🧪 $10K to $1.1M

Good Morning!

After an eight-day winning streak, stocks took a breather as attention shifts to Fed Chair Powell’s upcoming Jackson Hole speech.

Plus, don’t miss our deep dive into Larry Williams’ million-dollar strategy and the latest on navigating the S&P 500's uncertain outlook.

Let’s get into it 👇

🌡 Market Temperature Check

➡️ Stock market snaps 8-day winning streak
Markets paused their upward momentum on Tuesday, ending the longest rally of the year, as attention turns to Fed Chair Powell's upcoming Jackson Hole speech. The S&P 500 slipped 0.2%, breaking its eight-day winning streak, the longest since November. The Dow Jones dipped about 0.2%, while the Nasdaq Composite dropped 0.3%, reflecting cautious sentiment across the board.

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🚨 Did you miss this?

The Strategy That Made Him $1.1 Million In 12 Months

Last year I uploaded a video on Larry Williams, ever heard of him?

He’s the legendary trader who turned $10,000 into a whopping $1.1 million in just a year. That’s an insane 11,300% return! Naturally, I got curious and dived deep into his trading strategy to uncover the secret sauce behind those massive gains.

In this video, I break down Larry’s exact strategy—the LW Volatility Breakout. It’s centered around the Donchian Channels indicator, and with a few tweaks and some clever confirmations, this strategy really shines.

I will walk you through how to set it up, what to watch out for, and even share a secret trick to make the strategy even better.

If you missed the video, check it out below 👇️ 

📰 Is the S&P500 still a safe bet?

The S&P 500 has been on an impressive run since October 2022, with the Vanguard S&P 500 ETF soaring by 56.6%. This bull market has been driven by attractive valuations following Federal Reserve rate hikes, strong corporate earnings, and excitement around AI advancements.

However, this rally hasn’t come without concerns. The S&P 500’s cyclically adjusted price-to-earnings (CAPE) ratio is now at 36, more than double its historical average, sparking fears of an overheated market. Additionally, recent economic data shows a slowdown in consumer spending and a rise in unemployment, adding uncertainty to the outlook.

Given these mixed signals, you might be wondering how to approach your S&P 500 ETF strategy. Here are three possible approaches:

1. Increase Your Investments
If you’re optimistic about AI’s potential, consider boosting your regular ETF purchases. This strategy bets on AI breakthroughs driving future growth, which could justify today’s high valuations. But be cautious—if AI underdelivers, you could be overexposed to a frothy market.

2. Maintain Your Current Strategy
Stick to dollar-cost averaging, a tried-and-true method that spreads your investments over time. This balanced approach helps you stay invested without worrying about market timing, making it ideal for navigating uncertainty.

3. Decrease Buying and Build Cash Reserves
If you’re concerned about a market correction, reducing your ETF purchases to build cash reserves might be wise. This strategy positions you to buy at lower prices if the market drops, but it risks missing out if the rally continues.

Ultimately, your strategy should align with your risk tolerance and investment goals. While the market’s direction is uncertain, a disciplined, long-term approach remains the most reliable path to success.

‘til next time,

TradingLab