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TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.
The Midday Bell recently sat down with Peter Schultz, founder of Wealthbuilder Publishing, to discuss market direction, trading strategies, and his top stock picks for the months ahead. Since launching his trading company in 1999, Schultz has dedicated himself to helping traders achieve financial freedom. Speaking from his five-acre farm in Oregon, he shared both a macro view of the current market and practical setups that traders can act on now.
From Real Estate Roots to Stock Market Mastery
Peter Schultz’s fascination with markets began when he realized that, while real estate has produced many millionaires, the stock market is where billionaires are made. Whether through launching a successful tech startup or becoming a legendary investor like Warren Buffett, Schultz recognized early on that even a small share of the wealth circulating in equities could be life-changing.
However, his path wasn’t without challenges. “The market can be a humbling experience,” Schultz says, recalling his early lessons in trading. Over time, he developed a strategy focused on high-probability option trades that deliver consistent returns.
The Market Right Now: Peak Season for Earnings
Schultz believes we’re at a pivotal moment in the market. This week marks the most active stretch of Q2 earnings season, with 37% of S&P 500 companies reporting. Tech giants like Meta and Microsoft have already impressed, with Amazon and Apple results on deck.
Despite the bullish headlines, Schultz sees signs of a potential short-term market peak. He points to patterns where stocks gap higher at the open but fail to hold gains—often a sign that institutional traders are selling into strength. “I think the turn could start next week, maybe even at the end of this one,” he notes.
Why Tech Has Been the Engine
The “Magnificent Seven” tech stocks now make up 38% of the S&P 500, collectively outperforming the other 493 companies. Since the April lows, the index has surged roughly 42%. Schultz attributes much of this to momentum-driven program trading, especially in AI-related names—momentum that can just as easily reverse.
Trading in a Bullish Market: Setting Up for Shorts
Shorting in an uptrend can be risky, so Schultz focuses on stocks that have already reported earnings and are trending lower. Among his top bearish plays:
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Tesla (TSLA): Lower highs and lows, declining revenue and profits, and the looming expiration of a $7,500 EV tax credit. Schultz favors an above-resistance call spread, giving an 80%+ probability of profit if Tesla drifts lower or even stays flat.
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Lowe’s (LOW): Steady downtrend, with revenue and free cash flow falling. Schultz sees repeated opportunities to sell call spreads on rallies toward resistance.
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Honeywell (HON): Despite an earnings beat, free cash flow declined and the stock gapped lower. Schultz anticipates further weakness, especially if markets turn.
The Power of Selling Spreads
Early in his career, Schultz traded options for the leverage, but learned that buying options can quickly lead to losses due to time decay. His solution: sell spreads. This approach allows him to win if the stock goes up slightly, stays flat, or goes down—losing only if it surges past the sold strike. “We win on about nine out of ten trades,” Schultz says, crediting disciplined setups and probability-based positioning.
A Micro-Cap with Huge Upside: BLGO
Beyond options, Schultz invests in select micro-cap stocks with transformative potential. One standout is BioLargo (BLGO), a $52 million market-cap company with four divisions:
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Medical Wound Rinse – A cell-friendly disinfectant expected to roll out globally in January, projected to generate $50 million in first-year revenue.
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Sodium-Based Grid Battery – No lithium, no fire risk, full charge/discharge capability, and U.S.-sourced materials.
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Forever Chemical (PFAS) Water Treatment – Meets and exceeds EPA standards, with a major project launching in New Jersey this September.
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Engineering Services – Supporting product development across divisions.
Schultz is heavily invested, accumulating shares under $0.20, and sees 5x potential within 12–18 months.
Video Length: 00:18:45
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