Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness and trading profits.

There is a fresh tug-o-war shaping up between the bulls and bears for the week ahead that should make for an interesting trading landscape. On the one hand, the market is contending with rising coronavirus caseload that is rattling trader sentiment and on the other hand, China, Europe and emerging markets are breaking out.

NEW WEEKLY POWER TRADER SERVICE

We recently launched our new Weekly Power Trader service that we at Yellow Tunnel are very excited about. Each week on Sunday, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.

Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop as 2% of the stock price.

Signals have averaged over 75% accuracy in my live trading since inception. Sometimes we hold position 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. Green color should be interpreted as a bullish signal and Red color as a bearish signal.

CURRENT TRADING LANDSCAPE  

I went to the gym today, first time in oh, four months? Granted this was an apartment building gym and I was the only person in it, but it was still a gym and I haven’t been in one for a while. I had to wear a mask unless I was running on a treadmill and I was constantly wiping things, but for the most part, it was the same old gym. It felt strange to finally run on a treadmill after months of running outside, but it also felt good, kind of invigorating. Getting back my freedoms, one treadmill at a time.

SPY has been enduring some volatile sessions this past week on the news about access to the president's financial statements and negative headlines surrounding the coronavirus. Value stocks (Industrials, Financial, and Transportation sectors) continue to underperform the market.   

The short-term bottom is at $293 and potentially can be retested in the next two weeks. SPY longer-term       overhead resistance is at $323. The market has started the July correction phase and can retest $293 level in the next 14 days. At this point, I do not think the market will break $293 level as China, semiconductors and Work From Home stocks continue to outperform. The earnings  season will start next week.

I am using this week to rebalance my portfolio and reduce exposure to the market. 

"BUY" signal based on the Aggressive Power Trader Portfolio for Monday is at $312 level using SPY and "SELL" signal is at $320 for short term traders. 

I expect the market volatility and the two percent daily market moves to persist. SPY top is set at $322 and the market can potentially retest this level in the next 1-2 weeks. The market can overshoot support and resistance levels when VIX is elevated. Short term support is set at $293. My strategy is to buy 5-10% market corrections.

Based on our models, the market (SPY) will trade in the range between $293 and $330 for the next 4 weeks.   

 

SECTOR SPOTLIGHT

A sudden and powerful rally has ensued in China, whereby the Peoples Bank Of China (PBOC) has taken a page out of the Federal Reserve’s playbook – jawboning the market higher on promises of unlimited fiscal stimulus and intervention in the markets to support a full economic recovery. The chart below shows a clean upside breakout of the iShares China Large Cap ETF (FXI), which is my favorite trading vehicle for China.

Shares of FXI are highly liquid and are supported by a very active options chain for traders seeking tight spreads and plenty of open interest. The top 10 holdings are noted in the table below.

Applying my AI tools to the FXI trade, we get a near-term 10-day target of $51 on the stock, representing a nice move higher from its current price of $44.50.

It’s a compelling set up for aggressive sector traders to take full advantage of per my buy signals to maximize optimal entry points. I’ll be looking to trade this sector for those that want to trade on our signals within our Weekly Power Trader advisory services.

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TRADE OF THE WEEK

One of the hottest and leading companies within China’s market is Baidu, Inc. (BIDU), a leading search engine, knowledge and information centered Internet platform and AI company. Some like to call it the Google of China. It operates through two segments, Baidu Core and iQIYI.

The Baidu Core segment offers products for uses, including Baidu App to access search, feed, and other services using mobile devices; Baidu Search to access its search and other services through its other properties, Baidu Feed that provides users with a personalized timeline based on their demographics and interests; Haokan, a short video app; and Quanmin, a flash video app for users to create and share short videos.

It also provides Baidu Knows, a question-and-answer community where questions are asked, answered, and organized by users; Baidu Encyclopedia; Baidu Healthcare Wiki; Baidu Wenku; Baidu Scholar; Baidu Experience; Baidu Post Bar, a social media platform; Baidu Maps that offers locations, and intelligent routing and navigation services; Baidu Input Method Editor or Baidu IME, a Chinese-language mobile keyboard; Baijiahao; and DuerOS, a voice assistant platform.

The company is forecast to post revenue of $110 billion for 2020 and grow the top line by 15% in 2021 to $126 billion. Earnings of $47 per share in 2020 are estimated to jump to $61 per share in 2021, giving the stock a modest P/E ratio of about 20x.

Applying our AI tools, the Stock Forecast Toolbox is bullish on for the next 10 days as momentum for the stock picks up on sector rotation and Chinese stocks lead the rally.

At its current price of $131, the stock is challenging minor overhead resistance, that when cleared, will take the stock up to $140. Traders should be on alert in that I may be adding this position to our trading portfolio in the coming days.

Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are “green lighted” by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested in each and every trade.

Trading Thoughts: 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 allocate no more than 5% of trading capital to any single trade. I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position less than one day. I personally look to enter a position at predicted LOW (BUY) price or yesterday's close price.  For Weekly Power Trader, my stop loss for stocks is 2% and my target gain is 2%.     . I target 75% accuracy using these signals.

Through the Weekly Power Trader service, we tie 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 available anywhere in the market today.

For those that have followed since inception, a $100,000 initial investment when backtested may have grown to over $1.9 million dollars. This stellar performance is made possible by being right on every 3 out of 4 trades with an average profit of 24.86% per trade. These kinds of incredible returns wouldn’t be possible without decades-long of hard work in developing the most advance AI tools available to retail traders.

Once you’ve become a member to any of our service – Weekly Power Traderor Aggressive Power Trader, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived in the event that they need to be viewed at a later time.

Volatility is back and the next few weeks and months will test the skill of every trader. While there is a new heightened level of uncertainty, with the right AI tools, there are hugely attractive opportunities. This is where the power of AI takes over to navigate a market of lemons into lemonade.

Go to our website at www.yellowtunnel.com and make the Weekly Power Trader service your default trading system where the AI that powers my all-world, always thinking platform.