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 no shortage of news for traders to sift through and digest. Headlines swirling around Facebook and Twitter muzzling a divisive New York Daily Post article that centers on Joe and Hunter Biden have Congress calling for fresh hearings targeting first amendment violations became the just the latest story that is adding more sizzle to the upcoming November 3 elections.
COVID-19 is seeing a surge in new cases in Europe and several states in the U.S., calling into question the ability of these economies to fully reopen. Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin are close on numbers, but remain far on content to get a stimulus bill to the House floor, even as President Trump has raised his offer above $1.8 trillion to “go big, or go home”.
Lastly, the heart of earnings season is coming into full view where expectations of strong quarterly results are what the market needs to cancel out all the noise and delay of stimulus and vaccines for the pandemic. It’s getting spicy, but nothing fixes market ills like a bullish earnings season.
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
The SPY is trading in the consolidation phase and the main support level remains at $342-344 level.
The US Dollar and DXY were trading in a narrow range with downward momentum. Earnings season has started.
Currently, the key support level is at $340. As long as the SPY is trading above $342-344 level, I expect the market to retest August highs in the next 2-3 weeks.
I would be a buyer using any short-term corrections and use dollar-cost averaging strategy to accumulate positions at this level.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $347 level using SPY and "SELL" signal is at $356 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $318 and $360 for the next four weeks. Based on the aggressive trader monthly predictions, the market will break through the $360 level in December of 2020/first quarter 2021.
How To Use Our Signals
Once you become a member, I encourage you to review our Live Trading Room recordings to see how I trade Aggressive Power Trader signals in my account. A snapshot of how we produce our Live Trading Room Sessions shows how we pack in a lot of information that can be accessed from whatever device your driving.
As a reminder, 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.
I allocate less than 5% of my portfolio if the position is being held overnight. On average, less than 1% of the portfolio should be at risk, if you own a position for less than one day.
I 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.
Few subscribers asked about Options trading using the signals provided. Please review live trading room recordings. I often sell OTM credit put spread using weekly options and collect 0.5% using stock price. For example, if stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.
While there may be uncertainty surrounding the election cycle and the coronavirus, there is a very well-defined bull market in the housing market. Home buying at historically low-interest rates is fueling a torrid demand curve for new home construction. Builders are requiring less than 5% down to move into homes being delivered in six months from signing a contract and there is no shortage of buyers.
The SPDR S&P Homebuilders ETF (XHB) has been one of the top-performing ETFs in 2020, holding an attractive blend of homebuilders, suppliers are retailers.
From a purely technical standpoint, shares of XHB built a nice base during August through September timeframe, forming a quintessential double-bottom, higher-low formation, and just recently broke out to the upside with more gains forthcoming.
Trading at around $58, it would bode well for readers of this blog to join up today to Weekly Power Trader and be ready when we act on this trade.
TRADE OF THE WEEK
One stock that is a pure-play on homebuilders is Lennar Corporation (LEN). Based out of Miami, the company is a major player in the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land.
It primarily sells single-family attached and detached homes in communities targeted to first-time homebuyers, move-up homebuyers, active adult homebuyers, and luxury homebuyers. The company also offers mortgage financing, title insurance, and closing services for home buyers and others.
Earnings for 2020 are forecast to rise by 28% to $7.28 per share from $5.37 with 13 of 22 analysts rating the stock a Strong Buy or Buy. The company has soared past earnings estimates for the past four quarters, and there is little reason to think they won’t handily beat forecasts once again when they next report quarterly results.
The one-year chart of LEN is highly correlated to that of XHB, as it should be being the third-largest holding within that ETF.
When we apply our AI-driven Stock Forecast Toolbox to LEN, we get a strong “B” Model Grade rating that portends of a steady uptrend in the months ahead amid a well-defined trading range supported by powerful fundamentals.
When our AI platform rates stocks “A” or “B” it takes into account numerous proprietary indicators that are updating around the clock 24/7. My AI platform is always thinking, always learning, which provides a stream of profitable trades for our members.
By being a member of Weekly Power Trader, you’ll be sure not to be left out when we move in and out of this stock and other leading homebuilding stocks. This is a great time to consider joining, as market volatility and the promise of a robust earnings season make for a highly opportunistic trading landscape.
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 as well.
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 for less than one day. I personally look to enter a position at the 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 almost $2.0 million dollars. This stellar performance is made possible by being right on over 76% of all trades with an average profit of 25.15% per trade. This kind of performance stands alone among all other trading services.