Reefer Madness: Smokin’ Hot Pot Stock

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.

The stock market rally continues to extend itself as capital flows are pouring off the sidelines, primarily into ETFs that have to buy the underlying securities, which in turn pushes the market higher. That’s just one bullish mechanism. There is also the promise of further massive stimulus where President Biden, Treasury Secretary Janet Yellen, Fed Chairman Powell and the majority of Congress are all in concert with bringing a fire hose of fresh spending to further address a pandemic-laden economy.

What’s interesting is the widespread evidence of how companies have restructured and, in many ways, re-engineered their business models to conform with the remote working conditions that have been in place for almost a year. Office buildings remain largely empty, but that hasn’t seemed to slow progress on large corporate initiatives to pull forward future plans to streamline and apply futuristic technologies.

As such, most companies that have undertaken swift changes to modernize and shore up business will be able to post large increases in profits on smaller gains in revenue in what can be described as a period of intense lean and mean corporate makeovers. It goes without saying companies will do much more with downsized workforces, and this presents a problem for the labor pool where recent weekly unemployment claims are rising and the unemployment rate stands at 6.7%.

The Fed’s dual mandate of controlling inflation and maintaining full employment, which by definition is 5% or under, will keep QE of $120 billion per month flowing through at least the end of 2021. With an additional trillion+ dollars of further spending planned for infrastructure, healthcare, education and clean energy projects, the market looks to continue to feed off of these promises until full employment is reached and core inflation meets or exceeds 2%. Everything else is secondary to the bull trend.


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.


It’s been a very exciting time to make money in the market through our AI-driven trading systems. Not having these always learning, always thinking, always data-crunching     AI algorithm models is almost like driving 80 miles an hour in a thick fog. I can be done, but the likelihood of hitting something is pretty high. Translated – our system greatly enhances performance and alleviates bad decisions and losing trades.

This week has also been marked by the upside breakout in FAANG stocks after lagging for the past two months. Big moves from Netflix Inc. (NFLX) following earnings triggered huge buying in Alphabet Inc. (GOOGL), Inc. (AMZN), Facebook Inc. (FB) and Apple Inc. (AAPL), driving the major indexes to new all-time highs.

The SPY continued to make incremental gains and settled at the $384 level. Similar price action to yesterday. Mega Cap Technology stocks led (NFLX, AMZN, AAPL) supported by Semiconductors (SMH), Homebuilders (XHB) and Consumer Discretionary (XLY). XME, IWM, XBI and Bitcoin underperformed.

The key support for the market remains at $372 (worse case $364). The earnings season will continue this week with (IBM, CSX, and STX) scheduled to announce their earnings tomorrow. The bulls have been losing momentum and I still expect up to 5% correction in January-February.    

The bull market has resumed its long-term rally and will continue to make new highs into March-April. I would be a buyer using any short-term corrections and use dollar-cost averaging strategy to accumulate positions. If you are trading options consider selling premium with March and April expiration dates.

"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $380 level using SPY and "SELL" signal is at $387 for short-term traders.  Based on our models, the market (SPY) will trade in the range between $364 and $390 for the next 4 weeks.  

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 the stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.


------------------------------    SECTOR SPOTLIGHT

Of the many themes taking shape due to the new makeup of the White House and Congress is the widespread legalization of marijuana, and with it, a broad rally in cannabis and cannabis-related stocks have enjoyed a sudden burst of bullish momentum. Even as stater was     making inroads to legalization, the blue wave in D.C. only accelerates the process.

The cannabis sector is by most market standards, relatively new where in-depth research is not widely applied. With so many nascent companies, high-quality due diligence is at a premium. So, for many traders that want to join in on the new-found momentum, they are doing so by way of trading the sector as a whole.

The ETMFG Alternative Harvest ETF (MJ) is just that vehicle for taking a much safer approach to trading a sector that exhibits wild swings. This ETF spans exposure from medical cannabis, recreational cannabis, growing suppliers, greenhouse facilities, pesticides and distribution companies. The top ten holdings encompass 60% of total assets that correspond to the total return performance of the Prime Alternative Harvest Index. It’s a nice blend of stocks that have     delivered as much alpha as single stocks.

One might say that shares of MJ experience a real “high” off the election results, taking all of the key components to new 52-week highs. But as the chart below shows, MJ is trading at an elevated level above its 20-day moving average (blue), but bullish momentum is being driven by rising daily volume, the oxygen of a stock’s direction.

Our AI platform is bullish on MJ. The Stock Forecast Toolbox rates the stock with a 10-day price target of $24.45. With the shares trading at $19.50, traders have an excellent opportunity to trade MJ from the long side in the short-term.

When we apply our AI platform to MJ using the Forecast Toolbox, we get a 10-day Predicted Resistance of $24.45 from its current price of $19.50, implying a move higher of better than 20% over the course of the next two weeks. That’s an excellent move for stock traders and an explosive move for option traders.