Jack Carter Trading

Hey traders,

There’s been plenty of anxiety about the S&P 500 lately, so let’s look at what the market is actually telling us.

SPY, the ETF that tracks the S&P 500 tick-for-tick, has been grinding higher on a six-month view.

Each pullback has found support at my short-term moving average — the 20 day — and then pushed to new highs. That’s textbook bullish action and good news for bullish income setups.

Read the Indexes First

I always start with the “big three” — SPY (S&P 500), DIA (Dow 30), and QQQ (Nasdaq 100). They tell me the condition of the broad market.

If I run a market-driven strategy off those readings, I keep myself on the right side of the tape.
Right now, the message is clear:

DIA is pushing to new highs, similar to SPY:

QQQ is also making new highs:

With all three major indexes moving higher, I’ve got a green light to run my favorite bullish income plays in names that are trending with the market.

The “Triple Crown” of Income Trades

When the trend is up, I keep it simple and stick to what works. I call it my Triple Crown — three straightforward ways to get paid:

Covered calls – collect rent on shares you own
Naked puts – get paid to potentially buy at a discount
Credit spreads – defined-risk income with a short option you sell and a long option you buy to back you up

In a bullish tape like this, it’s a sweet spot for all three.

Wrapping It Up

The market’s telling us the path of least resistance is still up.

Smart traders like us will Read the SPY, DIA, and QQQ first, then focus on stocks that are already trending higher. From there, use the Triple Crown trades I mentioned above to pull steady income while the trend does the heavy lifting.

Trade well,

Jack Carter

P.S. This tool automatically gives you the #1 ticker to trade — every single day. Check it out here.

History has shown us a pattern with Big Tech…
Here’s how I’m arming myself for what’s to come this month.

To help you discover the power of trends, every week I share with you a handful of the top trending stocks.

These stocks are picked by my purpose-built, custom-made TrendPoint software to pick the strongest trending stocks in the market right now.

If you know anything about me, you know that every trade I get into starts with a trending stock.

Unless a stock is in a strong trend, I don’t want to hear about it. In my book, wishy washy stocks are the quickest way to losing money.

This Week’s Stocks

So we got the rate cut. That’s typically bullish for stocks. But put that aside for a minute.

Think about what’s been happening with stocks BEFORE the rate cut.

While plenty of people have been sitting on the sidelines, markets have gone from some of the most volatile down days in history to all time highs.

That’s why I say avoid the news. Headlines will make you second guess yourself.

But when you trade the trend, you’re trading reality — not some journalist’s fear.

With that in mind, markets are still in a strongly bullish trend… so here’s three bullish tickers

SPY
NEM (3 weeks in a row!)
GLW

What can you do with these stocks?

Well, there are a couple of things you could consider — after doing your own research, of course:

Buy or short — For bullish stocks, this is probably the simplest thing you could do. Then just wait for it to go up and sell when you hit a profit target you’re comfortable with. This is only for upward-trending stocks we’re long on.

For downward-trending stocks (those that we’re bearish on), you can short them. This is a little more advanced, so if you’re just getting started, I wouldn’t recommend this play. Remember, just like buying a stock, shorting comes with unlimited risk if the stock moves against you, so always have a clear stop-loss in place.
You could buy an option.

For bullish stocks, this means buying a call option.
For bearish stocks, this means buying a put option.

You know I’m not a fan of speculative plays, but every once in a while it doesn’t hurt to throw a little cash at a speculative option. Just remember, while options can move bigtime if the stock goes up… the downside of options is that you have a time limit on how quickly you need the stock to make that move.

So think about your risk tolerance when you consider buying calls on bullish stocks or buying puts on bearish stocks.
You could collect instant income.

If you’ve been following me for any length of time, you know that I’m a big fan of income plays, because they massively increase your odds of winning. We do this by SELLING options instead of buying them.

Not only do income plays let you get paid instantly — as soon as you place the trade. You massively increase your odds of winning, because the way we trade them, you don’t have to be 100% right about the direction of the stock.

If you haven’t tried your hand at income trading yet, I urge you to try this exercise for yourself. Without risking any money, it will really let you see the power of income trading and why it’s my favorite method.

Income plays on bullish stocks can be naked puts, covered calls or a bull put spread.

Income plays on bearish stocks will be a little more complicated. But if you’re a more advanced trader, you can look into doing a short term bear call spread, which involves selling an out-of-the-money call and buying a call one strike price higher.

That’s all for now.

Stay tuned, because I’ll be sending you a new list of TrendPoint Best Trending Stocks every week! (usually Mondays)