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RoboStreet – August 16, 2018
New Trade Talks With China Send Stocks Soaring
With five of the past six trading sessions being lower for the major averages, the headline that ‘China and U.S. to Resume Low-Level Talks in Bid to Resolve Trade War’ came as a breath of fresh air. The market had been suffocating on the notion of further tariffs being triggered and fear of additional action taken if China didn’t start to cooperate. China’s Ministry of Commerce announced Vice Commerce Minister Wang Shouwen will visit the United States in late August to discuss trade with U.S. Treasury Under Secretary David Malpass.
On the table will be the allowance of foreign investment in Chinese companies, reworking the terms of transferring technology, increasing exports to China and reducing the trade deficit. It is also notable that China’s National Development and Reform Commission acknowledged that bankruptcy filings in China are on the rise this year. This might well be a larger catalyst than is being reported. Additionally, two of China’s major consumer companies- Tencent and JD.com-both missed profit forecasts this week, sending the Shanghai Composite Index to a new 52-week low.
More trade-related headlines crossed the tape when reports broke that Chief Economic Advisor Larry Kudlow stated in a Fox News interview that the U.S. is making headway in Europe and Mexico. Regarding NAFTA and specifically U.S.-Mexico, he said the new trade deal will be great for both countries. He also expressed that the current economic boom is far from over, which is being taken to heart by investors after much hand wringing about a potential slowdown of domestic growth due to a trade war on many fronts. Although much work has yet to be done, the news sparked a big relief rally.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
As to what the market cares about most, it is those stocks that exceeded Wall Street estimates and raised guidance for the third quarter and all of 2018. Earnings season always separates the wheat from the chaff; the future winners from those that will end up being sources of year-end tax selling to offset capital gains. Within every bull market there are various phases where even bad news is ignored and stocks trade higher. This is not one of those periods. We’re in a ‘take no prisoners’ market where if a company misses their quarterly numbers, their stock will suffer greatly.
Thankfully, those that have subscribed to RoboInvestor, where my ‘always learning’ artificial intelligence platform filters out unforeseen trouble that escapes conventional research methods, were able to put together winning trade after winning trade. How good does my AI platform perform for our RoboInvestor Portfolio? Since launching the service back on April 2 of this year, we have never booked a loss to date, thereby providing a steady stream of profits that compounds our total return.
One would be very hard pressed to find any other stock advisory service that can make such a claim. Seeing as how August and September are historically difficult months for market conditions, having the power of custom tailored AI algorithms working 24/7 gives us a huge advantage when market conditions are less than favorable. And while the financial media is trying their level best to scare investors out of the market, my AI platform is on an enviable winning streak with stocks that are enjoying their own individual stealth bull markets. We just closed our last profitable trade in shares of UnitedHealth Group (UNH) for a 21-point gain- or 8.9%- in just over three months. Annualize that kind of performance and the math gets pretty compelling.
What is even more compelling is that we are entering what is arguably the riskiest time of the year for the stock market. My Seasonal Chart shows the probability of a market decline over the next 20 days to be 99% and for the next 30 days to be 72%. That’s as close to a sure thing as my AI system can forecast. So, while the market is enjoying a massive short-covering rally yesterday, I’m working four separate trades to sell into this snap back rally so we will ring the register before the market runs the risk of a late summer swoon.
Selling into strength is always the preferred path to profits and summer rallies are typically few and far between. Market volatility is on the rise as evidenced by the most recent triple-digit swings for the Dow, and one day of headlines suggesting all will be resolved with the China trade war is very pre-emptive, to say the least. One bravado tweet from President Trump that doesn’t afford the Chinese delegation to save face from the upcoming talks will send stocks lower again for sure. This is why the RoboInvestor Portfolio is long on some portfolio insurance in the form of a leveraged instrument that gains rapid value when the market plunges lower on breaking news, such as the Turkish 10-yr bond yields spiking to 21%!
It’s how I manage risk when Wall Street’s A-Team is vacationing in the Hamptons and the B-Team is left to mange the market amid bold headlines and thin trading volume. Having some downside protection is a top priority with maintaining a high level of asset stability when the risk of China trade talks falling apart, a Turkish lira currency crisis possibly evoking capital controls or an Italian bank bomb going off from too much exposure to emerging market debt. It could be any one- or a combination of these and other unforeseen events- that trigger a retest of the recent lows and because it’s the August-September timeframe, it pays to be protected.
And while the market landscape is currently somewhat of a post-earnings season minefield, there are plenty of stocks and ETFs being identified by my AI platform that make the grade for the RoboInvestor Portfolio. We’re batting 1000 for a reason, and it’s not luck.
In fact, we’re long ten stocks with two more being added this weekend for subscribers to buy next Monday. Both are the crème de la crème in their respective sectors and if you want to get in on these two new recommendations and our current picks, go to >>>>>>>>>>>>>>>>> and sign up today. Let the power of Tradespoon’s AI machines cut a clear path to profits for your portfolio and take the guess work out of investing in tricky markets.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
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