Power Trading and Markets – January 20, 2020
A hearty welcome to everyone from our Yellow Tunnel community. Our primary goals are to improve trading psychology, awareness and hone those trading skills that result in steady and successful profits on a consistent basis. Our aggressive trading approach is designed to be enjoyable with ease of use AI tools that do all the thinking and provide a high level of confidence to all those that follow my lead.
CURRENT TRADING LANDSCAPE
The market traded higher after both the Phase One trade deal with China and the USMCA agreement were signed by President Trump. The bull market broke through a $330 level on SPY after better than expected retail numbers. Technology sectors have led the market all week with financials and healthcare trading solidly higher as well.
The market outlook for the next four weeks remains the same. I expect shallow corrections in the next two weeks and bullish trend to be intact. Please watch 315 and 320 support levels using SPY. My opinion is that the market will continue to make new highs in January as we are starting earnings season.
This week, there is improving price action in the materials sector, reflecting a more bullish outlook for the domestic and global economies. The S&P 500 Materials sector advanced 12.7% from early October through the end of December, before some minor profit-taking set in. The past two weeks have seen the sector challenge its recent high.
The Materials Select Sector SPDR ETF (XLB) is the largest diversified ETF for the materials sector and holds S&P 500 constituents based on market capitalization. The fund is relatively concentrated with 66.52% of assets in its top-10 holdings.
The two-year chart of XLB displays a nice uptrend with an upside breakout of the 52-week high looking imminent. What’s so attractive about this chart is that XLB has topped out back in January 2018 and has been building a base for the past two years, making for a great set up for a fresh bull trend to emerge in a market where some sectors are overbought. Thus, we should see strong rotation into materials ahead.
Of the top holdings, there is a concentration of companies the produce chemicals, paints, industrial gases and resins that are essential in nearly every industry. Pricing for these materials sub-categories is firming with a pick up in global demand, making for a bullish case for earnings in 2020.
Best of all, my very short-term AI indicators are flashing a strong “A” model grade rating that gives me a high level of confidence we can aggressively trade the sector from the long side either by using XLB or some of the underlying components.
TRADE OF THE WEEK
Within XLB, the stock with the most constructive short-term potential based on my AI tools is Newmont Mining Corp. (NEM), a leading gold, copper and silver producer with operations in the U.S., Australia, Peru, Ghana and Suriname. As of December 31, 2018, the company had proven and probable gold reserves of 65.4 million ounces and an aggregate land position of approximately 24,000 square miles.
2020 earnings are forecast to be $1.29 per share and set to soar of 54% in 2021 to $2.00 per share. Of the 18 analysts that track the stock, 2 have Strong Buy ratings and 9 have Buy ratings with a high price target of $56.
The stock trades at $44 and sits right at the 52-week high where I’m a buyer expecting new highs in the next 10 days.
Additionally, my Tradespoon Stock Forecast Toolbox is bullish on the stock with a 10-day price target of $47.18 as Predicted Resistance.
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.
The beauty of this service is that it provides tomorrow’s featured trades the night before so traders can analyze and work on how they might best want to participate. You get to examine well ahead of when I’m going to execute my best ideas the next day. It also makes available my watchlist of trading candidates with the various parameters that I supply to manage each trade with defined risk levels.
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 Aggressive Power Trader Watchlist.
I want to highlight that each trade is targeted for a 1% gain, where in a month when there are 22 trading days, we can theoretically make 22%. In reality my algorithms are winning 75% of the time, where the expected return would be producing roughly 16% per month. On a cumulative basis, over the course of a year, aggressive traders can generate up to 200%, far outpacing the most successful hedge funds in history with minimal overnight risk.
We get there 1% at a time and do it on average every three out of four trades. I posted last Thursday night that we would be buyers of Danaher Corp. (DHR) on Friday and the stock gained 1.0% in the early hours of Friday’s session. I’m only showing three of ten stocks and ETFs that made up our Thursday night Watch List, so there are plenty of trading opportunities in stocks and ETFs to put to work on a daily basis.
I also post details of our trading activity and updates on the Watch List at the bottom section of our daily blog. So, make sure to stay tuned in that service as well.
As a reminder, consider buying near the "BUY" level with a "10 days prediction" higher than close price. In our Tradespoon 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 enter a position at 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.
Through the Aggressive 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 that exceeds that of an institutional proprietary trading shop.
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 has grown to nearly $1.7 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 the cutting-edge AI tools I’ve created and refined over the past decade.
We encourage all subscribers to view the 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 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 ???, it should be the first financial priority for 2020 of accelerating financial success.
Go to our website at www.yellowtunnel.com and put Aggressive Power Trader to work as we enter the heart of earnings season. It is truly the most powerful unfair advantage that is only found here at YellowTunnel.com.
OUR TRADING MODEL
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 and 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.