the time of this writing, the price of the ETF is just under 390. Keep this level on watch if the strength in the sector continues to maintain.
For a bonus ETF play you should have on watch, be sure you watch the full video breakdown below!
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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

Is this market rally just getting started, or is there some clear signs revealing themselves that this could be built on a house of cards? Well, as always, you needn’t look much farther than the charts to see what clues are being left behind for market participants.
When it comes to the Nasdaq (NDX), if you were to look at the chart, ignoring any patterns that were created, you would simply see a market that is on a tear. However, once you start to move past that base level analysis to see what’s going on under the hood, you’d begin to see something you may not be so confident about.
Students of mine are all too familiar with a rising wedge formation. This is often a bearish signal that forms just as a stock, or in this case, an index is ready to give us some kind of pullback, the size of which is the only truly unknown piece of this puzzle.
How do we know this? For that we can move our attention over to the S&P (SPX) to see how this formation has played out in the past. In the video, you will see many rising wedges that have taken place in the past on SPX and the resulting move. This formation, as we can see, has usually led to a pretty significant pullback in price. The only question that remains, is will this bearish pattern be confirmed on the NDX?
The answer to that will only be revealed to us as time progresses. However, this is still a great lesson and something my students and I will keep an eye on closely so as to not miss out on any of the upcoming moves. Be sure to watch the video below for the full breakdown.
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To learn more about this setup, as well as how my students and I plan to trade it, join my Smart Trades options trading service today! 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

ETF Watchlist
If you’ve been keeping an eye on the market in search of a good swing trade to make, chances are you’re not having too much fun. Most of what traders and investors have been treated to is chop, and for traders, especially swing traders, this is about the worst thing that could happen to this longer-term strategy.
Chop eats away at your options contract value if the implied move doesn’t come as expiration approaches. Experienced traders know this effect as time decay, or Theta. What Is Theta? The term “theta” refers to the rate of decline in the value of an option due to the passage of time. This means an option loses value as time moves closer to its maturity, as long as everything is held constant.
With chop, this is exactly what happens and why it’s a traders worst nightmare. You may have done all your homework, found a great setup, and applied a reasonable trade, but if the stock doesn’t make a meaningful move toward your strike price, you’d be better off cutting your loses and waiting for a break out of the range the market is in.
We thought CPI, which was released earlier in the week, would finally break us out of this range, but as we all know, any break was only temporary before falling back into this defined range we have been hovering in for quite some time now.
However, there is one trade that we have been watching for a while that is giving some signs of life.
iShares 20+ Year Treasury Bond ETF (TLT)
For the past six months, the price of TLT has also remained in a range, not breaking lower or higher, despite the Fed continuing to raise rates. The value of TLT works in an inverse direction of rates. Meaning, if rates rise, the value of TLT is likely to decline. However, if rates decline, the value of TLT should rise.
Since rates are continuing to steadily rise, one could keep TLT on their watchlist for a short play. If, however, the Fed was to cut rates like has been the rumor for later in the year, a long play could be entered in anticipation of that. For now, it is best to add this to your watchlist as my Smart Trades students and I have for the past several months. Be sure to join us to get in on all the action for when that time comes and to not miss out on all the other trades we will make in the meantime.
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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

ETF Watchlist
In light of April’s CPI print coming in lower than expected, its lowest print in two years, we already have an ETF in mind for our Smart Trades service. Anything that involves risk-on stocks or technology names. As investors look at this as a sign to jump back in the market with the hopes that maybe this causes the Fed to rethink their rate hike strategy sooner rather than later, these stocks should be the ones that are getting ready to move the market.
That being the case, the fund that is on our watchlist today is one of the most heavily traded funds out there. This means there is plenty of liquidity and therefore, pretty much a guarantee of getting a good spread on the contracts between the bid/ask, as well as high enough volume to get a meaningful move. Let’s take a look at what ETF we have on watch, following the report of cooling inflation.
Invesco QQQ Trust Series I (QQQ)
The Q’s or QQQ is one of the most traded funds out there, next to SPY, seeing as how these funds aren’t exactly sector specific and attract a wide number of traders to them. Some of QQQ’s largest holdings come from well-known companies like, Microsoft (MSFT), Apple (AAPL), and Amazon (AMZN), which investors should pour back into now that there is cause to be more bullish and optimistic about where inflation is headed.
With inflation cooling and stock prices rising, I would say to watch out for 323.5-324 retest before heading higher. However, like you should do with any ETF you plan on trading, keep a close eye on the stocks that command the highest amount of assets held by the fund as these stocks will determine where the price of the ETF are headed. If these stocks head higher on the back of this CPI print, than traders can reasonably expect the prices of QQQ to head higher as well. Be sure to watch my video below for other ideas, as well as a breakdown of what we saw in the market yesterday.
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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

ETF Watchlist
The market, once again, is not giving traders much to work with. Yesterday was one of the lowest volume trading days since November 25th 2022, which was a half day for Thanksgiving. This may set the stage for a slow week leading up to another CPI drop, which often has the ability to move the market in either direction.
If CPI comes in a bit softer than expected the market may surge higher, however, if the inflation number comes in a bit hotter than expected, it could send prices careening off the cliff. Of course, the market has a mind of its own, so the opposite of both are just as likely to happen, but one thing is for sure, movement should follow that announcement.
The problem most traders have been having is there hasn’t been too much trend in this market. Any surge in prices is often tailed by a drop in prices and and drop in prices means a surge could be right around the corner as market makers move prices in the opposite direction or the initial move.
However, we can still look for certain sectors of the market that will give us more trend than if we were to just trade the overall market with ETFs like SPY or QQQ. Let’s take a look at one of those sectors now.
Consumer Discretionary Select Sector SPDR ETF (XLY)
One sector that has started the week off stronger than other is Consumer Discretionary sector, which we will track using the XLY. The ETF is consolidating between 145-150 and with the coming catalyst of CPI, which could lead to a break of either of these levels and could be what sends the price higher or lower, depending on the final reading. With the strength coming into the week it wouldn’t be too far fetched to assume XLY could end the week with strength, but this largely depends of the CPI reading.
If the ETF breaks the 145 mark then we could suspect the strength to fall off, but with volume to the upside and above 150 we could see some follow through. Watch the video below to see what other sectors we have on watch before the week really picks up.
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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