ETFs have been hot lately. First, 3 or 4 show up on my Oracle algo. Then, 1 or 2 hit the signal. It seems like every day at least one turns into a winner.
Now, with all the new ETFs, there has been some confusion.
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Table of Contents
The Big Picture
As I write, there are 5,397 ETFs registered and listed in the U.S. with more than $15 trillion under management.
Here’s the wild thing…
Around 4,000 new ETFs have been launched and listed in the past five years. That’s over three per trading day. We’re on pace for a record number of new ETFs in 2026.
What Are ETFs?
ETF stands for exchange-traded fund. ETFs track underlying equities and/or derivatives. (For more detail, see this infographic.)
Unlike the old days, when you might just buy an ETF tracking one of the major indexes, now you can trade:
- Single stock ETFs
- Inverse ETFs
- Leveraged ETFs (2X and 3X are common)
- Inverse leveraged ETFs
- Options-based ETFs…
…the list goes on.
In fact, there are so many new ETFs that it’s like…
ETFs Are the New Penny Stocks
Let’s take a ticker that came up yesterday as an example:
Yieldmax PLTR Option Income Strategy ETF (NYSE: PLTY) is an ETF that uses options to mimic the price movements of Palantir Technologies Inc. (NASDAQ: PLTR).
Again, PLTY is not a stock even though it looks like one when you pull up a chart. That said, there’s one big difference that’s good for traders with small accounts.
The Price Is Right
Yesterday, PLTR was up on positive earnings, trading into the $160s:
PLTR, 8/4/26, 5-min candles, morning through midday
Meanwhile, PLTY, which tracks PLTR and attempts to mimic the price, traded in the $30s:
PLTY, 8/4/26, 5-min candles, morning through midday
What does this mean for you?
It means that if you’re interested in trading Palantir but you only have a small account, you can trade an ETF that tracks PLTR’s price movement.
What About Leveraged ETFs?
Leveraged ETFs track the underlying equity or derivatives at a multiple of the % gained or lost.
For example, the Direxion Daily MU Bull 2X Shares (NASDAQ: MUU) ETF tracks Micron Technology, Inc. (NASDAQ: MU). But MUU moves at roughly double the percentage gained or lost by MU:
Midday yesterday (August 8), MU was trading at $896, up +8%.
MU, 8/4/26, 5-min candles, high–priced stock up single digits on earnings
Meanwhile, MUU traded in the high $20s, but because it’s a 2X leveraged ETF it was up +15.9%:
MUU, 8/4/26, 5-min candles, leveraged ETF up double-digits on PLTR earnings
There are also sector ETFs. For example, the iShares Semiconductor ETF (NASDAQ: SOXX) tracks the Philadelphia Stock Exchange Semiconductor Index (SOX).
Now, if you’re interested in trading ETFs, then you need answers to two questions:
- How do you know which ETFs to trade?
- What is the best way to trade them?
Here you go…
My Take
I call ETFs wallet padders. That’s because they are high-float vehicles that tend to move slower than penny stocks. Because of that, they’re bangers when they hit the Oracle signal.
How do you know which ones to trade? Use Oracle. Oracle is an algorithm scanner that calculates during premarket and locks in 10–20 stocks at the market open. It’s included in the Daily Income Trader System.
Over the past several months, there hasn’t been a day go by without one of these ETFs on Oracle. Again, ETFs are not stocks, but they show up on Oracle as trading vehicles.
What is the best way to trade ETFs? In my opinion, the best way to trade ETFs is to use the Oracle Tool. A few minutes after the market opens, Oracle gives a trade plan, including buy signal, sell zone, and stop.
Watchlist
Space Exploration Technologies Corp. (NASDAQ: SPCX) delivered Q2 earnings yesterday, its first since the IPO. SPCX is the space sector leader, so watch how the market responds.
If you’re interested in a space sector ETF, watch TEMA Space Innovators ETF (NYSE: NASA)
NASA, 2-day, 5-min candles, space sector ETF
Again, use Oracle, trade the ETFs that hit the signals and know your trade plan before you enter.
On My Radar
- An act in two parts: Part 1 – my Very, Very Bullish On America appearance on Schwab Network in 2025
- Part 2 – the S&P 500 officially hit a new record high yesterday. Still bullish on America
- An Iran deal is close. Allegedly. Again
- Must read on how the AI boom is affecting the economy