Last week’s 7-Figure Trader event with Ken Trester was an overwhelming success … So today, we provide even more details about his market approach
What would you do with an extra $5,000 to $7,000 per month?
Pay off some bills or loans? A vacation? Help your kids with tuition expenses?
For the majority of us, that kind of extra cash flow would make a noticeable difference in our financial comfort level.
It turns out an extra $5,000 to $7,000 per month is what Bill from Wichita has been generating using a market approach from veteran trader, Ken Trester.
It doesn’t require leverage, or outsized risk, or buying highly-volatile stocks. In fact, it can actually be a safer approach than buying stocks outright — and yet it can consistently generate big streams of cash flow.
Last Wednesday evening, Ken held a special event called the 7-Figure Trader that walked attendees through his strategy. The feedback has been overwhelmingly positive.
We weren’t surprised. After all, we’re in a strange market today. Whether you’re bull or bear, you’re able to find solid evidence that supports your position … or contradicts it. And that can make committing to a particular belief about today’s market stressful.
This is, in part, why Ken’s strategy is so popular — it’s engineered to generate cash regardless of whether the market is rising or falling. It’s a flexible tool that investors can adapt, even if they don’t nail the direction of the broad market perfectly.
Ken’s subscribers are already aware of this, but perhaps you’re less familiar with Ken. For greater context, he’s one of InvestorPlace’s most respected technical analysts. Ken’s been a stock market trader for over 40 years, having started out as a floor trader on the Chicago Board of Options Exchange.
In his decades spent as a trader, he’s seen all sorts of market approaches, but there was one that always stood out as unique — that’s because, as we mentioned above, it doesn’t require huge risks. Instead, it’s designed to safely and consistently generate cash-flow. This is the strategy Ken discussed in detail last week during his 7-Figure Trader event.
Given the positive feedback from the evening, as well as the awareness that many readers weren’t able to attend, we decide to feature Ken once again in today’s Digest. Only, this time, we’re going to go into even more detail.
That’s because Ken gave us permission to walk through his market update for paid subscribers that came out this past Friday. It’s an in-depth analysis of what’s happening in the market today, and what trades that’s pointing toward.
So, in this Digest, let’s evaluate the markets through Ken’s eyes, then revisit how he’s able to generate cash regardless of which direction the broad market is moving.
***Climbing the “wall of worry”
Ken begins his analysis by evaluating the big picture. Even though his approach doesn’t require the markets to be moving a certain way, having an idea about the prevailing market direction helps Ken identify appropriate trades.
With this in mind, Ken begins by looking at the S&P. From his update this past Friday:
I told you last Friday (9/6) that my indicators were giving very strong buy signals, and the S&P 500 is up about 1% since then. Well, they are now giving even stronger buy signals — nearly to the point of being overbought.
At the same time, the S&P is once again only a few points away from its prior all-time highs. So, it’s likely that strong resistance will come into play soon.
Daily Chart of the S&P 500 Index (SPX) — Chart Source: TradingView
As you can see in the chart above, the index has had a nice run since it broke above the top of its August trading range. But its relative strength index (RSI) indicator, in the bottom panel of the chart, is getting up into overbought territory.
Notice the lower pane, where Ken has circled the current, elevated RSI reading.
At this point, Ken pauses to help readers understand and contextualize the significance of the relative strength indicator (RSI). He explains how traders often use indicators such as the RSI to determine whether a stock or index is in “overbought” or “oversold” territory. Typically, an RSI reading above 70 tells traders that an asset is overbought, or overvalued, while a reading below 30 tells traders that an asset is oversold, or undervalued.
So, what exactly is the S&P’s RSI telling us about the market at this moment?
Back to Ken:
Right now, the RSI reading for the S&P is sitting around the 62 level. That’s not as high as the 70+ readings we saw before the May and August declines, but it’s getting close. So, while there is still room to run, we could see a bit of a pause before new all-time highs.
***This market setup points readers back to two of Ken’s trading rules …
To be an effective trader, it requires discipline and adherence to the rules of your system. Ken’s approach is no different. He reminds his readers of this …
Now is a good time to recall my two main trading rules: Don’t fight the Fed (or any central bank), and don’t fight the tape (meaning the action in the market).
Ken walks readers through today’s market in light of these two rules. Specifically, he discusses the prevailing sentiment of the various central banks, as well as the direction of various asset classes.
For example, last week saw bullish news from the Fed’s European equivalent, the European Central Bank (ECB). It announced a new bond-buying program that is aimed at stimulating the eurozone economy. Then there’s the widely-held expectation that the Fed will lower rates here in the U.S. by a quarter-point this week. This also is generally bullish for stocks.
Ken then discusses action in the markets, notably, bond direction (he expects a reversal in bond yields), precious metals, and the strength of the dollar.
So, putting it all together before diving into specific trades, what’s Ken’s big-picture view of the markets today?
… the market continues to climb the “wall of worry,” as the saying goes. While we have gotten some bullish news from central banks, the situation with China is still no closer to being resolved, despite a two-week tariff delay.
The technicals are also pointing to a potential pause or pullback, however, I do not plan to fight the central banks or the tape. I’ve added three new bullish trades capture the remaining upside in the market and one bearish trade as protection.
***At this point, what trades is Ken making, and how does he design them?
Ken points his subscribers toward a bullish trade on the gaming company, Activision Blizzard. Then there’s a bullish trade on silver, using the iShares Silver ETF, SLV. There’s also a bullish trade on oil, using Occidental Petroleum (OXY). Finally, there’s a bearish trade on the industrial sector, using XLI, which is the Industrial Select Sector SPDR Fund.
Now, for any readers who missed our Digest last Wednesday that discussed Ken’s trades, let’s briefly revisit the essence of what they are, and how they’re constructed.
From Ken (a hypothetical):
(Some stock market gamblers) want to make a bet that Facebook is heading to $155 over the next few weeks. And they are willing to pay me $840, right now, to help them make that bet …
But according to my data these speculators are crazy.
Facebook is sitting at about $185 right now. The chances of Facebook dropping that far over the next few weeks is virtually nonexistent.
I mean, even with all the scandals surrounding privacy issues … Facebook’s daily user base is still up 20% over the past two years in the U.S. and Canada … and up over 30% in Asia.
That doesn’t sound like a company that’s on the verge of a breakdown.
Ken then describes how he makes the trade in his brokerage account. It’s simple, only takes a matter of seconds, and results in that $840 “bet” being transferred into Ken’s account.
Back to Ken:
That’s money I get to keep no matter what happens with the stock. If Facebook goes nowhere over the next month … I keep the $840.
If Facebook’s share price rises … I get to keep the $840.
Even if the guy catches a lucky break … and Facebook drops to $155 … I still get to keep the $840.
Just like the big banks, I get to make money no matter what happens in the stock market …
Without ever having to touch a single share of stock upfront.
***If you missed last Wednesday’s event, we’re making the playback available for a limited time
In it, you’ll see Ken walk through his strategy in greater detail. How do you find these trades? What’s the right way to evaluate a good trade from a bad trade? How much money do you need to get started? What are the risks involved?
Just click here to access the event playback for these answers and more. But please note we’ll be taking it down after tomorrow evening, so we encourage you to watch it as soon as you’re able.
Wrapping up, what’s your take on where the market is going? Are we going to surge to new record highs? Or do the recent wobbles suggest a major correction is lurking out in the weeks/months ahead? What if the answer didn’t matter all that much, since you had a market approach enabling you to generate cash either way?
Have a good evening,