Liz here… for a minute. It’s Money Calendar Friday, and Tom Gentile is back with two money-doubling ETF plays, this time on one of the SPDRs. A nice way to close out the week, don’t you think?
Tom sent me a long, and very detailed, analysis by email at 1:58am (obviously – as Ghostbusters, he and his team are up into the wee hours) and honestly, it’s so good it doesn’t need a lot of commentary. So I’ll sit back and shut up (for once) and just let him take it away.
Well, I can’t ENTIRELY keep my mouth shut, but I’ll make an effort.
The coolest thing about this play is that, as Tom describes it, it includes “a bit of Fibonacci” – a.k.a. the “golden spiral” that appears everywhere in nature, from nautilus shells to snowflakes.
I myself am a bit of a nautilus nerd, no doubt because of an early obsession with Captain Nemo and his “Nautilus” submarine in 20,000 Leagues Under the Sea.
(I actually once made a replica of Captain Nemo’s undersea pipe organ in a wine glass, but I digress.)
Mostly, though, this play is straight Money Calendar – with a couple of 100% profit opportunities based on super-reliable historical patterns.
Tom’s 90% Accurate XLU Trade – And How the Fibonacci Sequence Fits In
Before I even go any further, I’m going to ask that my editor, Andrea, say nothing about my replica of Captain Nemo’s organ. I know she is going to. I can already hear it. Thank you very much for refraining. (Editor’s Note from Andrea: I could not resist, I’m sorry.)
All right, now here’s Tom:
“One of the things I like about Money Calendar is the Money Calendar data IS the catalyst for the trade.
It doesn’t need any extra added technical analysis added to decide on trading options on it.
Adding in technicals can sometimes talk you into a so-so trade setup or talk you out of a trade that may end up doing well.
There are, however, times I do like to peek at one or two technical pieces of info, and one is Darknet, to be discussed down the road. The other is Fibonacci Retracement levels.
And that is what I am showing you here today. A Money Calendar pattern combined with a bit of Fibonacci.
Here is the Money Calendar data for the Utilities Select Sector SPDR Fund (XLU):
This has a positive power meter and a 90% accuracy, meaning it has traded higher 9 of the past 10 years over this specific period of trading days.”
As a side note from Liz:
Utilities are one of the sectors that people always run to when the market feels a little uncertain (like now), because, no matter what happens with Robinhood and Tesla, you still need to shower and keep lights on. I have a whole theory about how you make money scientifically off Maslow’s Hierarchy of Needs, but that’s a separate issue.
Ok, I’ll be quiet, here’s Tom again:
“I would like an average profitable move amount to be higher, but if you take a look at the profit and loss bar chart, you can see last year had the highest profitable move over the past 10 years.
If we can even get half that amount this year, there should be a profitable opportunity with it.”
This is where the Fibonacci part comes in.”
And this is where Liz butts in to get excited for a minute:
In trading, the Fibonacci retracement levels are naturally reoccurring, mathematical levels that show major support and resistance levels for a stock.
The percentage here tells you how much of a previous move the stock has “retraced” (hence, retracement level). And those official levels are 23.6%, 38.2%, 61.8%, and 78.6%, though traders often consider 50% retracement an honorary Fib.
Here’s Tom again:
“Below, you see the chart with a Fibonacci retracement over our tool’s default 150-day Fib look-back. As you can see, it’s at the 38.2% Fib retracement level and likely to rebound.
(“Fib retracement level” sounds like a really high-tech tool from Pinocchio of the future – that was Liz, sorry.)
In this scenario, we get the Fib retracement (potential) support and the Money Calendar 10-year historical bullish pattern coinciding with each other.
And that means a nice chunk of change for us in less than a month.”
Dollar and Nickel Slots on The Nautilus Are Both 100%
Liz again.
One thing I love about Tom and his team is that they always, always send me two separate trades for the Dollar and Nickel Slots people. These guys are thorough. They’re true Depth Traders. The level of knowledge and education over at Power Profit Trades is unparalleled – you can actually go watch the incredibly helpful Cash Course right here for free.
The cool thing about these two plays is that – even though one is riskier than the other – they both have 100% profit potential. The Dollar Slots play, however, has unlimited returns, while the Nickel Slots is capped at 100%.
Tom’s “Nickel Slots” is a call debit spread, also known as a bull call spread – you’re buying a call, but at the same time, selling another call for a bit of hedge. (A shrubbery, as Monty Python would put it.)
Tom says, “For max profitability we need XLU above the sold strike of $67. Assignment and execution should happen making for a potential ROI of 100%.
“XLU above $67 means the market can exercise the right to buy or call you away from the stock at $67. Cool, your account can then call the stock away from the market at $64 to deliver it at $67, making the difference of $150 per contract.
“If the account makes $150 on a cost of $150, that is the 100% ROI.”
Here’s the screenshot from Tom’s tools:
And here’s the Action to Take:
NICKEL SLOTS
Action to Take: BUY-TO-OPEN the XLU Oct. 15, 2021, $64 Call (XLU211015C00064000) Pay no more than $1.50 (a net debit of $1.50 or less) for the spread. Enter as a Good-til-Canceled Order (GTC). |
Dollar Slots are a straight call – more risk, more potential reward. Basically, Nickel Slots are like having a pet while Dollar Slots are like having kids.
I’ll shut up.
Tom says, “Should XLU trade up even 3 points, it would make this at least 3 points In-the-Money, and that 3 points would make the premium at least $3.00 on Real Value/Intrinsic Value alone.
“If you bought to open at $1.14 and could sell to close at $3.00, that is a profit potential of $1.86 or well over a double.”
Here’s the fancy screenshot.
And here’s what to do:
DOLLAR SLOTS
Action to Take: Enter as a Good-til-Canceled Order (GTC). |
OK, I said I would shut up. “The DNA test determined that was a lie.” But I tried.
While I’m here (and apparently, not going away anytime soon), I should just point you to Tom’s put-selling strategy in Rocket Wealth Initiative. It’s a way to target the top 100 “best-in-class” stocks in the market – with much less cost and risk.
The best-case scenario is potentially adding thousands to your account almost weekly depending on the size of your stake. Worst-case scenario, you’ll add a top stock to your portfolio for what could be a fraction of the normal price! That’s about as close to a win-win as I’ve ever seen in this business. Click here to learn more.
I’ll be back on Monday with a fresh play from Chris Johnson – and next week I’m going to try to snag an interview with value heavy hitter Tim Melvin, too. Tim, by the way, is Garrett’s father-in-law. We’re all one big, dysfunctional family over here.
But rich. That’s the main thing, right? Right?
Liz