Power Trading and Markets – December 2, 2019
Power Trading and Markets – December 2, 2017
A warm holiday season welcome to YellowTunnel.com, a Tradespoon sister company, designed to bring aspiring and experienced traders a weekly column that provides insights to the short-term trading landscape, sector analysis, stocks and ETFs in focus, views, and opinions on trader discipline and a review of what trades are working best.
Each week in Power Trading and Markets (PTM), readers should expect to receive at least one hot aggressive stock or ETF pick based on our proprietary AI and an analysis of the current trading landscape, what lies ahead for the coming week. YellowTunnel is a comprehensive trading community and active trading platform providing a depth of predictive precision that is virtually unmatched for retail investors.
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.
At YellowTunnel we research and compress our AI-driven work into a capsulated format so that serious traders can act swiftly and confidently on our recommendations. Within our Aggressive Power Trader trading list, trades are recommended in our Tradespoon Live Trading Room as well as having access to my Watch List.
YellowTunnel is purposed to deliver 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, or related option strategy, our time horizon is same-day in-and-out up to five days max, at which time in the majority of trades, would be closed out.
When looking to execute recommended trades, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our 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. 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
The month of November delivered new highs for the Dow, S&P 500 and Nasdaq while the Russell 2000 broke out of nine-month base, which is very encouraging to the bull case as small-cap participation defines a market rally that is broadening out. Most areas of the market support a constructive trading landscape in that the bond yields, the dollar, and oil are all stable where rising oil prices, bond yields, and a too-strong dollar are potential market headwinds.
Economic data for the U.S. this past week was upbeat as New Home Sales, Initial Claims and Durable Orders all come in above forecast. Consumer confidence data for November is hovering near its record high and early Black Friday sales show a big 17.5% year-over-year jump with Back Friday sales expected to hit $7.5 billion and Cyber Monday sales are also forecast to grow by nearly 20% to $9.4 billion.
Leading the way higher has been well-supported buying in technology, industrial, healthcare, transportation, consumer staple and financial sectors with many institutional favorites posting new lifetime highs. It’s the kind of bullish action that should give traders confidence, when cyclical sectors zig, defensive sectors zag and the lion’s share of the gains are held intact. It’s vital that the heavily weighted tech sector has a chance to digest its gains and have other key sectors.
Trader remain vigilant that a “phase one” deal with China will eventually happen and soon. China threatened countermeasures against the U.S. over the weekend after Trump signed into law a bill that backed pro-democracy demonstrators in Hong Kong, casting fresh doubt on a deal not extending into 2020, but the market handled it well.
For the week ahead, the focus remains on trade progress and a full calendar of key economic data headlined by construction spending, ISM Manufacturing Index, Factory Orders, Employment, Consumer Sentiment and Wholesale Inventories. Traders are looking for existing impact from the tariff war, and so far, the impact has been material on China but minimal to the U.S. economy.
Despite weak ISM Manufacturing numbers we remain bullish on the market and believe current pull back will be 2-5%.
SECTOR SPOTLIGHT
The semiconductor sector composed of chip and chip equipment makers was the first sector to lead the rotation out of the market’s late summer defensive posture when REITs, utilities and consumer staples led. The semis broke out mid-October and traded to a new high as measured by the VanEck Vectors Semiconductor ETF (SMH). The top ten holdings in the SMH make up 65% of the ETF weighting
Top 10 Holdings (65.08% of Total Assets)
|
Name |
Symbol |
% Assets |
|
Taiwan Semiconductor Manufacturing Co Ltd ADR |
13.43% |
|
|
Intel Corp |
11.80% |
|
|
NVIDIA Corp |
5.77% |
|
|
Texas Instruments Inc |
5.17% |
|
|
ASML Holding NV ADR |
5.11% |
|
|
Lam Research Corp |
4.89% |
|
|
Advanced Micro Devices Inc |
4.85% |
|
|
Qualcomm Inc |
4.81% |
|
|
Broadcom Inc |
4.70% |
|
|
Applied Materials Inc |
4.53% |
From the one-year chart, shares of SMH have are poised to push higher after four weeks of consolidation.
When we identify a strong sector like semiconductors for current trades, other leading stocks within the cluster of names emerging will be considered and recommended in the Live Trading Room. For instance, NXPI Semiconductors (NXPI) was added as a targeted trade on November 20 where we bought the call options and closed out the trade on November 25 for a nice +28.13% profit.
|
NXPI (Option) |
LONG |
Nov 20, 2017 |
Nov 25, 2017 |
$3.10 |
$3.55 |
$1.50 |
$1.60 |
$0.45 |
28.13% |
We maintain a log of our Live Trading Room Trades to track our system that’s right 75% of the time. This 75%-win rate goes back to July 7, 2016, when I activated by an algorithm where $100,000 committed to every trade would today be worth more than $1.4 million.
The average return per trade is 24.57% tracking over 2,600 trades. My AI platform, developed over the past 15 years uses quant science to find and manage the highest quality, high return trade opportunities available. The software we developed leverages predictive analytics and hyper-fast processing speed to find relevant patterns in voluminous stock data, screening out the very best trade ideas with the highest potential for profit combined with fundamental and technical overlays that corroborate findings from the applied algorithms.
TRADE IDEA OF THE WEEK
With the semiconductor sector looking to emerge from its basing formation, my AI indicators have spotlighted Nvidia Corporation (NVDA) as an attractive set up for traders this week. This leading graphics chip maker has demonstrated excellent relative strength recently, gapping to a fresh 52-week high of $221.44 before settling back to fill some of the gap.
Our Stock Forecast Toolbox clearly illustrates that we’re still getting bullish signals in trading NVDA when the stock provides dips to buy into. We want to place a buy at or near the predicted low of $218 (+/- $1.42) and sell as close to the predicted high, in this case $234, as possible. With the stock closing Friday at $216.74 traders have an ideal entry point to work with. Day traders should look for 1% gains to profit from while maintaining a 1% stop loss.
I conduct the Live Trading Room events, spell out the parameters of each trade whereby traders determine their level of risk for each trade within the recommended range outlined and we move on to the next trade and do it again and again. It’s a truly hands-on system and personal approach that lends 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.
We’ve recently launched our new service Aggressive Power Trader that walks 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.
Through the Aggressive Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. The two platforms work seamlessly to provide our subscribers with the most robust trading experience that exceeds that of an institutional proprietary trading shop.
Our algorithms are second to none on the Street and being we at YellowTunnel 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, it should be a no-brainer to give Yellow Tunnel a try.
Go to our website at www.yellowtunnel.com and get acquainted with how to approach and harness the markets with the power of AI- with the mission of making millionaires out of ordinary people looking for a formula to not just raise their awareness and knowledge about trading successfully, but to fulfill the pledge of delivering the kinds of steady winning results and profits that change lives and secure retirements. Take us up on our offer and let’s get trading!