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ETF Watchlist
Earnings season is underway and there has been one sector that had results much better than anyone expected, especially in light of the recent noise about an extension of the banking crisis. However, ever since companies like JP Morgan (JPM) and Citigroup (C) announced their earnings results, the sector has been on fire.
With postive earnings results and after being heavily discounted by the SVB disaster, this is a sector to have on watch.
Financial Select Sector SPDR ETF (XLF)
As financial continue to press higher, it is important to remember the broader context of the market. We are close to a demand zone, as well as a pretty large resistance area and to top it all of, we have had a week of a chop.
This could mean the bulls are just sitting on the sidelines in an attempt to catch their breath, or the rally we were treated to over the past couple weeks could be coming to a close.
But, given the haircut the financial sector took and the fact that individual names are pressing higher after better-than-expected earnings results, if you’re looking to go long, this could be the sector to take a look at.
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If you want to learn more about my strategy and how we find trades that consistently net us over 100%, you’ll have to 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!
I look forward to trading with you, but until then, as always…
Good Luck With Your Trading!
Christian Tharp, CMT

This has been an amazingly bifurcated market on both the macro and micro levels. Big picture, the bulls and bears are basically divided over two types of analysis; technical for the former and fundamental for the latter.
Meaning, bulls are pointing to the positive price action, market structure, as well as money flows. The bears are focused on economic data, earnings reports, and the Fed.
Over the past month, the two camps have been at a stand still as the major indices remain range-bound, consolidating before an inevitable move in either direction. The decline in volatility is reflected in the VIX, which has dropped to 16, the lowest since the pre-pandemic days.
In response to this change in the trading environment, Options360 has shifted gears and moved from trading mostly the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ) back to taking positions in individual names.
Reflecting the battleground nature of the market, Options360 opened two new positions, one bullish and one bearish. I’ll discuss the bullish trade today.
Johnson & Johnson (JNJ) reported earnings on Tuesday morning, where the company beat both top and bottom line expectations, as well as raised guidance and boosted its dividend.
The initial reaction was positive with shares trading around $168 during the pre-market session. However, once the market opened JNJ’s stock took a sharp drop, falling to around $160 per share.
Given Options360 had discussed opening a bullish position ahead of the report, I was watching closely and soon our bullish trade idea was in validated.
The silver lining, and one of the reasons I love running the Options360 service, is that being so focused on the stock’s price action allowed me to identify what I believe is a better opportunity for a longer term position.
Namely, the drop. The decline made little sense based on the positive earnings report, filled a gap on the chart and held long term support around $160. That fact, coupled with the level of “buy every dip” type of mentality the market has been displaying, we decided that this price action presented a great risk/reward opportunity for a bullish position.

Source: Magnifi.com

I can’t provide the exact position we establish, but the basic parameters are expectations JNJ will get back towards $167ish over the next month. Very important to note, we will use a close below $159.50 as stop loss. Defining and managing risk is a necessity for long-term success.
Tomorrow, I’ll share the bearish position in Best Buy (BBY) Options360 established on Wednesday.
If you want to get this and all trades in real time, try out my options trading service ⎯ Options360 ⎯ with this special trial offer.

Our stock on watch today is an old favorite of ours, which you’ve probably heard us alert on before. This time, we have a great trade setup for our strategy, a multi-day swing type trade. On top of that, we have a good nexus point where we could either go long or short depending on what happens at this critical level.
Lululemon (LULU) looks to be consolidating within a rising wedge formation around the 360-370 range. The break out of the pattern will likely signal the stock’s next bigger move, but which direction?
Continuing to hold below 370 could imply that buyers are exhausted and sellers are in control. However, if the stock was able to close above 370 and holding above that threshold, we would likely see sellers exhaust themselves.
Talking about the same stock again and again may seem tedious, but that actually brings up a good point about trading. I have seen many students fail to find their edge simply because they are looking at far too many stocks at once. The secret is to find a few stocks that move well on any given day and learn those handful of stocks intimately. How do they move? Is there liquidity? Does news move the stock? These are all questions that need answers.
Rather than look at the entire market, shop for a few stocks you think you can trade well and stick with those. Check out the video below for more on the possible LULU trade!
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Learn to trade 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

All after a U.S. Navy destroyer passed through the South China Sea in a show of force, according to Bloomberg. In fact, according to U.S. 7th Fleet Public Affairs…

“These operations demonstrate that the United States will fly, sail, and operate wherever international law allows –regardless of the location of excessive maritime claims and regardless of current events.”

In addition, Republican Mike Gallagher, chairman of the U.S. House Select Committee on China, said the U.S. is also working to shore Taiwan’s defenses, and is encouraging Congress to speed up military aid to the island.

Unfortunately, that’s only stoking China, which said it’s “ready to fight,” as noted by the Associated Press. Even worse, Chinese leader Xi Jinping says he is preparing his country for war. At the annual meeting of China’s parliament, he told his generals to “dare to fight.” He also announced a 7.2% increase in China’s defense budget.

That being said, some of the top ETFs running on fears of global conflict are — yep, you guessed it — defense sector funds.

With the escalation of geopolitical tensions, it might be time to consider adding some exposure to the sector. There are a couple of options for investors to gain such exposure. They are:

Invesco Aerospace & Defense ETF (PPA)
This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including Magnifi Communities’ relationship with Magnifi.

With an expense ratio of 0.58%, the PPA ETF offers exposure to companies involved in the development, manufacturing, operations and support of US defense, homeland security and aerospace operations. Some of its top holdings, like Lockheed Martin (LMT), Boeing (BA), and Raytheon Technologies (RTX) will be the companies that many countries around the world turn to as they realize the need to up their military budgets.

Certainly these companies supply much of the American military with a wide range of technologies, many of which need updating as technologies have become more advanced. This means, the sales for these businesses could very likely increase both domestically and internationally very soon.

iShares U.S. Aerospace & Defense ETF (ITA)

This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including Magnifi Communities’ relationship with Magnifi.

In much the same way PPA does, ITA provides exposure to companies that manufacture commercial and military aircrafts and other defense equipment, according to BlackRock. Some of its top holdings include Boeing (BA), Lockheed Martin (LMT), as well as L3Harris Technologies (LHX) and General Dynamics (GD).

Important to note here, however, the fee for ITA is a considerable amount lower than that of PPA, perhaps making it more enticing to defense-minded investors.

SPDR S&P Aerospace & Defense ETF (XAR)

This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including Magnifi Communities’ relationship with Magnifi.

With an expense ratio of 0.35%, XAR provides investment results that correspond generally to the total return performance of the S&P Aerospace & Defense Select Industry Index. It also provides another option for investors who see this increasing possibility of this sector becoming a more in play theme.

While not hoping for war to break out, the rate at which countries have been increasing their military budgets should act as a precursory to a higher demand for this sector.

Simple laws of supply and demand are at play in a situation like this and we as investors are tasked with finding the trends before they develop and in doing so, these are the signals we, unfortunately in this case, have to pick up on.

Stay tuned for more investing insight such as this and for even more from All Star Funds, be sure to sign up for our VIP content today!

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While today’s potential trade my not have the option liquidity to make for a good trade, it still highlights a very important lesson for when looking for support and resistance levels. One very common scenario that takes place in trading is when a former level of support is broken and then acts as resistance. The opposite is also true.
When levels of resistance are broken, they very often will turn into support levels in the move is valid. This gives a very good jumping off point when finding our levels and brings us to today’s setup quite nicely.
As you will see in the video below, Denali Therapeutics (DNLI) established a pretty strong level of support over the past few months, failing to go much lower than this mark several times. Now, it appears set to rally back to that mark.
This scenario setups the stage for a possible reject of this $26 level. However, this is also somewhere you would like to practice your patience as the stock could very easily push past this level of resistance on strong buying volume. Focusing on price action at this level will help you get a feel for where the stock is headed.
If you are thinking reject, wait for an initial reject, followed by a retest to go higher. An additional failed attempt to push higher would add confirmation to weakness at this price overall. As always, cash is a position and there is no reason to force trades, the market will be there tomorrow… well, Monday, technically.
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Learn to trade 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
After hitting a bit of a turbulence brought about by the collapse of SVB and others, the market looks back on track to make a move higher. Barring any type of massive reversal in Friday’s session or next week, the S&P’s next stop should be 4200. At the time of writing, futures on SPX, /ES, sits at 4176 in pre-market.
Translation: things look pretty bullish right now. In yesterday’s edition, we were cautious of a push higher as we are currently at resistance and traveling into an old supply zone on SPY. However, the strength of yesterday’s buying, as well as the broader context of the trend over the past few months, we don’t think it is too unreasonable to assume this rally can continue.
We urged caution because hedge funds started short positions in massive amounts. But, it is unclear their plan with these ie.) expiration, risk management.
In any case, our next sector led the pack yesterday and we think this makes it worth a look today.
Communication Services Select Sector SPDR Fund (XLC)
Over the past month, the XLC has gained over 6.5%. This would have been just the kind of trade we looked for with my Smart Trades trading service. The follow through to the upside would have worked well with our slower approach to trading.
This follow through is due to stocks like Meta (META) and Google (GOOGL), which have both climbed over 7% during that time. If the rally continues to have legs, this is one sector that will remain firmly at the top of the pack.
To this point, you should also keep an eye on these individual stocks, the strength (or weakness) of this sector ETF largely depend on these two stocks that combine to be over 30% of the fund’s overall holdings.
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If you want to learn more about my strategy and how we find trades that net us over 100%, you’ll have to 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!
I look forward to trading with you, but until then, as always…
Good Luck With Your Trading!
Christian Tharp, CMT

On Wednesday, the minutes from the March FOMC meeting revealed the Fed staff is predicting the U.S. economy will slip into a recession during the second half of the year. The tone of the comments suggests the Fed is actually fine with a mild recession if that’s what it takes to finally squash inflation.

Given the old saying of “don’t fight the Fed,” it makes sense to continue to look for funds that contain stocks that tend to perform well during economic slowdown or recession.

During such times, investors often turn to defensive strategies, such as investing in more stable assets.

One of the more interesting ways to employ this kind of strategy is the Consumer Staples Select Sector SPDR Fund (XLP).

The XLP tracks the performance of the Consumer Staples Select Sector Index, which is made up of companies that produce or distribute items, such as food and beverages, tobacco, and other household products. These are products that people need regardless of the economic climate, making them less sensitive to economic cycles.

In times of recession, consumers may cut back on discretionary spending, but they still need to buy basic necessities. This makes the consumer staples sector relatively stable, and XLP can provide a defensive investment option for investors looking to protect their portfolios during economic downturns.

The fund itself has trended pretty well over the past month, rising nearly 4% during that time.

This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including Magnifi Communities’ relationship with Magnifi.
Consumer staple companies tend to have strong balance sheets, stable cash flows, and consistent dividends. These characteristics can be attractive to investors seeking income and stability during uncertain times. Which is why, while the overall market is rising, value stocks are rising as well as investors prepare for a possible slowdown in the economy.

Many of the companies found in XLP are well-known, multinational brands, which gives them some insulation from economic downturns.

Many of these companies’ stocks such as Coca-Cola (KO), McDonalds (MCD), and Clorox (CLX) have performed well of late as investors have sought them out as safe-havens investments.

This leads to my one concern regarding the sector is many of these stocks are now trading at historically high valuations. But the nature of fund flows suggests money managers will continue to “hide-out” in these names until there is more clarity on the route of interest rates and the possibility of a recession.

Another defensive fund is the aptly named Invesco Dynamic Food & Beverage ETF (PBJ). This ETF tracks the performance of the Dynamic Food & Beverage Intellidex, which is an index of U.S.-traded stocks of food and beverage companies. PBJ has a low expense ratio of 0.63% and has outperformed the S&P 500 Index over the past 10 years.

Over the past month, PBJ has enjoyed a nice 3% gain as the market has pushed higher.

This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including Magnifi Communities’ relationship with Magnifi.

Another reason to consider PBJ is that while it is focused on food it is diversified in terms of market capitalization of its holding which range from large multinationals like KO and PepsiCo. (PEP) to smaller, more niche companies.

This is just one of the ways to safeguard your portfolio from the impending economic slowdown everyone is predicting. Aside from that, they are just quality stocks of companies that have been around for more than their fair share of rough economic cycles.

With Magnifi, you can even compare the individual stocks that make up these funds. For example, KO and PEP.

You could even compare the ETFs themselves to see which of them you would rather add to your Magnifi account.

These are just some of the tools Magnifi offers to set you on track to reach any of your financial goals. Goals like saving for college, retirement, or just how to save for a rainy day. Magnifi keeps you on point with it all to ensure you have a brighter financial future.

Explore more today!

ETF Watchlist
If you’re sensing more weakness in the market, you’re not the only one. Yesterday’s session did not instill too much confidence that this market was poised to go higher after the sell off later in the day. However, it is hard to tell which direction the market will break as we seem to be in an area of congestion where the market is just chopping back and forth.
If the market was to pull further, we would expect the level to watch on SPX to be 4075, if this support is broken, we could make our way back to 4000 in a hurry.
Technology Select Sector SPDR ETF (XLK)
If the market was to make another leg lower, I have my sights set on the sector of the market that has been largely responsible for the recent rally. Stocks like Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) led the charge with massive rallies that helped fuel this buying pressure throughout the market. However, what goes up in this market, usually comes down.
If these stocks lose steam and head in the other direction, they will almost assuredly take the rest of the market with it. Since indexes like the S&P are so heavily weighted to these stocks, if theses dominos fall, it could very well spook many investors out of the market or at least to open short positions.
The experts seem to be preparing for a pullback as well. According to Bloomberg, hedge funds have opened the largest short position in the S&P in over a decade, perhaps seeing something many of us are not. Keep an eye on the market here, congestion often leads to a big move.
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To prepare for this move and trade alongside my students and I, you’ll have to 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!
I look forward to trading with you, but until then, as always…
Good Luck With Your Trading!
Christian Tharp, CMT

With BTC breaking above that 30k mark, crypto-related stocks are are seeing a nice surge in prices. The resurgence in crypto has been largely fueled by the banking crisis that left a sour taste in many investors mouths, as well as though who have a healthy distrust for what big banks do with your money. Thus, this has led to the reminder for many as to why crypto is a viable investment and alternative to holding cash in a bank.
Given this surge in the almighty Bitcoin, crypto stocks like MARA and RIOT also seen a rise in price, taking out key levels with more room to run.
On RIOT, the level to watch is $10 after the stock broke through this resistance level and now looks to head higher. This break does not in itself signal calls, but a retest and hold of this price might constitute a higher probability trade.
Coincidentally, the same is true with MARA and with the same level of $10. A break, retest, and hold of this level should give traders a clear trade to the upside.
Remember, risk management and patience is a trader’s best friend. In any trade you make, exercise these to keep your losses smaller than your wins. These are the keys for long-term success in options trading.

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When you join The Profit Machine, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. The best part, you’ll receive all my trades every step of the learning process, so not only will you get a world-class education, but you’ll also 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
Services was the leader of the pack last week before reversing course and falling to the bottom. This is in contrast to Industrials, which ended up as the biggest laggard last week, but now jumped to the top of our sector list to start this week. Overall, there has been a bit of a lull in terms of the sector rotation for the moment.
Two bright spots, however, have been the shiny metals we’ve been talking about with one of them giving us a 100% gain on our most recent GLD trade. As stated in a previous issue, we are also watching silver and SLV for perhaps another repeat of that 100% gainer.
One of our main watches right now for my SmartTrades service brings us over to a sector that has gotten a lot of attention this year with all thats going on in the economy.
iShares 20+ Year Treasury Bond ETF (TLT)
In terms of the TLT, we are looking for a break out to the upside. Currently, the 110 level is standing in the way of that and as you can see in the video below, TLT has been bouncing back and forth in a pretty well-defined channel.
With all the attention on the bond markets and interest rates, this could be an ETF you want to have on your watchlist to be ready for a trade that could be developing. If price does break above that 110 mark, look for a retest of this level before jumping into a long position. This will give you the best possible entry and also, lend some validation to a trade to the upside.
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If you want to see all the latest trades my students and I put on for my Smart Trades options trading service, you’ll have to join 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!
I look forward to trading with you, but until then, as always…
Good Luck With Your Trading!
Christian Tharp, CMT