I frequently tell everyone that you should not care which direction the market goes because you can

• 12/11/22

I frequently tell everyone that you should not care which direction the market goes because you can make money if it goes up or if it goes down. You should only care that it's got a consistent direction. Because any time you get a consistent direction driven by a meaningful event, like economic data or the Fed or some governmental policy, THAT'S when you can really stack up gains. If stuff is just moving around randomly with no real direction it's a low percentage guess what to buy. You will hit on things sure, but you'll miss on a lot of stuff also. But when the market as a whole is driven by a big event, like the CPI report, those low percentage plays suddenly become high percentage. Like in 2020 when the Fed was pumping money into the economy, basically every stock was going up. People thought they were geniuses because any pick was making money.. THAT'S the environment that you need to exploit as much as you possibly can. Because those periods are rare. After the last CPI report showed falling inflation we rallied basically non stop for over a week. After that momentum ran out stuff started moving randomly again.. Momentum is money. Use it when it's there and you'll increase your account size in big ways. How can you capitalize on momentum? Ok, so let's talk about leveraged ETFs.. A leveraged ETF is a fund that is designed to move at a multiple of whatever it's tracking. $QQQ is an ETF that tracks the performance of the NASDAQ 100. $TQQQ is a 3x leveraged fund that as QQQ gains $1, TQQQ should gain $3. That also means if QQQ loses $1, TQQQ loses $3. $SQQQ is a 3x inverse fund that tracks QQQ. Inverse means it moves in the opposite direction by a factor of 3. So if QQQ gains $1, SQQQ loses $3. If QQQ loses $1, SQQQ gains $3. These funds are both useful and dangerous. If the market is moving with momentum in one direction they are excellent ways to maximize the gains you make in that trend. However if the market is choppy, meaning one day up, one day down then the math works against you pretty seriously. Well it just so happens that we're entering into a week where serious momentum is guaranteed. On Tuesday the CPI inflation report is released. CPI reports have been catalysts for outsized swings in markets this year, with the S&P 500 moving an average of around 3% in either direction over the past six CPI releases, compared with an average daily move of about 1.2% over the same period. That includes a Sept. 13 inflation release that sparked a 4.3% sell-off and a Nov. 10 report showing softer-than-expected inflation that fueled a 5.5% rise and helped stocks extend their latest rally. A second helping of benign data could bolster the case for a peak in inflation and buoy equities further. The momentum from the last report lifted $SPY 8.97% from 11/10-11/30 and lifted QQQ 11.41%. This is when leverage is extremely useful because of a sustained multi day trend. $UPRO which is a 3x leveraged fund tracking SPY gained 26.91% during that same span. TQQQ which is the 3x leveraged fund tracking QQQ gained 33.86%. The point I'm trying to make here is that no matter how the CPI report or FOMC meeting next week turn out, they're definitely going to kick off a prolonged trend either up or down. You don't have to get cute trying to pick the perfect stock or trying to perfectly time the move. If you simply wait until the data is released (830a EST Tuesday for CPI) and then buy the fund that matches the direction that news warrants you'll make money. Please join us on Discord where we've been making money on trends like this all year long. I'm currently up 205% this year using this strategy and members of the Discord will tell you it works. https://discord.gg/GaUxA4dvZs ///// #cpi #tcardizzle

All of your investing.All in one place.

All of your investing.
All in one place.