Power Trading and Markets – December 8, 2019
Power Trading and Markets – December 8, 2019
Welcome to YellowTunnel.com, a Tradespoon sister company, designed to bring aspiring and experienced traders a weekly column that provides insights to the short-term trading landscape, sector analysis, stocks and ETFs in focus, trader discipline and a review of what trades are working best.
Each week in Power Trading and Markets (PTM), readers should expect to receive at least one hot aggressive stock or ETF pick based on our proprietary AI and an analysis of the current and upcoming trading landscape for the next week. YellowTunnel is a comprehensive trading community and active trading platform providing a depth of predictive precision that is virtually unmatched for retail investors.
A winning trading formula is born out of the sophistication of my platform's underlying algorithm. Our models take into account options volatility, statistical correlations with indexes and proprietary technical and fundamental analysis conducted in real-time, among other factors. We leverage advanced artificial neural networks that constantly self-learn in order to apply the best-fitting models to a particular stock or ETF in order to generate highly accurate signals.
At YellowTunnel we research and compress our AI-driven work into a capsulated format so that serious traders can act swiftly and confidently on our recommendations. 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 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.
CURRENT TRADING LANDSCAPE
Employment data released Friday fully impressed investors by soaring past estimates that caught much of Wall Street by surprise. The headline nonfarm payrolls figure checked in at 266,000 and well above the consensus estimate of 182,000. October’s payroll number was also revised higher to 156,000 from 128,000. Hourly earnings rose by 0.2% and the unemployment rate fell to 3.5% versus 3.6% consensus.
As to the pending trade deal with China, White House economic advisor Larry Kudlow was quoted “President Trump likes what he sees with the China trade talks, but he is not ready to sign the phase one deal with China. U.S. and China are talking around the clock, but the final strokes have not been agreed to yet.” Mr. Kudlow said he is not going to be specific about the details of the trade deal and there are no deadlines for a trade deal, which calls into question the December 15 date for additional tariffs to hit.
Friday’s market session enjoyed its biggest gain since October 4. The SPY is trading right back up to its all-time high of 315.48 and has a good shot of breaking out above this level with 320 as the next near-term target that could be achieved over the next two to four weeks. Rising technical support is at 302-304 where the 50-day m.a. comes into play. And the rally is broad based with most sectors participating.
What’s encouraging is to see the cyclical sectors exhibiting strong relative strength. Shares of financials, materials and industrials are getting the most attention during the past two sessions after a brief spell of consolidation. In addition, the Russell 2000 is enjoying a clean upside breakout of a base that goes back to February.
SECTOR SPOTLIGHT
This past week has seen a decisive upside breakout in the metals and mining sector, giving rise to the prospect of a strong rally in commodities is in the making. Such a move implies a pickup in global growth ahead from stronger demand that historically leads to better pricing for the sector. It can also be a leading indicator that inflationary pressures will begin to show up in the forward data and is what every central bank around the world is hoping for – that elusive 2% inflation target rate.
Within the metals and mining sector there are steel makers, iron ore producers, gold, silver, copper mining stocks and a variety of other minerals extraction and processing companies. The leading ETF in the space is the that reflects the recent strength is the SPDR S&P Metals and Mining ETF (XME). The top 10 stocks in the ETF make up just over half the total assets.
When our AI tools are applied to this trade, we get some strong bullish indicators that only fortify our conviction about the fresh upside breakout of the protracted downtrend. The Tradespoon Seasonal Chart has four of five “higher” probability readings flashing that sets up an opportunity to aggressively trade this ETF with a high level of accuracy.
TRADE OF THE WEEK
Of the stocks that dominate the XME ETF, Reliance Steel & Aluminum (RS) stands out as the best-in-class to trade short-term. RS provides alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products and related processing services to general manufacturing, non-residential construction, transportation, aerospace and defense, energy, electronics and semiconductor fabrication, auto, and heavy industries. It also offers precision sheet metal fabrication services that have applications is a host of various markets.
Shares of RS traded to a new all-time high of $121.09 as of Friday after putting in a high-tight-flag formation following a gap higher move from a big-earnings beat in late October. With no sellers above, and money rotating hard into the sector, the least path of resistance for RS is higher.
Our Stock Forecast Toolbox clearly illustrates that we’re getting bullish signals in trading RS when the stock provides dips to buy into. We want to place a buy at or near the predicted low of $115.67 and sell as close to the predicted high, in this case $120.69, as possible. With the stock trading Friday at $120.60 traders have an ideal trading range to work with. Day traders should look for 1% gains to profit from while maintaining a 1% stop loss.
As a reminder, consider buying near "BUY" level with "10 days prediction" higher than close price. In our live trading room, I usually hold position for 1-2 days. I usually allocate less than 5% of portfolio if I hold position overnight. On average, less than 1% of portfolio should be at risk if you hold position less than one day.
I personally enter position at predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of stock price. I target 75% accuracy using these signals.
I conduct the Live Trading Room events, spell out the parameters of each trade whereby traders determine their level of risk for each trade within the recommended range outlined and we move on to the next trade and do it again and again. It’s a truly hands-on system and personal approach that lends itself to building a high level of confidence for developing traders with coaching and guidance in each trade using the tools I’ve created.
We’ve recently launched our new service Aggressive Power Trader that walks 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. 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.
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 have been changed forever. A $100,000 initial investment has grown to over $1.6 million dollars. These are heart-stopping returns. 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 also provide 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 $17 for the first month, it should the first item on your holiday shopping list for you or others where the gift of financial success is just a click away (click here for special introductory offer of $17 for the first month) .
Go to our website at www.yellowtunnel.com and get acquainted with how to approach and harness the markets with the power of AI- with the mission of making millionaires out of ordinary people looking for a formula to not just raise their awareness and knowledge about trading successfully, but to fulfill the pledge of delivering the kinds of steady winning results and profits that change lives and secure retirements. Take us up on our offer and let’s get trading!