Vlad's Magical Open-Sesame Trade
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.
Friday’s employment report disappointed in more than just the soft headline number. It showed twice the hourly wage gains forecast on fewer jobs created, implying stagflation pressure. There is tremendous demand for highly skilled workers and many companies are having to pay 20% more for new hires in specialty jobs compared to a year ago. The job market is undergoing some uneven changes brought on by COVID-19 and it's starting to show up in the data.
On the flip side, the July jobs data was revised firmly higher, making the Fed’s job of trying to formulate a policy statement at the upcoming FOMC meeting on September 22 that much more difficult. Inflation is looking more than just transitory. While commodity inflation ebbs and flows, wage, and services inflation is longer lasting and harder to contain. The concern is the Fed will have to tighten before their full employment objective is reached.
What this unsettling employment report for August does is put further pressure on Congress to pass the infrastructure bill to create thousands of good-paying jobs for much-needed repairs. And I would expect to see some real progress on this front over the balance of September where the passage of the bill comes to be. But it also means that stock picking is at a premium and where the power of AI models in our Weekly Power Trader advisory service becomes so valuable.
TRADING LANDSCAPE
The $SPY continued to lose momentum and reached the $453 level. The value/reflationary stocks led the market today (Energy outperformed). Technology stocks closed slightly lower.
The $DXY has broken above $90.60 resistance and has confirmed its breakout. The next level of resistance is at $94. The $TLT was trading at a 50-day moving average.
Based on the steep correction in the reflationary stocks, strong dollar, and overbought technology stocks, the market will continue the correction in September. The $SPY short-term support level is at $445, followed by $441. The SPY overhead resistance is at $455. I expect the next stage of correction to resume this week or next. I would be a buyer of value stocks on corrections and sell technology stocks on rallies.
I would consider rebalancing the portfolio at this point to be more market-neutral. The second wave of the sell will continue for the next 2-4 weeks. Market corrections are never a one-way trade.
Based on our models, the $SPY can pull back 3-5% from the all-time highs in the next 2-4 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 tomorrow is at $450 level using SPY and the "SELL" signal is at $455 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $425 and $455 for the next 2-4 weeks.
NEW EARNINGS POWER TRADER SERVICE
We recently launched our new Earnings Power 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.
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 positions for 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.
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 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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Labor Day
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*Aggressive Power Trader Portfolio*
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SECTOR SPOTLIGHT
The beauty of artificial intelligence is that it isn’t biased, emotional or persuaded by current events that are fed to our trading psyche. Sometimes when traders have all but written off certain sectors due to negative developments, they get priced to such deep discounts that a case for a technical recovery can be made.
My AI models are flashing some buy signals in the Chinese ADRs and specifically the iShares China Large-Cap ETF (FXI). With $4.95 billion in assets, FXI is a leading market barometer for China’s market. Recent regulatory controls on China’s biggest tech companies by the Chinese Communist Party have weighed heavily on all the Chinese market indexes, shaving upwards of 20% off the February highs.
The top ten holdings in FXI account for 57% of total assets and provide for a good proxy to China’s master plan to convert the economy to a more consumer-based GDP dependent than export-dependent one.
Trading a highly liquid ETF like FXI eliminates single stock risk and captures bullish fund flows into the sector on a broad basis. In addition, the options chain for FXI is very active and provides for tight bid/ask spreads.
When we apply our AI-driven Forecast Toolbox to FXI we see that over the next two weeks, the shares have the potential to trade up to the Predicted Resistance price point of $46.02 or about 11% higher. The Model Grade “C” rating is neutral given that the shares rallied from $38 to $42 this past week, but we want to buy the next pullback when our signals indicate to do so.
TRADE OF THE WEEK
Alibaba Group Holding Ltd ADR (BABA) is a feature name in FXI and the second-largest holding. The company represents the purest play into the secular consumer trend in China as the largest Internet retailer. BABA also has a vast business-to-business presence as well in addition to cloud computing services, digital media, and innovation platforms for start-up businesses. Some liken BABA to the Amazon of China.
Revenue for 2021 is estimated at $920 billion and to grow by 20% in 2022 to $1.11 trillion. Earnings for 2021 are forecast to come in at $6.30 per share and grow to $8.30 per share in 2022. At its current price of $171, the stock trades at 27 times 2021 earnings and 20 times 2022 forward earnings. Definitely cheap on valuation relative to its peers around the globe.
Shares of BABA traded to the low end of the major support level set back in 2019 and will likely trade in a wide band, for the time being, creating an excellent trading scenario for us. Our AI-based Seasonal Chart is showing strong “Higher” readings for the next 90 days, giving us the kind of confirmation we want to trade off of.
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 Alibaba. 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.
Considering the choppy 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 don’t trade without market-proven AI tools.
The consistent performance of our services is just incredible. Our historical stellar performance is made possible by being right on 86.38% of all trades that we made with an average profit of 35.40% 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.
Traders seeking the most-timely directional trading strategies where historically over 86% of all trades are profitable to come alongside the Yellow Tunnel community and make one of our services your go-to AI trading platform for no-excuses performance.
Our AI platform crunches and analyzes thousands of proprietary performance indicators to help identify the next big trades to supercharge your portfolio!
Go to our website at www.yellowtunnel.com and make one of our services your default trading system where the AI that powers my all-world, proprietary platform, can help you make 2021 the best year on record for your trading portfolio.