Weekly Raid #72 - The Grow your Wealth edition
Happy Wednesday Traders
GOOGL is the talk of the morning with a solid rev and bottom line beat, but a miss on their infrastructure sector sent share stumbling. You bet this will be on today’s watchlist.
News of the day
Today we have New Home Sales, Crude stock changes, and most importantly Powell is talking after the bell tonight.
The home sales number has some real potential, I think that the market is looking for any opportunity to see hope and rally. If we come in better than the (11%) decline expected then I think we could see a short-term rally. If sales slip below that number then it’s possible we see some additional selling pressure.
This is all on a smaller scale though, I still remain that rates and earnings are more important than news in this current cycle. As a result, Powell talking after the close could really get the markets moving. Of course, stocks and futures will be on after-hours trading so most of us in options won’t have a chance to trade.
Personal Finance/Wealth Creation
I would like to talk about some additional practical steps to take on Personal Finance/Wealth Creation.
This is kind of an amorphous topic that no one really tells you how to get going on. There are a lot of flashy courses and gurus out there, but not a lot of real value, so I would like to add some real value.
This breaks down into a few simple steps
Stability - This is where you are simply stable. You meet your bills, you can occasionally go out, and you don’t have a lot to spare but you are comfortable.
Additional Income - This is where you are either working overtime or have a side gig/second job. This is where a lot of people go awry. This additional income should only really be used in 1 of 2 ways. The first is to pay down debt, always use it to get to zero as fast as humanly possible. Shrinking your expenses means more money works for you than against you. The second is to start to grow your income.
Income Growth/Acceleration - This is where you take money from step 2 and start using it to grow additional income streams. You either pour it back into your side gig, or you start to expand and look for other low-time commitment opportunities. Since nothing is truly passive, you are looking for items where you can put in 1-2 hours a week and see exponential returns. Think Youtube, Amazon KDP, Dropshipping, and the like. The important part here is that you only use the money from the side gig to grow this. How long it takes and what the avenue is doesn’t matter. It’s just setting the stage for step 4.
Exponential Growth - The last stage in the cycle. Here you are seeing consistent returns from steps 2 and 3 and can start to really reinvest profits and make it grow faster and faster. This is where the real wealth is made because once you cross the 5-figure mark on profit you can moe than likely outsource any additional labor to make it more of an employee than an additional job. Now you take some of these profits (15-20% in my experience) and go back to step 3 and find another avenue to make additional income.
The whole point of this cycle is to get as many streams of income working for you as possible. Once you have a few different modes of making consistent money you can pick one to really scale. That is where the life-changing money exists, but you can’t get there if you aren’t profitable.
Back to the Markets, here is today’s watchlist.
GOOG/L you better believe is on the top of the list. I think this earnings miss is a solid buying opportunity in the long term. It’s a solid stock on fundamentals and right below price we have a ledge and a low-volume node. The game plan for me is to watch the open and look for some spreads to take it long if I like the action. Of course, if we open on the lows and just hang out there, that plan changes. We want to see some momentum buying come in.
The SPY is still sitting in a pretty precarious position if you ask me. I can see us going back to the 410/11 level pretty easily over the coming weeks. I flipped out of those calls yesterday for a small 35 %ish profit and will be looking today for a direction. I still think we continue to chop around until earnings are done.
Banks have been getting absolutely hammered this year and JPM is no different. I will be looking around the yearly POC at $138 for some potential support. Usually, these high-volume nodes just chop around before being a direction so it could be a while. If we don’t blow right through it then I will consider looking for a bounce with some put spreads.
As always trade well and Good Luck
As always this is all for educational purposes only. You are solely responsible for your trades as I am for mine. Nothing in here should be construed as financial advice, but only educational content about the markets and my particular trading style.