QQQ Trade Alert: Easy Way To Short
Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness, and trading profits.
Equity markets took it on the chin this past week with Friday’s up session underscored by a much weaker than forecast consumer sentiment reading that raises the specter of the Fed dialing back the level of their hawkish monetary policy directives. Inflation remains stubbornly high as reported by both the CPI and PPI data showed.
The USDA is forecasting a deficit for wheat crops for 2022 and 2023, prompting fears of shortages re-emerging. So, even if consumer spending pulls back, there are some embedded problems with sufficient supplies of food and energy that stokes concerns of stagflation overriding the economy going forward.
There is also a growing concern that China’s economy is slipping into a recession which could weigh on U.S. economic growth. The dollar is trading at new multi-year highs that will have some impact on earnings from U.S. multinational companies that do over 50% of their business outside the U.S. China is moving to enact measures to reinvigorate growth and time will tell if it is effective as they work through the Covid lockdowns. It is a lot to take in for traders, but uncertainty creates opportunity!
To this point, I can’t emphasize how vital it is for blog readers and members of the Yellow Tunnel community to keep referring to our Live Trading Room so as to maintain a close tie of how our AI platform is navigating us in and out of select trades. It’s FREE and I want highly encourage everyone to sign up to the Live Trading Room and keep checking in throughout the trading day.
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I also want to emphasize to traders how vital a stop-loss discipline is to winning and being successful in an unforgiving market. We employ specified stop-loss instructions with every trade. The buy and sell programs controlled by high-frequency related algorithms can create great profits or cause sudden losses, so it is imperative to maintain an element of controlling risk with each trade.
CURRENT TRADING LANDSCAPE
The closely watch Relative Strength Index (RSI) fell to 28.0 on Thursday, a lower level than in March 2020 (30.0) and in Q4 2018 (37.0), indicating an extreme oversold condition for the major indexes. This past week witnessed two 90%+ down days, meaning over 90% of all stocks were trading lower during two separated sessions. That’s rare.
The good news is the yield curve reverted back to where the 2/10 Treasury spread is back up to 31 basis points, implying a recession is not imminent. WTI crude is trading back above $109/bbl as of early Friday, which is sure to keep gasoline prices up heading into the summer driving season.
As of Thursday’s close, the $SPY closed lower 0.1%, at $392, intraday testing the 20% correction territory. The value/reflationary ($VTV) closed higher 0.17%, at $138, below the 200 DMA. The technology sector ($QQQ) closed lower 0.2%, at $291, testing the 50 percent retracement from the pandemic low to high.
The $DXY closed higher, near the $104.5 level, breaking the December 2016 high. The $TLT closed lower by 0.19%, at $118, and below the July 2019 lows. The ten-year yield closed lower at 2.88%. The $VIX closed lower, near the 31 level.
The $SPY short-term support level is at $385 followed by $380. The SPY overhead resistance is at $396 and then $404.
I would be a seller of any rallies in the market and have a BEARISH portfolio at this time.
The "BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at the $382 level using SPY and the "SELL" signal is at $396 for short-term traders.
If you are trading options consider selling premium with September and October expiration dates.
Based on our models, the market (SPY) will trade in the range between $350 and $430 for the next 2-8 weeks.
NEW PROFIT ACCELERATOR TRADER SERVICE
We recently launched our new Profit Accelerator Trader service that we at Yellow Tunnel are very excited about. Each week, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
This new service is special because 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 85% 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 as a bearish signal.
How To Use Our Signals
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 the 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 an OTM Put (strike less than 100) with an option BID price close to $0.5.
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SECTOR SPOTLIGHT
As per my opening comments, the market is struggling to find a tradeable bottom and with each rally attempt, fund managers are lightening up on growth stocks with some of the heavyweight mega-tech stocks breaking down after holding up fairly well throughout the current correction of the past four months. That has changed, and now the rolling correction is hitting up against the inner sanctum of the tech sector.
Shares of Invesco QQQ Trust (QQQ) represent the majority of key stocks within the tech sector that matter most to the market. Technology represents roughly 19% of the total assets that make up the S&P 500 and the top ten holdings within QQQ account for just over 52% of fund assets. That’s pretty concentrated not only for the Nasdaq but for the market as a whole.
When we apply our proprietary AI platform to QQQ, we get a reading where the Predicted Resistance is up at around $299 whereas the Qs traded Friday, with Predicted Support down at $255, representing some meaningful downside. Bear market rallies can be violent, as we’ve seen on occasion this year, but they quickly shrivel with a resumption of the primary downtrend until valuations become more compelling in a slowing economy beset by high inflation.
TRADE OF THE WEEK
This week’s pick, ProShares Short QQQ (PSQ), is the inverse ETF that is an easy way to short our Sector Spotlight security highlighted. Traders are getting an excellent oversold bounce in the Nasdaq 100 that should provide an attractive entry point for shorting the QQQ into strength.
Due to the extreme oversold technical condition, the market could experience a 2–3-day rally after getting hammered so hard, but looking at the charts of Apple, Alphabet, Amazon, Microsoft, Meta Platforms, and other top holdings, all I see are busted chart patterns where downside risk remains high.
When we apply SH to our AI-driven Forecast Toolbox for the near term, we get a Model Grade “A” rating with a Predicted Resistance price target of $16.37 which is 19% higher than where PSQ currently trades. A move to $16.37 would be a new 52-week high and imply a new low for QQQ. Hence, with each oversold bounce, investors can leg into PSQ and protect their portfolios from material downside risk, or just put this trade on for potential short-term profits.
Our AI indicators will signal in the next week when we should buy into this trade on a forecasted minor pullback. This is where our AI tools are so crucial in determining precise entry and exit points.
I’ll be looking to trade PSQ this week if downside momentum picks up speed and volume.
We tie our Tradespoon Live Trading Room to help you manage the current inflationary wave. And we update our closed positions daily. Our AI platform works 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 trade ideas 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 the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
Considering the volatile landscape of late, we’re taking advantage of market dislocation and valuation distortion. We’re striving to help our members ring the register all the time and this is why serious traders should not trade without checking in with market-proven AI tools.
The consistent performance of our services is just incredible. Our historical stellar performance is made possible by being right on 85.11% of all trades that we made, with an average profit of 36.98% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind that stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.
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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Have a wonderful week ahead, continue to embrace the people of Ukraine in your thoughts and prayers, and let’s create some meaningful wealth together in 2022.