Transcription
In this video, I'm going to talk about the five stocks I'm buying now, especially after Jerome Powell's speech today. I believe we're in the early innings of a very long bull run. So, let's go ahead and jump into it.
Remember, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. Results may vary.
Now, let's take a look at the account. As you can see, we are near all-time highs in the account, especially after today. We're not quite recovered to all-time highs, but let's go ahead and look at the realized gain/loss to see how we did today. As you could see, if we go to today, all right, we did about a $1,400 profit on HOOD leaps today. And I'm going to walk you through exactly how I did that, but I'm not the only one doing it. As you can see here in my private mastermind, Options Trading University today, a lot of people posting their inspiration on those HOOD leaps, as you could see. Um, love it when clients are able to participate in these because, um, you know, these ones are definitely the more fun trades. So, that was wonderful for clients today posting their inspiration. If you do want access to my private mastermind, that'll be at the top of the description where I include my trades, Ryan's trades, and my leaps, entries, and exits. So, make sure to uh check that out at the top of the description.
Now, let's go ahead and jump into it. But remember, I do give away free trade ideas in my Instagram and my free newsletter, which are also both down in the description. So, um, as you can see, Powell indicated conditions may warrant interest rate cuts as Fed proceeds carefully.
Now, as you saw in my last update video, I didn't expect that um Jerome Powell would actually be this kind of dovish on interest rate cuts. I thought he was going to be more neutral and saying, "Hey, you know, um we'll see what the data says. If the data comes in to where we have to lower rates, we'll do it." But he kind of warranted, hey, you know, interest rate cuts may be on the way. And that drastically changed the CME Fed Watch tool. So, this tool right here is what I look at for interest rate cuts. And the reason why this is so important is because I'm bullish on the market. So, I want to make sure I'm getting into the right stocks at the right time. And when we have interest rate cuts, the market tends to go higher because businesses are able to borrow at cheaper rates and consumers are able to borrow at cheaper rates. Therefore, more liquidity going into businesses and then into the stock market.
So, as you can see, the rate cut odds for September went up from 73% all the way up to 83%. So, a 10-point jump. And usually when we see this above 55% going into a Fed rate decision meeting, 100% of the time there's been a rate cut if it's over 55%. So it looks like we're getting a rate cut in September. Um and then as you see there's more aggressive cuts coming being priced in in the futures market right here. Um half basis point cut here in October, potentially another in December, another next March, another next June. um and then another in next October and December. So it looks like rate cuts are potentially going to come in a lot more aggressively next year. Okay.
And I want to kind of line out what that means for the market. So if we look at the US interest rates, okay, the Fed, the Federal Funds Rate um if we look at a period where I remember the market um went much higher for quite a bit of time was during 2019 all the way to 2021. Okay? And basically uh December of 2018 right here, the Federal Reserve announced that they will start cutting rates. Okay? uh they did that rate cut in July 2019 and they did it uh you know multiple times over as you can see kind of the chart just going um downwards the Fed Funds Rate coming down and then right here obviously this was a special uh you know rate cut because of COVID, right? And then they brought the interest rates all the way down to a quarter basis point all the way down here and it stayed down here for quite some time. Now I want to show you kind of where we are in the cycle because now, you know, obviously, we've had a few rate cuts um later last year. Uh but we might get another, you know, um surge of cuts going into next year. So, I want to kind of show you what the market did during those times.
So, we're looking at QQQ. Okay. During that time, December 2018, when they announced that they were going to start cutting rates, okay, the market went up from here, December 2018 all the way to obviously the end of 2021, um when we had inflation starting and everything like that. Obviously, it's not going to be the same, but you know, usually history kind of rhymes. Okay, the market went up 183%. Now, I don't think we're going to get that drastic of a market increase because this was kind of a special time where um, you know, interest rates were near zero. All right, I don't think we're going to get down there, but it is being priced in on the CME Fed Watch tool that we might get down to 1.75 to two, okay, on the interest rate. So that could be somewhere around um yeah, around this area, which would put us kind of exactly where we were at um at the before, you know, the COVID crash happened. Okay, so right here, which the market was much higher. So, you know, I do expect that the market will um continue upwards. I think we're kind of in this range right here. We're kind of in these innings, um and I think we're going much higher, uh as you can see right here.
So, let's go ahead and switch this over to the daily time frame because we're on the weekly time frame and talk about what exactly happened. So, again, Jerome Powell, I already knew this was being priced in, this kind of little pullback that we had yesterday, yesterday and the day before. I said, you know what, we're probably pricing in a more neutral to bearish um type of signal from Jerome Powell. But he actually gave us a prize, right? And a lot of people, a lot of shorts got wiped out. So what that what happened is the market um had a big increase today, one and a half percent. Okay. And then the five stocks I'm going to talk about had an even bigger increase. So, um if we look at the VIX, you could see that the fear went from 17 right down to 14.21. So there's literally no fear in the markets right now. All right.
So this is the time where yes, we have to be a little bit more cautious because there's greed in the markets and fear is low. So, what I'm doing is I'm actually shoring up cash. I got a lot of shares called away. I'm going to have about 20 to 22% in cash on Monday, okay? Because I'm getting a lot of Amazon and American Express called away. But let's go ahead and go over the VIX cash allocation levels. So, as you can see right here, we're between VIX 12 and 15. This helps me manage my cash effectively because I don't want to have zero cash when the market crashes again. And this is what keeps me safe and keeps me um having dry powder on the side for opportunity when I could buy those dips and get massive increases on um my money. Okay, so right now technically I could be 40 to 80% cash. Obviously, I'm not going to be anywhere close to 80. That's way too aggressive, uh or way too conservative, rather. I have about I'm gonna have about 22% cash on Monday. So, I'm definitely still more aggressive and leaning more bullish as I do believe we are in the early innings of this bull cycle. Okay, so with that being said, let's go ahead and jump into the five stocks.
Now, the first stock that we saw the biggest gain today, okay, was SoFi, up 7.24%. All right. So, obviously, SoFi is going to benefit from rate cuts because we are at such a high interest rate that it's very hard to loan out money because people don't want to pay that high of interest. Okay? They won't be able to afford those payments, right? But now that the interest rates are coming down, SoFi specializes in refinancing student loans, refinancing mortgages, all that kind of stuff. So, they're going to be able to re help people refinance. they're going to be able to help people um get cheaper rates on personal loans and lend more money, therefore making more money in interest fees. Okay, so I do believe that um if you look at the projection, okay, uh my projection was that by, you know, sometime in October, December to December of this year, I think that SoFi can reach $30. I think we're on our way there. We pre we touched the previous all-time highs of $25.11. Okay. And uh it looks like we're kind of in this breakout zone where we're not even are overbought on the RSI. Okay. This is a tool that I use, an indicator, just to help me kind of um guesstimate where this stock could head, and we're not even overbought on the RSI like we have been in previous um months. And on the MACD, we are now forming a bullish crossover. So what that tells me is that, you know, there's a good probability that SoFi is headed much higher.
So how am I playing it? Well, let's go ahead and dive into the account. Now, remember, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. Results may vary. But if we take a look at the account, okay, uh SoFi position is pretty substantial. In fact, it's almost the largest position in the portfolio of 163K in cash secured puts. Um, you know, total premium collected is $5K for September, but uh we're going to probably be closing out most of this position next week and rolling it up to a higher strike and further out in time. So, I like to do cash secured puts on SoFi versus buying the stock because I'll show you why. Okay, so I could go to the options chain right now and next week I'll probably go out to September 26, 35 days out. It'll be like 33 days out at that time on Monday. And I'll go to the $23 strike cash secured put. Now, I'm going to collect $88 if I sell this one currently. Obviously, results vary based off of where the stock price is, but that's a 4.1% ROI. Results vary. Okay. In 33 days, that's pretty good. That meets my return profile, my return targets of 3 to 5% a month. Okay. So, um what I would do is I would sell that $23 uh strike cash secured put. Okay. And if the stock goes below, the risk is if the stock goes below $23 in 35 days, I'm going to be forced to buy 100 shares at $23. Even if the stock goes to $19. Okay. So that's the only downside. But it's not really a downside to me because I get the stock at a discount and I got paid to do it. I got paid to dollar cost average. So that's why I like this strategy. And if we look at it, okay, $23 is about right um right here. Okay, so from current prices, the stock would have to fall about uh 8%. So I'd be getting an 8% discount from all-time highs from current prices, and that's totally fine with me. There's a high probability that that won't happen. In fact, the probability of that happening is uh 28%. Okay, because it's a 28 delta cash secured put. So, I like that trade. That's the one I'm taking next week on SoFi in anticipation of it going much higher and also giving me a buffer just in case it doesn't go higher to grab the stock at a discount and then ride it up to all-time highs. Okay, so that is a wonderful play right there. SoFi, wonderful company, PE ratio 50, so not super super high. Um, and I believe they have much growth ahead of them. So, SoFi, again, the first stock and one of the favorites in the portfolio today.
So, the next stock is going to be American Express. Had a wonderful nice green candle today. Still below all-time highs, uh back at $329. Okay, so this is also a stock that I like playing because it's definitely more predictable. If you look at the long-term chart, you know, very upward trending, very steady and predictable, and I like that. I like that for the portfolio. Now, the premium premiums aren't as good in this stock, but I like to play it still with a cash secured put. So, um let's go to the position right now. Um again, we're not overbought on the RSI. I think this thing could break out above previous all-time highs. I think it could go to $340 in the short term. Okay. Um so, let's go to the portfolio and we're going to go to my AXP position. As you can see, my $310 covered calls, $315 covered calls, and $310 covered calls here. My 400 shares are basically going to get called away. It's $124,000 worth of shares that are going to get called away. Um, basically on Monday, these shares won't be in the portfolio. So, I'm going to have a lot of cash ready to deploy a new trade on AXP. So, what I'm going to do is I'm going to go to the options chain. I'm going to go out 35 days and I'm probably going to go to the 32 delta, which is a 1.6% ROI. Kind of low, right? Obviously, results will vary based on where the stock is on Monday, but still a decent return if you annualize that compounding monthly. Okay, so I'm okay with that. Um, it's a less aggressive stock and I feel safe uh at the $310 strike because that is actually where I had my previous shares. So, um, I'll probably I'll sell that, collect maybe $500 bucks, and be on my merry way with that stock in the portfolio, knowing that, you know, AXP is going to benefit from rate cuts as well. You know, the interest rates will be cheaper on credit cards, personal loans, that kind of stuff, and people will be more um, you know, open to travel and spending money because, you know, personal loan rates are lower, stock markets going higher, home prices are increasing again, right? That kind of stuff. So, uh AXP again, a wonderful stock for the wheel strategy to have in the portfolio. Um, I love this stock and it had a it was the second strongest stock today in my portfolio, uh behind SoFi. Okay, so let's go ahead and go into the third stock, Robinhood.
Wonderful bounce here. We played the leaps. We got in these leaps when the stock was at $105. We exited when the stock was at $110 for a nice 10% profit on those leaps. Okay. Um, quick play took a couple days. You know, that's typically how we do it. And what I like on this stock is actually the premium. So, um, it's kind of loading up. It's kind of coiling up this stock right now. And I think we could break out of this $115 area and head to new all-time highs. And I think that's what's uh loading up for Robinhood. Now, it may it may take a longer time. It may trade sideways for a couple more weeks before doing that. But I'm really liking um Robinhood at the current levels. It's definitely not overbought on the RSI. It's not oversold, but it's not overbought. Kind of right in the middle. Um, and MACD looks a little bearish right now. Kind of looking like it wants to cross over to being bullish.
So, let's go ahead and go to the portfolio and I'll show you kind of the current position and what I plan on doing. So, we have 155K in cash secured puts at the $105 level and the $95 level that I picked up on that dip. So, these ones are up 50% already. Um, but what I would do if I had to put on a new position next week, again, go out to the end of September, knowing that September is a more volatile month, and I would go to the either the 30 to 35 delta. So, if I went 30 delta, I'd probably go to the $101 strike. That's about a 5.2% ROI there in 35 days. Obviously, results not guaranteed. These prices fluctuate, but that's pretty, you know, that's that's substantial. Um, so I like that uh strike to be safe. Now, if I wanted to go more aggressive, I could go kind of where I'm at now at the $105s and pick up six 6.36% pick up $600 bucks um for that $105 strike. But again, results vary based off of where the stock is on Monday. These prices definitely could change and returns can change. All right, but I like anywhere between the $100 and $105 strike. Anywhere in there long-term, I think um I would be fine getting assigned there. So, that's going to be Robinhood. Again, no real news around Robinhood other than, you know, they might get added into the S&P 500 pretty soon here. So, you know, that could be a big catalyst.
Now, let's go to the fourth stock, which is Palantir. I believe this is kind of one of the most beat-up stocks from this pullback um relative to where it was at at all-time highs. I mean, we're still down 16%. And I do believe that Palantir will be a $200 stock. So, with that being said, you know, let's kind of see how we could play this. Um, not quite oversold on the RSI, but definitely not even near being overbought. Kind of a big pullback here. Maybe another day of uh another week potentially of just like sideways consolidation before heading higher. But let's go ahead and look at the portfolio and see how we're playing it. So, uh as you can see, 131K in cash secured puts and I also do have a LEAPS call option that is, um, down 5%. So, I got these a little bit too early because I got them when Palantir was around $161. It's at $159, but it went further. It went down to like $140 something. Okay. So, didn't get the perfect entry, but I have 511 days to be right. So, we'll probably exit these at 10%. I already have a uh sell order here for once we're up 10% on those. Okay, so that's uh another additional $32K position there. But if I had to put on some new puts, okay, I already have some new ones right here, the $152.50s. I would go out 35 days, okay? And I would go to the 30 delta. Just keep it nice and simple right here, the $149 strike, collect $565 bucks, which is a 4% ROI. Results vary based off of where the price is at on Monday, but I like that um return profile there. Okay, so that is exactly what I would do. I do the $149 strike and worst case scenario, the risk is if the stock goes below $149, I will have to buy 100 shares at $149. Okay, so Palantir, great earnings, um solid fundamentals, nothing has changed, just a little pullback here, and long-term, I do think it's a $200 stock.
Now, let's go ahead and go to the last stock. Okay, this is Nvidia. We have earnings on Wednesday. Nice little uh breakout break below the lower Bollinger Band for a bounce. That was great. A great entry for, you know, anyone that wants this stock long-term. Um, and there's still opportunity here. So, I do think that the earnings are going to be fantastic. So, if we go to the portfolio, you'll see that I'm playing pretty a pretty heavy position for earnings. I have about um eight cash secured puts for earnings at the $170 strike, $168K worth of cash secured puts. So, uh if I wanted to play earnings, I would go out 7 days and I'd go to Yeah, I'd probably go to the $170 again. Uh maybe even the $172.50 and pick up one to two 1.7 to 2.2% ROI. Results vary based off of where the stock is on Monday. But, you know, in seven days, that seems like um a decent play for me. So, uh yeah, I would do either one of those. I feel safe getting assigned there. But if I wanted to do something more long-term to avoid the earnings, um maybe I wait till after earnings and then I go, or I just say, "Hey, I'm willing to just collect a little bit more premium." I would go to September 26 and just go out to the um the $165 or the $170 strike. Okay. So, those those two are good as well. The returns are lower than earnings week because obviously earnings week has more implied volatility built into the options. So, they're more expensive, and that's better for options sellers.
So, that is going to be the five stocks I'm really loading up on. Um, I hope you enjoyed this video and I'll see you in the next one. Be sure to give it a thumbs up. I really appreciate you being here and take.