November 20, 2022

We are waiting for the OEX to catch up to the 200 day as the NYA, has done already. Stock market bulls want to see VIX below 27 on our weekly VIX Vidya chart.

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HOW TO BUILD WEALTH USING ETFS WITHOUT KNOWING HOW TO TRADE

November 17, 2022 Reading Time: 5 minutes

Let’s kickstart things and conduct a quick thought experiment, shall we?

Who is wealthier?

Someone who works eighty hours per week and earns $450,000 per year,

or…

Someone who works 20 hours per week and earns $250,000 per year?

Insert the Jeopardy theme song here…!

There is no right or wrong answer because multiple strong cases can be made for both. 

If we break things down into absolute terms, the person earning $450,000 has more money. However, the person making $250,000 is more productive per hour and has a lot more available time once the workday is done.

Your choice speaks volumes about who you are as a person, your mindset, and the life stage you are currently experiencing. I encourage you to ponder WHY you chose the answer you did.

For example…

You may be in a mid-life phase, the prime of your income-earning days. You are working hard every day to build your passion business as big as you can. You want to build wealth while the going’s good and while you have the energy to do so. One day you plan to slow down.

Maybe you are a more balanced lifestyle person and would instead choose to make less money, work fewer hours, and enjoy hobbies or adventures outside of work with family, friends, etc. To you, wealth is more about living, not working.

Again, there is no right or wrong answer. We are all in the position you are in and must do what works best for our own situation and investment personality.

Ok, let’s try another thought experiment…

This time, we’ll assume that your investment dividends and interest income pay your lifestyle expenses. Therefore, your income is separated from your time because your bills and activities will get paid even if you do zero work.

Does that seem like a wealthy person and lifestyle to you?

If so, then you likely have an intuitive understanding that wealth is a by-product of assets operating independently of your time. Take a moment to think about that…

Wealth is a by-product of assets operating
independently of your time.

Does this thought provide you the idea of freedom to do the things that excite you, make the hairs stand up on the back of your neck, and allow you to spend more time with those you love?!

It certainly does for me.

With some of my spare time, I give a helping hand to those who are not as fortunate through local charities and fundraisers. I started the 100MenWhoCare group in our town, where we focus on raising $10,000 in 60 minutes with 100 men who donate $100 each.

My daughter Mirabelle and I are part of the BrainFreeze Challenge, where our team is taking the plunge into ice-cold Canadian waters to support Mental Health for Youth programs. Did you know that suicide is the #1 cause of death for young people? I didn’t and was both shocked and saddened by that statistic. Shameless plug alert – I would love it if you helped us support the cause!

I also am an avid inventor who designed and created the world’s first flying jet surfboard – VeFoil!

How do I have time for all of this?

Because my brain thinks and works differently than almost every other trader and investor, maybe even person, I know.

Start making your capital work for you,
and then you can help others.

My life’s work is helping individual investors and financial advisors become wealthier. I help them make more money with less effort and less risk by only holding assets rising in value. When that particular asset trend ends, we reinvest our capital into a different asset that has started a new uptrend.

This asset revesting strategy allows investors to sidestep and even profit during falling stock and bond prices without taking any additional risks. In fact, it can reduce portfolio risk and volatility if you are committed to the revesting process.

What I do is very different from the old Buy-And-Hope investment strategy of the past. You know, the one we all grew up with. The strategy pounded into us as soon as we learned what money was and trumpeted by virtually all investment advice you could find. Only now, instead of the ‘big-money’ we were all but promised, we get to watch as most portfolios take an ugly swan dive and will likely end with a painful bellyflop.

No. Just NO. It does not need to be this way and certainly isn’t in my world.

What I do is the complete opposite. No Diversification, No Buy-and-Hold, No Positions at times, plus I manage positions to control risk and profits. These are things you likely don’t do, and a way of investing you won’t find any advisor doing unless they happen to be one of my clients.

I do this by helping enlightened financial advisors and individual investors embrace the idea that by using technical analysis we are able to follow price trends very closely to know when one trend has ended and a new one has started. I only invest in the most liquid assets (stock indexes, bonds, US Dollar index). I also embrace the use of systems that operate without our time and energy, which continue to work for us whether we are sleeping, playing, or on vacation.

To bring this full circle, this happens the same way that dividends will arrive and be deposited into your brokerage account no matter what you may be doing elsewhere.

Ways income can be automatically generated
with this new way of investing

They are:

• Dividend payments from index ETFs
• Bond ETF interest payments
• Share lending interest income
• Portfolio growth through revesting trades (we locked in a 5% gain yesterday in SPY)

Now, if you don’t know anything about trading or investing, that’s fine. 

And if you value your time and don’t want to think about managing your investments, that’s not a problem either. 

I’m all about being as efficient as possible and not having to do anything that can be done for me.

This leads to having an asset revesting strategy executed automatically in your brokerage account. I believe human error is the reason why most traders fail to make consistent money. People’s emotions, lack of self-discipline, missing trades, incorrect trade order execution, etc., all lead to investing underperformance.

For these reasons, I offer autotrading of my primary strategy at no cost. I know it’s the best option for individuals to build wealth on autopilot with less risk and less stress. And I am all for a world where we can spend more time and energy with the people, events, passions, etc., that cause our cup to runneth over.

The bottom line…

Having an asset revesting strategy to make your capital work for you while you are boating, golfing, working, sleeping, or traveling is like having another profitable business making you money…only without the headaches.

I explain exactly how this process works below if you want to learn more.

CGGS Investing

If you have any questions, I’m always here to answer your questions!

Chris Vermeulen
Chief Investment Officer
www.TheTechnicalTraders.com

HI HO SILVER!  DIFFERENT WAYS TO GET IN ON THE ACTION

November 14, 2022 Reading Time: 6 minutes

Precious metal prices – gold, silver – and related miners have been bearish for quite some time now.  It looks like that is starting to change. 

When I look at the charts for gold and silver, I see similar periods of consolidation with multiple tests of support.  But even more interesting is the recent upturn in price and moving averages with some new higher highs.  That makes me interested but tentatively bullish on the metals.   

There are many ways to participate in this sector.  There is, of course, physical metal – bullion or numismatics.  I’ve always liked the idea of having some physical metal that I can put my hands on.  And there are many secure storage options as well.

The metals sector has several popular ETFs – GLD, GDX, GDXJ, SLV, SILJ, etc.  One approach would be to simply buy shares in whichever one is the Best Asset Now (BAN) one or more of these ETFs.  That’s as easy as buying shares of stock.  But, like owning stock, gains may be slow to come as we participate in the price action tick for tick. 

Gold Daily Chart

Silver Daily Chart

As an options trader, I like to give myself a little room to be wrong on price and reduce my cost basis by selling option premiums.  There are two basic ways to do that.  I can buy shares and sell “covered calls” against those shares.  Or I can sell puts, essentially committing to buy shares at the strike price in return for receiving an option premium.  The profit and loss graph for selling a put is the same as for selling a covered call.  

I prefer the “selling puts” strategy for its simplicity and relative ease of rolling out in time and up in strike price when there is an uptrend in the underlying shares.   I don’t own any shares with this strategy.  I’m just committing to buy shares at a certain price for a certain time period and getting paid to do that.  So, it’s important to only sell puts for the number of shares I’m willing to own at the strike price sold.

Selling Puts For Consistent Income

While the option selling strategies presented here can work on any stock or ETF that has options, they work best with relatively lower-priced products that are under about $25.  A commodity ETF such as SLV – currently trading around $20 a share — is a good candidate.  SILJ at around $10.50 a share also looks good.

If we sell puts, we may have shares “put” to us at some point and will then own the shares at the strike price we sold minus the premiums collected.  Having shares put to us at a reduced-cost basis is part of the plan.  When we sell an out-of-the-money (OTM) put, we’re methodically nudging the statistics in our favor by “buying low” when there is a pull-back in the underlying.  We can alternately think of selling a put as a standing limit order to buy shares with the limit price equal to the strike price we sold.

If we have shares “put” to us, we can then sell calls against the shares we now own.  And the cost basis of the shares we purchased will have been reduced by the cumulative option premium collected by selling puts.  

Trade Management

Writing puts and covered calls are relatively low-maintenance strategies that don’t have to be watched continuously.  Once we write options, we do have to be patient and let time decay in the options we sold work for us.  

If the options we sold expire worthless, we can sell new options for some future expiration cycle and collect more premium.

If our sold options are in-the-money (ITM) as expiration approaches, we can defer an assignment by rolling out for additional credit.   In that case, we would buy back the option close to expiration and sell another one further out in time.  We can usually do this for an additional credit because we are selling more time value.

Upside and Downside Risks

As with any strategy, it’s important to ask and understand “What could possibly go wrong?” before getting involved.   Selling puts and writing covered calls are neutral to bullish strategies.   There can be sustained down trends, price shocks, and changes in volatility that can affect strategy performance.

There’s always a tradeoff when selling options.  In exchange for collecting option premium, profit is limited to the amount of premium collected plus any appreciation in shares up to the strike price in the case of covered calls.  We may not have a great opportunity to sell option premium in every possible cycle. 

Keeping probability in our favor and letting time decay work for us are benefits of selling a put or covered call.   As option sellers, we don’t need large up moves to make a profit.   We have the statistical odds in our favor and option time decay working for us.  The underlying share price can go up, sideways, or even down a bit, and we can still profit.

What To Learn More About Options Trading?

Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   

If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. Brian, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. If ready to subscribe, click here:  TheTechnicalTraders.com.

Enjoy your day!

Brian Benson
Co-Author: Chris Vermeulen
Chief Options Strategist
TheTechnicalTraders.com

November 13, 2022

Our weekly Dow chart may be in play, while we possibly wait on the rest of the indices to possibly test their 200 days. The Dow may have work to do to get above 34000.

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