Dear Student,
What a week!
On Monday, I showed you how the market shook off a weekend full of chaos—and why I still believe this summer could deliver a breakout in three key assets.
Then, on Wednesday, I walked you through Tesla’s quiet robotaxi launch in Austin… why this move could upend the gig economy… and how I’m trading it before the markets catch up.
But the other big news of the week? I turned 59. And to celebrate, my wife is kidnapping me for a little off-the-grid R&R.
So, before taking off to soak up some sun (and maybe dodge a few scattered storms), I wanted to answer three questions that came into the Patterns & Profits Mailbag over the past few days.
Let’s get started…
Q: Tom, the news out of the Middle East has been chaotic. But markets are rallying. What’s driving this?
You’re right—tensions in the Middle East haven’t exactly disappeared. But the sense that Iran’s been put in check (at least for now), plus the potential for a ceasefire, has helped calm some of the market’s nerves. It’s not a done deal, of course—that’s still up to Israel and Iran—but perception alone can shift sentiment.
And right now, that sentiment has tilted bullish again. We’re seeing upside momentum return—and I’ve got my team laser-focused on one particular corner of the market that’s been heating up: exchange-traded funds (ETFs).
Q: I see alerts from you for both stocks and ETFs. Is there any distinction between the two? Should I be prioritizing one over the other?
Great question! The main difference comes down to my profit target.
When I trade options on individual stocks, I’m typically aiming for a 100% return. But with ETFs—especially ones that aren’t the big names like SPY or QQQ—the average price move tends to be smaller. That’s why I set a lower profit goal for those trades: around 50% ROI.
The setup and the seasonal pattern might be the same, but the instrument changes the target. That’s just part of knowing your tools—and how to make the most of them.
(Use this special discount to get access to the #1 strategy beating the markets this year)
Q: What’s the benefit of trading exchange-traded funds (ETFs) versus individual stocks?
This is one I hear a lot—and it’s a good one. ETFs come with a couple of big advantages:
1. Diversification – With just one ETF, you’re often tapping into a basket of dozens (sometimes hundreds) of companies. That reduces the impact of any single earnings miss or news drop. If one stock inside the ETF tanks, others can help absorb the shock.
2. Less Research – You don’t need to dig into individual balance sheets or earnings calendars. ETFs are typically built around broader sectors or themes—like tech, healthcare, or energy. I like to call it “trading the haystack, not the needle.”
It’s a more efficient way to get exposure—and when the setup is right, it can still deliver solid returns.
Q: Tom, what do you think the best ETF is?
Here’s the thing… “Best” is always subjective. The right ETF depends on your personal goals, risk tolerance, and what your broker or advisor thinks fits your strategy.
That said, I can tell you my favorite… I really like SPDR S&P 500 ETF (SPY).
It’s the most popular ETF out there—massive volume, high liquidity, and extremely tight bid/ask spreads on the options. That liquidity gives you an edge when it comes to entering and exiting positions quickly and cleanly.
It’s also why, when SPY shows up in my Money Calendar scans, it jumps straight to the top of my list. As Michael Saylor would say: “There is no second best.”
Have a great weekend!
Talk soon…
Tom Gentile
America’s Pattern Trader
