Power Trading and Markets – January 3, 2020
Welcome to 2020 and Power Trading and Markets (PTM), a service of YellowTunnel.com that works in close relation with Tradespoon.com to bring readers a higher level of trading awareness and discipline backed by AI-driven research and the most advanced trading algorithm available to individual traders.
YellowTunnel delivers high-visibility sector strength where a cluster of leading stocks are identified, coinciding with what we call a “10-day prediction momentum trade.” When we recommend a stock, ETF, our time horizon is same-day in-and-out and up to five days max, at which time in the majority of trades, would be closed out.
A winning trading formula is born out of the sophistication of my platform's underlying algorithm. Our models take into account options volatility, statistical correlations with indexes and proprietary technical and fundamental analysis conducted in real-time, among other factors.
We leverage advanced artificial neural networks that constantly self-learn in order to apply the best-fitting models to a particular stock or ETF in order to generate highly accurate signals. The power of a robust AI platform is fully on the trader’s side.
In this issue, I give a tight summary of the trading landscape, highlight a top-performing sector that we’re actively trading in and spotlight at least one stock or ETF that is demonstrating strong short-term performance. We also provide a look ahead as to what the traders should focus on so as to be watchful for timely setups.
OUR TRADING MODEL
When looking to execute the Aggressive Power Trader we are buying near the "BUY" level with a "10 days prediction" higher than the close price. In my Live Trading Room, I usually hold a position for 1-2 days and I usually allocate less than 5% of the portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be allocated if you hold a position less than 1 day. Within our Aggressive Power Trader trading list are trades that are traded during market hours in the Tradespoon’s Live Trading Room.
For the best results, I personally enter a position at the predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of the stock price. I target 75% accuracy using these signals.
CURRENT TRADING LANDSCAPE
Markets were sailing right along at the end of the textbook “Santa Claus rally” when news of a high-profile hit on the leader of Iran’s Revolutionary Guard Corps Quds Force General Qassem Soleimani was major headlines on Thursday night. What was clear skies ahead has now run into a formidable reason to take some risk off the table. The current uptrend is now under new pressure to sustain itself in light of these new developments and a shallow pullback is very likely in order.
China and Emerging Markets have led the market going into Friday. Most sectors were up on lower than average volume. Please continue watching 309 and 315 support levels for the SPY. My opinion is that the market will continue to make new highs for the first weeks of January 2020 as we approach the next earnings season.
It’s really difficult to figure out the extent of how this new geopolitical set of circumstances will play out in the week ahead. But it has given an overbought market a reason to sell and thus traders should be cautioned in fighting the tape from the long side and pay more attention to shorting extended stocks with weak fundamentals while paying strict attention to our AI-driven indicators for attractive buy points on leading stocks and ETFs.
This is the pause that refreshes those market-leading sectors to new highs in the past two weeks – namely technology, financials and cyclical sectors paying dividend yields above that of the S&P 500 SPDR (SPY) – should be considered as opportunities heading into fourth-quarter earnings season.
One of the most pristine charts within the broader market is that of the financial sector, represented by the Financial Select Sector SPDR ETF (XLF). I chose a three-year chart to illustrate the powerful uptrend the sector is against a backdrop of a neutral Fed policy, rising forward earnings growth and the likelihood of Fed tightening in 2021.
A quick view of the top ten holdings reveals who’s who list of financial stalwarts led by Berkshire Hathaway Inc. B (BRK-B) and J.P. Morgan Chase & Co. (JPM), accounting for just over 25% of the total ETF weighting. Following a long period of lagging performance, financials have broken out with gusto and are marching higher.
TRADE OF THE WEEK
Within the context of the global reflation theme, a steeper yield curve, a more robust lending cycle and a Fed likely to tighten rates a year out, the biggest global money center banks are wasting no time trading higher on this thesis. One of the key global players is Citigroup Inc. (C) with 2,410 branches in the U.S., Mexico, and Asia, taking full advantage of our largest trading partner in Mexico while leveraging its exposure to the fastest-growing region in the world – Asia.
Compared to its peers, Citigroup is cheap, trading at just 1.0x book value and sporting a low P/E of just 9x of forward earnings. The stock was destroyed back in the Great Recession, trading at a split-adjusted basis of $566 in 2008 before trading as low as $14.53 in March of 2009 and slowing grinding back up since.
Using a one-year chart with a 10-day moving average in red as the most near-term rising trend line, it’s pretty clear this global name is on the move – up and to the right for sure. Yes, there might be some market turbulence related to the Iranian skirmish, but my AI tools will surely be sending some buy signals on shares of Citigroup in the next week that traders won't want to miss out on. Assuming the stock undergoes some back and forth from its recent upside breakout, we would be buyers of Citigroup at $80 or lower on any market weakness. The stock is in a new stealth bull market.
YellowTunnel is a truly hands-on system and personal approach, lending itself to building a high level of confidence for grooming traders with constant coaching and my guiding of each trade using the tools I’ve created.
In our new service Aggressive Power Trader, I walk our subscribers through the “trade decision-making process” with the mindset of being in and out of trades within 24-48 hours with the objective of booking 30%-60% gains against the amount of capital at risk on each and every trade with 75% accuracy. Each day at 8:00 PM and 8:30 AM CST, we provide our Top Bullish and Bearish Stocks, each with an Entry Point. Our signals are meant to last 1-2 days. Below are actual recommendations with parameters found on our YellowTunnel Watchlist.
Through the Aggressive Power Trader service, we unite our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience that exceeds that of an institutional proprietary trading shop.
Market tailwinds are always appreciated, but when was the last time you booked profits in 20 out of 21 trades? This is why I’m beyond excited for what we’re crafting at YellowTunnel. A truly honed trading discipline enveloped in artificial intelligence that settles for nothing short of almost near perfection.
For those that have been trading alongside us for the past three years, their lives may have been changed forever. A $100,000 initial investment when backtested could have grown to over $1.6 million dollars. Yes, it takes real dedication and personal discipline to accomplish these kinds of gains, but this is the mission of us here at YellowTunnel.com – to train retail investors to hone the skills of a master trader empowered by cutting-edge AI tools I’ve created and refined over the past decade.
We also provide instructional videos on how to best use your membership and invite our members to participate in live weekly strategy roundtable workshops that are archived in the event that they need to be viewed at a later time.
Our algorithms are second to none on Wall Street and at YellowTunnel we are targeting the retail trader as our audience, it is a special situation that gives every trader a serious advantage never offered before anywhere. And for our special introductory offer of $17 for the first month, it should be the first financial priority for 2020 of accelerating financial success. (click here for special introductory offer of $17 for the first month)
Go to our website at www.yellowtunnel.com and get real-time serious about banking daily aggressive trading profits in your portfolio. With a 75% accuracy on all trades, this is a system that has delivered real wealth creation while I and my team do all the work. Make YellowTunnel a life-changing New Year’s resolution!