Tom’s Weekly Newsletter – June 12, 2024 – Fed Day!

Tom Gentile

Posted in
Newsletter

By: Tom Gentile
June 19th, 2024

5 mins read

Originally published via our newsletter previously. Subscribe for early access!

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There wasn’t too much of a bullish or bearish reaction to today’s Fed decision to leave interest rates unchanged.

Chalk that up to the premise this was an expected announcement.

No one seemed to be expecting them to raise or cut.

The concern is what is going to happen going forward.

The amount of rate cuts to come our way this in 2024 were much greater than what they are now. Some camps were of the mind we weren’t going to see a cut at ALL this year, (they still might not).

But Chairman Powell did say they are expecting at least 1 this year. For some people that is 1 more than they were currently thinking and to others that is less than they were expecting.

This was taken as a ho hum batch of dialogue apparently as there was no real major price move in the markets big three indexes – at least at the time of this writing.

The markets did gap up on better-than-expected inflation news but did a slow drift into the Fed announcement. Post the announcement things are still at their lows of the day.


Markets in Focus: QQQ – Invesco QQQ Trust (the Q’s)

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The majority of the time I have a chart and dialogue around the SPY which is a tracking ETF so to sepak for the S&P 500.

The Q’s can be looked at as the equivalent for the NASDAQ 100 as it tracks the price and performance of stocks trading in the NASDAQ 100, which are more or less technology stocks.

The NASDAQ and the S&P 500 prior to the Fed speak today were at or near all-time highs.

Post the Fed decision today and the follow up q&a with Fed Chair Powell the Q’s are holding up at or near their highs.

Should the Q’s avoid a sell off by end of day I would contonue to lean more bullish in my expectations of price going forward.

Money Calendar Process

Last week I showed you all there is a new list to search on for Money Calendar setups.

It is the list of stocks connected to Artificial Intelligence or AI.

For those of oyu new to my educatoin, tools and newsletter, it is my intent to show you a base overview of the Money Calendar process I use to help aid in determing my directioanl bias and potential price target for a security using Money Calendar.

What I Analyze

Power Meter: Power Meter is a gauge of the price move from 10 years back to the more recent years.

When you look at the Power Meter you draw an invisible line from the left to right and if it is sloping up the profitable move is getting larger or is larger in the more recenet years than the 10 overall.

I only want to entertain a trade security or option if it has a positive Power Meter.  If it is a negative number I stay away from it.

Accuracy: The scan only finds securities whos had a profit 9 or 10 of the last 10 years, (90 or 100% track record) over those range of days shown, (Start date to End date).

End Date: This is the last day of the pattern being assessed.  The premise is it takes the open price on the Start date and goes to the close price on the End date.

This helps me establish the option expiration I research or choose for an option trade. I don’t want to select an expiration prior to the end date as the security may need that full amount of time to work.

And I don’t need LEAPs options as I don’t know the expected move past the end date.  I typically choose the option expiration just past the End date.

Avg. Profit: I will often times say Avg. Price Move as proft and price move to me are the same thing.

This is the number I add to (for bullishi patterns) to the security current or close price of the day prior to the start date or I subtract from the current or close price to establish a Target Price for the security.

Process to Analyze for Security Trade

  1. Positive Power Meter (Higher the better)
  2. Find 90 or 100% w/Avg. Profit 3 or better
    • (Preferred, but not a deal breaker)
  3. End date 20-30 days out
  4. Last loss 3+ years back (Not a deal breaker)

Process to Analyze for Option Trade

  1. All the above for the Security Trade, but I then look for options with an expiry just past the End date.
  2. I then look for an option that can theoretically double in value if the stock just moves it established averagte move over either the past 10 years or its average over the past 3-4 years (so long as Power Meter shows it’s Avg. Profit move is increasing in these past 3-4 years).
  3. If the option price too high for my per contract risk I then analyze Call or Put Debit Spreads.

Tom Gentile
C1P: Chief 1-Percenter

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