Will Platinum Outperform Gold
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Markets traded sharply lower to start the week out and regained their footing into the FOMC meeting where the Fed threaded the needle of dovish narrative that assuaged the broad fears that tapering and tightening of short-term rates would be on a more of a wait-and-see schedule instead of a hard timetable. It was a Goldilocks moment for the bulls and they ran with it.
The late-week rally brought the S&P back up to its 50-day moving average led by financials and reflation stocks as the yield on the 10-yr Treasury pushed above 1.4% for the first time since July. Although the Fed’s message was accommodative, the bond market is raising its expectations of the eventuality of less stimulus and more inflation.
Of the many developments during the week, the most encouraging is the resurgence of the travel/leisure sector implying optimism about the Delta variant plateauing with the weekly data showing some early signs of progress. On the flip side, Nike posted earnings that disappointed, citing major supply chain disruptions that are spilling over to those retail stocks that depend on third-party sourcing.
There are definitely some emerging signs of rotation out of growth and into value – and this is exactly where the power of our AI models in our Weekly Power Trader advisory service becomes so valuable in identifying those ETFs and stocks with which to trade.
The bulls definitely gained the upper hand this week after enduring a rolling correction for most of September. The $SPY closed right above the 50-day moving average, $443. The value/reflationary stocks rallied after the FOMC decision, up 1%, and settled right below the 50-days moving average. Technology stocks closed higher, 1% right above the 50-day moving average.
The $DXY is short-term overbought and started pullback from $93.50. The $TLT is short-term overbought and also pulled back from the resistance at $152.
Volatility pulled back to 18 (VIX was at 29) and SPY short-term overbought after Thursday’s bounce. The $SPY short-term support level is at $436, followed by $428. The SPY overhead resistance is at $443 and then $446.
I expect the bottoming process to continue in the next few sessions. At this point, I believe the recent low at $428 is set. The unemployment numbers next week will dictate if the retest of recent lows in the books. I would be a buyer of value stocks on pullbacks and sell technology stocks on rallies.
I would consider rebalancing my portfolio at this time and have a bullish portfolio. The second wave of the selloff will continue for the next 1-2 weeks. Market corrections are never a one-way trade.
Based on our models, the $SPY can pull back 5-10% from the all-time highs in the next 1-2 weeks. If you are trading options consider selling premium with October and November expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for Monday is at $435 level using SPY and the "SELL" signal is at $446 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $420 and $455 for the next 2-4 weeks.
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What makes this new service so special is that it offers real-time alerts via SMS and access to Vlad's live positions and orders. When I put together this system, I wanted to be in the fight with other investors. That’s why I don’t play on your emotions to sell newsletters - I put my money where my mouth is.
Every trade recommendation that I make using this system – comes straight from the list of trade recommendations I use myself.
Not only that but every trade I make is logged in detail for you to review at any time. You can see my entire trading history, updated LIVE so that you can see, learn from, and even copy my trading strategy.
Signals have historically averaged over 86% accuracy in my live trading since inception. Sometimes we hold position 2-5 days by using options (selling OTM Calls and Puts spread) and targeting 1% target gain and 1% stop loss using stock price. The green color should be interpreted as a bullish signal and the red color as a bearish signal.
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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 you’re 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 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.
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With bond yields pushing higher and inflation data showing persistent upward pressure as well, a timely trade is shaping up for the metals and mining sector that has retreated down to a key support level. Shares of the SPDR S&P Metals & Mining ETF (XME) are a favorite of mine for trading the sector.
The sector is historically quite volatile due to wide price swings in the underlying commodities, so trading an ETF can help manage volatility better. There is strong exposure to gold, aluminum, steel, iron ore, silver, and other industrial metals that are both leveraged to a global economic rebound and higher inflationary trends.
The top 10 holdings within XME account for just over 46% of total assets with MP Materials (MP), a rare earth mineral mining company, occupying the top spot.
From a technical standpoint, shares of XME have put in a reversal this past week, where the shares held their 200-day moving average at $39 and caught a bid from buyers on September 22 in a high-volume session that is setting up XME to challenge overhead resistance at $42 and then up at $44.50.
When we apply our AI-driven Seasonal Chart to XME we get a very bullish “Higher” probability reading for the next 20, 30, 40, and 50-day periods. For traders wanted to receive our buy signal and related trades in XME, make the decision today to become a new member of Dynamic Power Trader and don’t miss out on when we trade XME.
TRADE OF THE WEEK
Another way to play the bottoming process in the metals and mining space is to consider trading platinum from the long side. As the most expensive of the precious metals, platinum has various industrial uses and is vital to the production of catalytic converters that all combustion cars and trucks must have as part of their assembly to generate clean exhaust.
Shares of Aberdeen Standard Physical Platinum Shares ETF (PPLT) are best suited for trading this metal. The ETF is 100% invested in pure platinum bullion and devoid of any mining companies, making it ideal listed security with a 1-to-1 correlation with the price movement of the underlying metal.
PPLT has $1.35 billion in assets, so it’s not a small ETF by any means. The average daily trading volume is about 200K and there is no options chain so as to discourage manipulation.
When looking at the short-term chart, we see a similar pattern to that of XME, which saw a big reversal higher this past week right into the FOMC meeting on the prospect of the Fed policy statement outlining the slowing of QE and pulling forward the likelihood of higher Fed Funds rate in early 2022.
Aside from the bullish chart pattern, our AI platform is flashing a buy signal on the stock The Forecast Toolbox gives a Predicted Resistance price target of $115.60, implying a move higher of 27% over the intermediate-term.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like a clear and newfound uptrend in stocks like PPLT. By being a member of any one of our services, it’s these kinds of opportunities that our proprietary algorithms provide our members to look forward to every day, where they can put their risk capital to work on both long and short positions.
Through our services, 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.
The beauty of our AI-driven system is that we are always equipped to bring new trades to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.
We really pride ourselves on this kind of discovery process, to bring trades with very high probability risk/reward parameters to members throughout each week. Our track record speaks for itself from a standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
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Once you’ve become a member of any of our services, 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.
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