A bonanza of profits.
This is what Jonathan “J.R.” Rose and quant pioneer Marc Chaikin are teasing from a new trading super signal they've created called the “Convergence,” which promises to juice profits on every trade by 50% or more.
The Teaser
A trading tool that is going to be the “Rosetta Stone” of the market.
Marc Chaikin is a Greenbull regular, we most recently we reviewed his “100x Starburst Opportunity” Stock and Project Tengu AI Stocks. Jonathan we are less familiar with, but he's a lifelong trader, having started out trading index futures for the Chicago Mercantile Exchange in 1997.
The Rosetta Stone is an ancient monument discovered near the town of Rashid (Rosetta) in Egypt at the turn of the 19th century. It's notable because the decree inscribed on it was written in three languages: Egyptian hieroglyphs, Demotic, and Greek, serving as a sort of ancient translation guide.
It's also where the modern Rosetta Stone language learning software borrows it's name.
Jonathan wants us to think about his and Marc's “Convergence” strategy as a guide as well, but for the stock market.
Is it more likely to lead us down the road to riches or ruin? That's what we're here to find out.
The first thing that sticks out from the nearly two hour-long video presentation is a bold face claim.
95% in 46 days
This is the median gain that the strategy, system, or pure voodoo that is the “Convergence” has supposedly delivered.
We quickly find out how this is possible…through leverage in the form of stock options, which isn't much of a surprise.
The guys claim this is less risky than buying into stocks the good ol' fashioned way:
While also carrying substantially more upside:
This is due to every trade being risk-defined, meaning covered calls (owning the underlying stock) or option spreads (buying multiple options with different strike prices and expiration dates), while having no open-ended tail risk (naked calls).
It's how profits are juiced, but we still don't know what the signal is to find something that is actually worth trading.
The Pitch
All plus five “Convergence” Stocks are revealed in a new report called “Super Signal” Buy List: Double-Confirmed Trades to Buy Right Now.
The report may be a “$299 value,” but accessing it requires a subscription to Jonathan's Advanced Notice premium trading room, which costs $2,500 for the first year ($5,000 annually after that).
Moneyflow + Unusual Options Activity = Convergence
The “smart money” knows something.
This is the fundamental premise behind both Marc and J.R.'s respective key trading signals.
Marc's Moneyflow
For Marc's Power Gauge stock-picking system, which we have reviewed here, the key signal is money flow.
To put it simply, money flow is order flow, which sheds light on what the majority of the money in the market is buying or selling at any given time.
No market signal is on the money 100% of the time, but knowing which way the big institutional orderflow is lining up, is a big tip off.
In Marc's own words:
Money flow is what got my work in Bloomberg terminals and featured on TV
Jonathan's Unusual Activity
Every big market move has an outlier.
J.R.'s signal scans millions of options contracts looking for anomalies. If options action in any given stock is found to be 10x to 50x bigger than normal, it is flagged and subsequently analyzed for a big upcoming move in the stock.
Marc's signal tells us where the money is flowing while J.R.'s let's us know in what quantity. When both are going in the same direction, it creates a double-confirmed “super signal” trigger, and that's when a “Convergence” happens.
The Convergence has apparently been pretty accurate thus far, spotting and profiting from some of the biggest moves in the market:
Now, it's looking to continue discovering winning trades before they happen on a larger scale than ever, promising “a few separate trades that will at least double over the next year.”
Marc Chaikin & Jonathan Rose's “Convergence” Stocks
Five “Convergence Trigger” stock picks.
This is what was promised in the lead up to this teaser.
We already know Ameresco Inc. (NYSE: AMRC) is one, but what about the other four?
I sat through the entire one hour, fifty-seven minute-long video replay of the “Convergence Summit,” which was partly made up of subscriber testimonial quotes, and it must have been edited out of the final cut, because not a single pick was revealed.
However, some internet detective work got us the answers we were looking for.
InvestorPlace's Sunday Digest brief revealed the second “Convergence Trigger” pick as First Solar Inc. (Nasdaq: FSLR). Calling it a “rare business with a fortress balance sheet” in the solar panel industry.
We were also able to unearth a third pick, Quantum Computing Inc. (Nasdaq: QUBT).
Apparently, there is “unusual, concentrated positioning building around this ticker at a time when money is rotating hard out of legacy software and into the infrastructure layer underneath it.”
The last two remain a mystery like bigfoot.
Of the three that we know about, First Solar is the most attractive. Four times more cash than debt, profitable, high return on equity (ROE) of 18%, and selling for 14x current earnings.
Super Profits from a Super Signal?
Options trading activity is at an all-time high.
But when it comes to investing, activity seldom equals results, there is actually an inverse correlation between the two.
So whenever a new retail trading strategy or “signal” comes out, I roll my eyes a bit.
However, despite no published backtest results, just claims of an 81% win rate from 200 recommended trades.
I won't dismiss the “Convergence” outright as it does touch on an important aspect of short-term investing – order flow.
Unlike more esoteric chart-based technical indicators, institutional buying and selling does provide insight into what may or may not be happening inside a business.
Needless to say, institutional trading desks have access to timely info we don't, such as an upcoming merger or sale, a CEO or CFO departure, and they trade on that info with conviction because they know that it is accurate. Orderflow does hint that something material may be up and it is a genuinely useful short-term signal.
Does this make the “Convergence” a sure thing?
Far from it, as even if the “super signal” is accurate, in order to make “super profits” the trade still needs to be executed with surgical precision in a timely manner, with the right sizing, and leverage.
The odds of this happening is lower than a North American team winning a World Cup and this layer of complexity, along with the fact that 90% of retail options traders lose money, is why I can't recommend Marc and J.R.'s “Convergence” trading signal.
Quick Recap & Conclusion
- Jonathan “J.R.” Rose and quant pioneer Marc Chaikin are teasing a new trading strategy they've created called the “Convergence,” which promises to juice profits on every trade by 50%.
- Juicing profits comes from risk-defined stock options, but the “Convergence” trigger is a combination of orderflow and unusually large options activity.
- Instructions on how to apply the “Convergence” super signal and five picks are revealed inside a new report called “Super Signal” Buy List: Double-Confirmed Trades to Buy Right Now. Accessing it requires a subscription to Jonathan's Advanced Notice premium trading room, which costs $2,500 for the first year ($5,000 annually after that).
- We were able to reveal three of Marc and J.R.'s “Convergence” Stocks. They are Ameresco Inc. (NYSE: AMRC), First Solar Inc. (Nasdaq: FSLR), and Quantum Computing Inc. (Nasdaq: QUBT).
- The “Convergence” super signal is new, it has no published backtest results, and it's implementation is far easier said than done.
Have you ever traded based on orderflow as a signal before? Tell us about your experience in the comments.