So tell us a little bit about the strategy of WRTH.

Thanks, Nicole.

Sure.

So I think what separates this from any existing ETF is that we never own stocks.

We're not short.

We're not long.

All money is held as collateral against the business of selling strangles.

You just need some of that volatility, I guess.

When you look at this market from a technical perspective, as we're again, you know, getting back to flirting around record highs, et cetera, more upside potential than downside to you at this point? Or that's not the way you look at things?

Yeah.

So let's, let's talk about the market.

The market is dead flat.

In fact, we ha-- are the same level we were on May 5th.

It's now July 30.

That's 11 and a half, almost 12 weeks of dead flat.

Are there sectors and industries that you particularly favor right now that your analysis on studying shares says, "This is particularly where I want to be"?

So when, uh, tell us when you open a chart, what are the first three or four things you look at? What stands out to you immediately?

You know, the, the key to, uh, that is that it is a first impression, and then the way you've articulated, when you first open a chart.

The longer you're staring at it, uh, less useful it's going to be.

It's very much like Rorschach cards.

Your first impression, just as when you first take a bite of a meal you've ordered or first meet a person, uh, first impressions are very, very important.

They're exceedingly important in, in the world of studying, uh, prices.

And so the first thing, of course, is that one either accepts or does not accept the concept that there's wisdom in price, in collective judgment.

Why did you decide to launch this ETF?

How do you think about the dominance of technology going into Q3? How much of a narrative is that versus our ability to kind of detect good charts in other sectors, which they're there, I think, right?

Oh, there's so many.

There's always individual plays, right? Whether it's to be overweight or underweight, to be long or short based on price action and good setups.

But the tick sector is bifurcated, right? And bifurcation is a bit fragile, right? You have steep, uncorrected names.

Those are all the names we know.

And they can quickly come up with Western Digital.

It was 800 in four or five days.

What's the structure of that ETF? What are you trying to accomplish with it?

Carter?

You bet.

I mean, obviously many ways to look at this.

Been a great area of the market, uh, year to date, of course past one year, but it's still an area that's playing catch-up to itself and to the market on a longer term basis.

Let's go to some charts and try to figure it out together.

First chart, uh, basically a two-year chart.

Talk about a orderly uptrend.

So could you walk us through that strategy in plain English for the advisors that are watching this?

Right.

So...

If you look at options, who buys an option, right? And who buys an out-of-the-money option, which is what we're trafficking in.

So let's, for hypothetical, take a $100 stock.

What we do is, rather than buying options, we are selling them.

We are selling both the calls, let's say the 110 calls on that $100 stock, and we're selling the 90 puts on that $100 stock.

So how do you guys manage that tail risk?

I mean,

yeah.

I got maybe 101.

Anyway, let's just get right to it.

So we've created an equal weight basket of the six biggest memory stocks, the names that everyone knows, SanDisk, Micron, of course, Samsung, and so forth.

Now let's plot these as a basket.

So if you look at the next slide, screen or slide here, this is the chart of those six.

But I'm wondering if that chart for some reason looks any worse, if there's any sort of differentiation between these charts.

Carter.

Sure.

Let's get right to it.

I got four charts.

As always, same timeframe and we just look at them different ways.

First, of four iterations, what you'll see, of course, is a stock that's had a real, uh, boom and bust, uh, since it...

Interestingly, we're exactly two years.

But, um-

[whooshing] Carter, where do you see the group now?

Well, obviously, this is the center of the storm, both on the way up, and you wouldn't call that a storm, and on the way down.

It's, uh, where all the money is.

It's where all the hopes and dreams are, and, uh, it's been great, but the crack, I think, is real.

Let's look at some charts and try to divine the way forward together.

Here is the SOXX index with no lines, no judgments.

Let's put some lines in.

Carter Braxton Worth-

What made you think about doing strangles as your choice and how does that all work when it comes to the individual stocks that you pick?

Yeah.

So, The options, and you know this as an active participant and a longtime user of options, there's so many ways to make use of, and it's not necessarily leverage, right? Some people are buying options for insurance, right, as we know, and so forth for hedging.

But the one thing that is known to all, certainly anyone who goes out for the very first time and says, I think I'll try to buy this option slightly out of the money before earnings.

And if it works right, I'll get paid a 10 bagger.

And everyone's been down that path at some point because that is so very appealing, a small amount of capital to make a very large percentage gain, often a multiple, right? But what that is essentially is committing, again, a small amount of money for a very low probability outcome which is to say that that doesn't usually work and so the statistics around um short term that means front contract 20 day or less out of the money options are very clear essentially 70 70% plus minus expire worthless.

We all know this, and that's where this begins.

And

What, what, what's your, what's your view?

Well, but let's talk about it 'cause I think it's important.

So here there's the Mar- drops 84%, right? Okay.

So I'm just gonna tighten this up one more time and then let's talk about it.

And because it's the, it's the biggest subject in the room, right? And I thought, wanna talk about macro, talk about the market, this is it.

Let's just hold aside the charts for a second and I'll just, um, for fun.

It's, it's used to be, isn't it true this was...

Yeah.

What's he seeing in this trade? Carter?

Carter?Yeah, not so much interested in software here, but I certainly think that the semis are full.

I mean, very hard to know when something has run its course, when it's extended parabolic, but, uh, let's look at some charts.

I, myself, uh, want nothing to do with it at this point.

Uh, this is the SOXX index going back, uh, to '07.

Let's annotate this a bit and put in some lines and arrows and other things.

We're at the top of a channel that's been in effect, uh, since, uh, the '07 peak.

Christina, what's the latest?

What, what, what's your, what's your view?

Well, but let's talk about it, 'cause I think it's important.

So here there's the Marla, drops 84%, right? Okay.

So I'm just gonna tighten this up one more time, and then let's talk about it.

And because it's the, it's the biggest subject in the room, right? And I thought, wanna talk about macro, talk about the market, this is it.

But let's just hold aside the charts for a second and I'll just, um, for fun.

It's, it's used to be, isn't it true this was...

Right, yeah.

Carter Braxton Worth, what do you see in the charts?

Well, it certainly helped your acronym.

Um, but, uh, let's get right to it.

Uh, five, six charts, they're always identical.

That's the plan, and then we put things on them.

So the first chart, if you'll see here, is Agnico Eagle, a great winner.

I mean, going from 45 to 255 in a beautiful ascent on exactly a two-year period.

Mm-hmm

So you're sort of packaging both things that have been trendy and people have had more interest in ETFs and options, right? I mean, what are folks saying about the options trade? They're becoming more interested in how they work right

i mean as finance forever gets more sophisticated and participants become more aware of history and therefore how to avoid mistakes and or to learn from them the options market has exploded and the objective for wrth is to take advantage of a statistical circumstance that is known to all that basically short-term options are very speculative right they have very little time left until they expire typically front month 20 days or less and decay is a serious problem for the buyer of those options basically 70 percent 70 percent of all short-term out of the money options expire worthless and if you add some overlays like Don't ever do biotechnology.

Don't do very small cap stocks.

And if you sell out of the money options, hauls and puts, it's known as a strangle.

And if you do it when it's 10% out of the money or more on either side of the prevailing price, and then in turn you do it only after the stock has reported earnings, so that you've removed earnings risk, you put the odds increasingly on your side to be a seller of options, not a buyer.

And it doesn't mean that the markets have to go up or have to go down, right? I mean, right.

Right.

And so if you think about what happens, and we see it every day, think about a big earnings day when a big semi gaps up on its earnings.

Hi, Carter.

Hi there.

Let's get right to it.

So this is a follow-up report from a grains report done on Sunday night, and we thought we'd do ADM.

Uh, five charts, let's get to it.

We know the stock was basically 30 bucks COVID low, went to 100, gave it almost all back, hit 40, and has been turning ever since.

Let's look at the next chart and put some annotations in.

The fund, it, it's a unique approach here, so how does it work?

Why don't you go through?

Sure, let's do it.

We got three sectors to look at, but starting with financials.

So what we know, of course, is this drops more than the market on the sell-off, about 15%, and then it rallies more than the market, about 11, 12.

But the problem is, I mean, less than the market.

We're right up against a declining 150-day moving average, and that's a tough spot.

So to my eye, that's a fade it, a rally to a difficult level.

So what do you think?

I'm talking about what's gone on for the last nine months.

I think, Tim, that, that if you think of inflation, that, yeah, we had some moderation over the last sort of year up until I guess now, right, where, where we're gonna see the data change.

But within that, the expectations of inflation have never normalized the way the actual inflation did.

And that's really key because people continue to think that inflation's gonna be at least 3, 4, 5% in the future as opposed to where headline inflation was, was ending around 2.5%.

So that's clearly a, a, a difference.

And if you take this energy shock and people read about it, then they'll also think about actually higher gasoline prices.

It's only gonna go higher from here, not lower.

What do the charts say?

Why now are you making this call to lighten up and sell?

Yeah, I mean, I think, look, not all, uh, breakout moments, potential for a real rerating to the upside happen, but when they do, I think it's right to harvest, and so that is the thinking here.

It's an epic move.

Uh, the S&P 500 energy sector, of course, is up 14 weeks in a row.

It's never happened.

Uh, up some 40% in a matter of, uh, three, uh, uh, three months.

And at this point, we think it's discounting all or all that's knowable about the prospective upside.

What exactly could we see in the coming weeks?

Carter, what are you seeing?

Let's get right to it.

We can look at the charts.

We know this is a small sector.

It's 4.2% of the S&P, up from 3 though, of course, uh, before this got going.

But we're gonna look at the XLE.

This is, of course, an ETF that mirrors the S&P 500, uh, energy sector itself.

Mm

... that, that, that hedging was kind of already in place.

Owning VIX here, you know, 23, it's a little tough.

It looks a little bit ...

It's, it's expensive relative to how the market's behaving.

It's probably a little cheap [laughs] if you expect tail risk.

So I think you have to have a good amount of conviction that you're gonna get, you know, another pullback here.

Carter, what do you see?

So if you're J.P. Morgan, and you get swept up in this, is this a buying opportunity for investors of a couple of franchises that might be much less affected by all of these crosswinds?

Well, that's always the right opportunity in any marketplace if someone has fallen badly, to be scooped up by another if their franchise is still a good one.

But I, I think the important thing is it's obviously the second-biggest sector by weight, at about 12 and a half percent, and it's the lifeblood of the economy, right? The banks are the transmission mechanism of the economy, and weakness here is not something that's welcomed.

And again, it's broad-based.

In fact, if you were to look at the equal weight S&P 500 financial sector compared to the actual weight, where Berkshire and J.P. Morgan are, are about a third, it's, uh, equally dodgy at the equal weight level.

So I, I think it's a theme that is real, and while there are, uh, you know, certain regional banks are performing well, and certain insurers, like Travelers and HIG, uh, doing very well, or Chubb, the, the- in its totality, this very important sector, the weakness yesterday was weakness that's been going on for a while, it's just accelerating.

We're both looking at the same charts and coming up with two completely different conclusions.

Yeah, I mean, that's what makes buyers and sellers.

Like P&G or J&J.

Exactly, Colgate or Clorox or a General Mills cereal or that sort of thing.

Healthcare is relatively new.

We don't have healthcare companies that are old like that.

150 years ago, healthcare was, "Okay, bite on this stick 'cause we're about to saw your leg off.

We don't have anything else to offer you." Point being, they're w- they're not defensive, pharmaceuticals, the way soap and cereal is defensive.

Classic staples.

It could be anything that we talked about today around technical, fundamental analysis, whether to buy, how to react to the news, anything.