Flash Alert! One ETF Triggers AI Buy Signal

March 19, 2020
By Vlad Karpel

RoboStreet- March 19, 2020

Looking For Any Signs Of Market Green Shoots

Following the daily dose of Coronavirus news conferences by President Trump and his healthcare-crisis team, the is some fresh and more optimistic chatter about treatments and therapies that are on all-out fast forward development. At the same time, Congress has approved up to $1.3 trillion in bailout assistance to particularly hard-hit industries, small businesses, and individuals that fall under specific income levels. 

The markets continued the sell-off, as all of the markets are overwhelmed with the spread of Coronavirus, and the inability of fiscal stimulus to cure the virus. Despite the short-term rally on Tuesday, the market continues to face uncertainty due to the inability to predict the duration of the spread of Coronavirus.  

 “I’m investing my own money in each and every stock as my AI platform identifies.”

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.

Click Here – To See Where I Put My RoboInvestor Money

Equity futures have been halted on three separate occasions when the market trades down by 7%, tripping circuit breakers and there’s talk that the exchanges will shorten trading sessions starting next Monday. 

On one hand, we have good news that the spread of the virus has significantly slowed down in China and South Korea. On the other hand, the rate of the spread of the virus in the United States and the rest of Europe continues to go higher. 

The SPY tested the $230-240 level, which is the December 2018 low, and a full 50% retracement from the peak of 2000 and 2007 bull cycles. This will take the market drop close to 33%, which is an average drop during the economic recessions.

I expect the market volatility and the five percent daily market moves to persist.  At this point, I do not believe we have set the bottom and I would wait for 2 days for markets to make higher highs and higher lows before the bottom can be established.   

However, all asset classes are oversold and I believe the worst part of sell-off is behind us. Please watch the support level on SPY, as the markets briefly traded below the December 2018 low. The market (SPY) will trade in the range between $220 and $302 levels for the next 4 weeks.    

I expect short term rebound to start this week but it will be short-lived and 230-240 level will be tested again. I believe the market will recover back to $315 level as we approach summer as the spread of the virus will slow down in Europe and the rest of the world. I know this is a very stressful time for the investor, but when the snapback rally takes hold, it will provide investors an opportunity to reposition portfolios on strength. 

Speaking of strength, one of the most sold off sectors in the past month has been the semiconductor sector, which was probably the strongest of all sub-sectors of the rally leading up to the recent correction. Shares of the VanEck Vectors Semiconductor ETF (SMH) are the most widely traded and most popular ETF with both professional and retail investors. This ETF owns the best-of-breed basket of semiconductor stocks. 

I want to share a couple of encouraging pieces of data for SMH. The first is a three-year chart of SMH going back to April 2017. The black line is the 200-week moving average that was barely breached this week by a couple of points before catching a bid. From the recent all-time high of $154.03 to Thursday’s low of $95.37, the drop amounts to 38.3%.

The second piece of data, and in my world, the more important, is how SMH is measuring up on my AI-driven platform. In just the past couple of days, the Tradespoon Seasonal Chart is showing no less than four “higher” probability readings for the next 20, 30, 40 and 50-day periods. At a time when the VIX is spiked to 85.0 with investors irrationally selling off their most blue-chip defensive stocks, the chip sector is flashing green for the first time in a month after getting fully crushed. 

Now, I’m not saying to go out and back up the truck and pile into SMH. But what I am recommending is that if you’re not a member of RoboInvestor – join right now. You do not want to miss out on when issuing a buy on SMH and other oversold stocks and ETFs. I need confirmation from the market to steer clear of false rallies. But when my indicators give me a green light – there’s going to be a lot of money to be made.

Don’t try to manage a recovery strategy without the cutting edge of AI technology that removes a huge degree of uncertainty as to what to buy and when to buy it. I do that for you and I invest alongside you in every recommendation. I make money for my RoboInvestor members and myself 86.72% of the time I put capital to work, and so should you. Make RoboInvestor your best trade of the week and set yourself up for maximizing what will be the mother of all snapback rallies. Make the move, and let’s make some money! 

 “I’m investing my own money in each and every stock as my AI platform identifies.”

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.

Click Here – To See Where I Put My RoboInvestor Money

*Please note: RoboStreet is part of your free subscription service. It is not included in any paid Tradespoon subscription service. Vlad Karpel only trades his own personal money in paid subscription services.  If you are a paid subscriber, please review your Premium Member Picks, ActiveTrader, MonthlyTrader, or RoboInvestor recommendations. If you are interested in receiving Vlad’s personal picks, please click here.

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