BEST REVOLUTIONARY TRADE
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.
We’re moving into a crucial phase of the market where there is a two-week period before earnings season begins that can be very bumpy. The end of the second quarter rebalancing of the Russell 3000 and portfolio window dressing is done and now traders will be anticipating how best to trade off the fiscal stimulus news and progressively worse coronavirus news. It should make for a very interesting week ahead.
Against this more uncertain landscape, my team brings a daily dose of insights, detailed trading strategies, ongoing education and coaching to elevate our collective knowledge, trading instincts and provide a top-end trading experience for all our members.
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 out 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 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 2% target gain and 2% stop loss using stock price. Green color should be interpreted as a bullish signal and Red color as a bearish signal.
CURRENT TRADING LANDSCAPE
So, we have been staying in Florida for a couple of days now. My in-laws have a condo here, but my sister in law is currently living there, so we rented an apartment from their friend nearby. We have been staying here for just two days and in those two days, we managed to scratch the wall, lose the keys, and crack the glass cooktop.
No one admits to doing any of these things, but the fact remains, we do not remember these issues being there when they moved in. My wife is now faced with the dilemma of either calling the owners as to inquire of the original condition of these items or waiting for them to call her once we move out and they come back to find all of these changes. My vote goes to being a proactive and responsible adult, but I will let her make this decision and face the consequences of dealing with her parents.
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 $275-285 level in the next 45 days.
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 10-15% market corrections.
Based on our models, the market (SPY) will trade in the range between $275 and $330 for the next 4 weeks.
Our AI-driven Seasonal Chart indicates downward pressure for SPY over the next 20 days, which would coincide with the vacuum of corporate news before earnings season.
Leading up to the latter part of June, traders were of the view that being long stocks that would benefit from the reopening of the economy would prove to be the best trade. How that sentiment suddenly changed this past week was dramatic.
COVID-19 caseloads exploded in 29 states that included a sharp rise in hospitalizations, but thankfully the death toll rate is not spiking as medical front liners are better able to treat patients stricken with the. They’ve learned a lot in the past three months about rapid treatment resulting in a higher survival rate.
Although there is no vaccine available yet, the market is latching onto this “better treatment” news and also headlines for forthcoming Phase 3 trials for a few of the leading vaccine candidates. At the same time, several states have moved aggressively to re-shut businesses and public gathering areas to stem the resurgence of COVID-19.
Traders that want to commit short-term capital to this sentiment shift can do so by getting long the Direxion Work From Home ETF (WFH). In this world, it doesn’t take long for a custom ETF to list when there’s money to be made, and WHF was launched on June 25 just as the virus was exacerbating a second wave.
This is the first ETF with a strategy designed to provide investors with comprehensive exposure to firms at the forefront of the worldwide, societal transformation towards greater adoption of flexible work.
PwC’s recent COVID-19 CFO Pulse Survey notes that more than half (54%) of companies say that going forward, they’re planning to make remote work a permanent option for roles that allow. It’s even higher (61%) among financial services firms.
Because technology has allowed for greater remote productivity, trends toward more flexible work locations have increased over recent decades. Society has embraced the fact that a work-life balance does not require certain job functions to be executed in a traditional office setting. Below are the top holdings and sectors for WFH.
The 5-day chart shows a successful launch of WFH and given the momentum of the sector rotation back into the coronavirus stocks, this ETF should continue to move up and to the right in the week ahead.
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 Aggressive Power Trader and Weekly Power Trader advisory services.
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TRADE OF THE WEEK
A resurgence of the coronavirus has trading capital pouring back into the work-from-home and stay-at-home stocks. Part of this broad transition is the business of protecting highly sensitive data and information for businesses that usually run super secure virtual private networks from inside corporate facilities.
With the move to have millions of employees work remotely, the need for high walls of security surrounding the transmission of data is driving strong sales at companies that produce high-end cyber security software. One of the most formidable names in the sector is Fortinet Inc. (FTNT).
Fortinet provides broad, integrated, and automated cybersecurity solutions worldwide. It offers FortiGate hardware and software licenses that provide various security and networking functions, including firewall, intrusion prevention, anti-malware, virtual private network, application control, Web filtering, anti-spam, and wide area network (WAN) acceleration.
The company provides security subscriptions , technical support, professional, and training services. It sells its security solutions to channel partners and directly to various customers in telecommunications, technology, government, financial services, education, retail, manufacturing, and healthcare industries.
2020 revenues are forecast to rise by 16% to $2.5 billion and climb by another 16% in 2021 to $2.9 billion, making for a highly reliable sales and earnings model in a market where forecasting is like driving in a fog. However, in the first quarter, Fortinet surpassed estimates handily sending the stock sharply higher in early May per the chart below. The stock has spent the past two months consolidating and is now set up to take out the previous high and trade to new highs.
Applying our AI tools, the Seasonal Chart is bullish on FTNT for the next 20 days as momentum for the stock picks up on sector rotation and software stocks lead the rally.
At its current price of $138, the stock is sitting on key short-term technical support where it should turn higher in the days ahead and challenge $150. 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 enter a position at predicted LOW (BUY) price or yesterday's close price. For Aggressive Power Trader my stop loss is 1% and my target gain is 1% of a stock price.
For Weekly Power Trader my stop loss is 2% and my target gain is 2% of a 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 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 $1.8 million dollars. This stellar performance is made possible by being right on every 3 out of 4 trades with an average profit of 24.84% per trade. These kinds of incredible returns wouldn’t be possible without my decades-long and hard work in developing the most advance AI tools available to retail traders.
Once you’ve become a member to any of our services Weekly Power Trader or 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 Power Trader services your default trading system where the AI that powers my all-world, always thinking platform.