Over the past week, I’ve shown you the ins and outs of the Money Calendar and how I’m going to use it to book profits on the upcoming AI bust.
I’ve shown you how this simple calendar I created can turn short-term market patterns into low-risk profit opportunities.
And in today’s Q&A session, I want to focus specifically on the questions you and your fellow Patterns & Profits readers have sent me about the Money Calendar.
Remember, you can ask me a question right here at any time, too. Just keep in mind that I can’t give personalized investment advice – so save that for your broker or financial professional.
Now let’s jump in…
Q: Tom, you said you’re not expecting AI stocks to crash anytime soon and that there’s more upside potential. But aren’t AI stocks like Nvidia already too expensive?
A: Listen, as a short-term trader, I don’t really pay much attention to valuation. But if you compare today’s valuation with what happened during the dot-com boom, AI stocks are not crazy expensive – yet.
The entire Nasdaq could double from here… And we would still not reach the crazy valuation we saw at the peak of the internet frenzy in 2000.
I’m actually expecting things to get a lot crazier in this last phase of the AI boom. For example, back in the late 1990s, we had a huge IPO boom around internet stocks. Companies with zero profits were just slapping “.com” at the end of their names, going public, and watching their stocks skyrocket.
But last year, we only had 154 IPOs on the U.S. stock market – a 15% drop compared to the previous year. That’s nothing compared to what we saw in the internet frenzy in 1999 and 2000 when more than 600 companies went public. And most of those companies going public were not even profitable.
So, this AI boom is far from over.
Q: How does the Money Calendar work with unexpected market events, like Covid, for example? Are the patterns still reliable?
A: There will always be an unexpected news story, economic event, or geopolitical unrest that could shake up the markets at any time. My engineers and I factored and built this into the Money Calendar based on over 10 years of historical analysis. And while the seasonal calendar has no guarantees of future accuracy (like anything else), I look at it in the same way I look at the seasonality of weather patterns… Summer is typically hot; winter is typically cold. That doesn’t mean we won’t have a cold summer or warm winter some years… but the overall patterns are the same. It’s all about consistency – that’s what matters to me.
Q: “Tom, do you have a patent on this calendar software?”
A: This may be surprising – but absolutely NOT! And here’s why… When you file a patent, you have to give the patent officer all the details behind your system. And I don’t know about you, but I don’t trust the U.S. government with that kind of information.
Think about it… ANYONE could hack their system and steal my secret code. And I’ve invested too many resources into this system.
I spent decades building it… I invested a lot of money developing it… Heck, last year alone, I spent more than half a million dollars just on data. I even hired a couple of computer geniuses to help me run it.
So, I can’t risk having others just steal my secret. That’s why it’s not patented.
Q: “What happens when a trade doesn’t work out? What’s the risk in each trade?”
A: Listen, if anyone ever tries to tell you that they have a trading system that works 100% of the time – RUN! And run fast!
There’s no holy grail in the investment world. Anyone who tells you otherwise, to be frank, is lying to you.
The Money Calendar gives us an edge in the market… But it’s not perfect. That simply doesn’t exist. Not all trades will be winners. But our track record shows that we’ve had a lot more winners than losers over the years on trades like these…
And I’m not cherry picking, either.
Including all the winners and losers, my Money Calendar trades have beaten the market in most years. That’s only possible because we pay very close attention to risk management. And when you’re using my options strategy, the maximum you have at risk is your initial capital.
But the moment I see the trade is not working out, I send my readers an alert telling them to close the trade to cut our losses short. And, thanks to the Money Calendar, we’re already reducing the risk because we’re only trading stocks that have gone up in at least 9 of the last 10 years.
So, we have history on our side.
And that brings me to the final – and top – question I received this week…
Q: Tom, you’re predicting a market crash… How will the Money Calendar help when stocks are going down?
A: That’s the beauty of the Money Calendar. You’ve heard me talk a lot about these short-term profit cycles on stocks that have gone up at least 90% of the time over the last years… But it doesn’t just work on stocks that move higher. Just like some stocks tend to rise almost every year during certain periods… Other stocks tend to drop almost every year during certain periods.
The Money Calendar also flags those periods of weakness. It not only shows these 30-day profit cycles – but also 30-day bust cycles, when stocks tend to crash. So, we can use those dates to either avoid those stocks… or even profit from their drops.
Here’s an example of a short-term bust cycle…
On February 21st, the Money Calendar flagged a short-term bust cycle on Synaptics Incorporated (SYNA):
Remember, green days tell us that the Money Calendar sees more bullish stock patterns. Yellow days mean we’re looking at a mix of bullish and bearish patterns. Orange days mean the majority of patterns are bearish. And on red days, the patterns are overwhelmingly bearish.
So, the Money Calendar saw more bearish stock patterns than bullish ones on February 21st. And, as you can see is this graph below, SYNA went DOWN in 9 out of the last 10 years between February 21st and April 2nd:
That’s a 90% success rate on this pattern, which meant there was a high likelihood of this pattern repeating itself again this year.
And that’s exactly what happened.
The stock started a major correction, with shares dropping as much as 22% in the following weeks. But while “buy and hold” investors were losing money; anyone who knew about this Money Calendar pattern – and the exact dates to buy and sell SYNA – could have used my strategy and turned $5,000 into $7,800 in a little over a month.
That’s what separates the Money Calendar from any other seasonal analysis software out there.
Think of how much money you could make if you had a way to crunch hundreds of thousands of data points on a stock… to reveal it has a track record of moving a certain number of points… AND the number of days that expected run is likely to take place.
I have it.
And on Monday, July 15th, I’m releasing my next recommendation on a stock that has gone up in 9 of the last 10 years between July 15th and August 22nd.
Click here to get the details…
Have a great weekend!
Tom Gentile
America’s Pattern Trader