$SH: Stocks Set To Slide

Greetings, fellow traders and galactic explorers,

In the wake of a week brimming with key earnings, retail data, and market insights from the latest beige book, our book club rendezvous provided a refreshing twist – a cosmic escapade fueled by the pages of "The Hitchhiker’s Guide to the Galaxy" by Douglas Adams. Held at a unique location fitting for the frigid Chicago weather we were experiencing, our book club held its latest talk between sessions of steamy saunas and bristling cold plunges. Amid the swirling vapors of a Turkish bath, our discussions ventured beyond earthly matters into the satirical realms of Adams’ intergalactic adventures.

Adams, in his whimsical narrative, navigates the destruction of Earth with two unlikely survivors, weaving a story that satirizes our own earthly absurdities – from police brutality to bureaucratic entanglements. The author's mastery lies in presenting fantastical technology, mirroring real-world scientific concepts with a touch of humor and imagination.

Yet, what does this interstellar journey have to do with finance and trading, you ask? Much like the protagonists seeking meaning in the cosmos, traders seek answers within the complexities of the stock market. As the book playfully describes the 'Infinite Improbability Drive,' so too does the market appear powered by unpredictable forces. However, hidden within this chaos are discernible patterns.

The parallels between the cosmic musings and financial exploration become evident when we consider the quest for the meaning of life as akin to the search for the secrets of successful trading. The market, much like Adams' whimsical inventions, has correlations and causations waiting to be unraveled. Understanding these intricacies is akin to deciphering the subtle answers hidden within the pages of the book.

In our pursuit of the financial 'meaning of life,' we find that while the market operates with its own version of the 'Infinite Improbability Drive,' there are underlying patterns waiting to be deciphered. Recognizing correlations and understanding causations are the hallmarks of adept traders – the true hitchhikers of the financial galaxy.

So, dear readers, as we bridge the cosmic and financial realms, remember that within the absurdity lies an opportunity. As you explore the intricacies of the market, may you decode the patterns that others might overlook? In the vast expanse of financial knowledge, there is a beauty waiting to be unveiled – a beauty that connects the quest for meaning with the pursuit of profitable trades.

May your financial journey be as enlightening as the quest for the meaning of life itself.

Recent Trade Review

In our live trading room this week, guided by YellowTunnel's powerful A.I. algorithms, we executed another winning trade. On Tuesday, the iShares Russell 2000 ETF ($IWM) presented an opportune moment to go SHORT, as identified by YellowTunnel's Dynamic Power Trader (DPT) model. Watch the live action in our Tuesday recording here.

Our strategic move to go SHORT on $IWM, detailed in the recording, showcased the effectiveness of YellowTunnel's insights. The company behind $IWM, iShares Russell 2000 ETF, played a key role in this financial narrative.

This success underscores the synergy between human intuition and technological prowess put at the forefront of YellowTunnel’s platform. As we navigate the markets with YellowTunnel A.I., we remain committed to sharing our experiences and successes with you.


As the trading week unfolded, the market was a theater of dynamic shifts, with a spotlight on retail data, key earnings, and insights from the latest beige book. In this turbulent journey through Q1 2024, the focus lingered on the latest SPY levels, sparking discussions about its rally potential and short-term support levels.

Looking at our latest forecast, the $SPY rally might encounter a cap within the $470-490 range, projecting short-term support between $430-450 in the months ahead. Amidst these deliberations, the market hungered for a catalyst to propel it higher. The prevailing sentiment suggested an expectation of short-term pullbacks, yet the pattern of higher highs and higher lows remained a consistent theme, echoing the belief that as long as signs of recession were absent, the market would continue its upward trajectory. For reference, the SPY Seasonal Chart is shown below:

A prevailing majority anticipated lower yields in the first half of 2024. However, a deviation from this expectation could signify a prolonged period of higher inflation and delayed interest rate cuts until the second half of 2025, a factor not fully factored into current market evaluations. The consensus among market participants leaned towards the Federal Reserve abstaining from further rate hikes in the current year and the next, with a high probability of initiating rate cuts in the first half of 2024 – a narrative that painted a bullish picture for the market. A challenge to this narrative, especially concerning the 'Magnificent 7' stocks, was poised to trigger sell-offs.

The week commenced with notable market volatility. Apple ($AAPL) found itself at the 200 DMA, while Nvidia ($NVDA) broke out to all-time highs – a surge that often proves fleeting. Tuesday witnessed a decline prompted by Federal Reserve Governor Christopher Waller's remarks on potential rate cuts, injecting uncertainty into the timing of these cuts speculated to be as early as March. Waller's focus on inflation control set the stage for possible rate cuts, adding a layer of anticipation to investor strategies.

Spirit Airlines faced headwinds as a federal judge blocked its proposed merger with JetBlue Airways, resulting in a substantial drop in Spirit’s shares. Boeing experienced its first downgrade since a Jan. 5 incident involving a 737 MAX 9. Oil futures remained stable despite geopolitical tensions, with OPEC maintaining its 2024 oil demand growth outlook at 2.2 million barrels per day.

The retail data for the week emerged as a compelling narrative, offering a glimpse into the resilience of consumer activity despite the prevailing economic landscape. Government data revealed a stronger-than-expected surge in U.S. retail sales for December, concluding a year marked by robust consumer spending. The Commerce Department reported a 0.6 percent increase in sales, reaching $709.9 billion, surpassing November's 0.3 percent rise. Contrary to expectations of weakened consumer demand due to elevated interest rates, the retail sector showcased a steadfast performance, attributed in part to a robust job market that bolstered spending throughout the year. The juxtaposition of increased interest rates and sustained consumer spending underscores the intricate dynamics shaping the trajectory of the U.S. economy.

Wednesday saw a slip in stocks following hotter-than-expected retail sales, raising concerns about a potential delay in Federal Reserve interest rate cuts. Weaker-than-expected GDP figures from China further impacted market sentiment. However, the resilient performance of U.S. retail sales for December defied expectations of weakened consumer demand, showcasing a robust consumer activity fueled by a steadfast job market.

The latest insights gleaned from the Beige Book offered a comprehensive understanding of economic patterns amidst the fluctuating market conditions. Despite the minimal impact on Treasury yields, the Beige Book release became a focal point following stronger-than-expected economic data. This multifaceted document, compiled from various Federal Reserve districts, provided a nuanced perspective on economic activity, offering valuable insights into the health of different sectors. While the market responded to robust retail sales data, the Beige Book's influence on Treasury yields indicated its role as a key player in shaping market sentiment. As traders navigate the complex financial landscape, the Beige Book data acts as a compass, guiding them through the intricate patterns and trends that define the current economic terrain.

Thursday marked a positive trend, particularly in the tech sector, driving gains in the Nasdaq Composite. Atlanta Federal Reserve President Raphael Bostic hinted at potential rate cuts in the third quarter, adding to the volatility triggered by hotter-than-expected CPI from Britain and unexpected U.S. sales data. The tech sector experienced a reversal, small caps continued their downward momentum, and growth in tech stocks like $QQQ reversed, resembling a double top.

Various indicators, including the 10-year yield and $DXY, rebounded from oversold conditions, potentially influencing market trends. Oil experienced a rebound, unbothered geopolitical risks in the Red Sea. Bitcoin underwent a significant reversal, signaling a potential peak in the risk-on trade, while gold reversed its trend due to a dollar rebound during the week.

Discover Financial Services faced challenges, falling 11% after reporting an elevated charge-off rate and missing analysts’ estimates. Spirit Airlines plummeted 32% following a blocked merger with JetBlue Airways, leading to a downgrade and intensifying challenges. On a positive note, Taiwan Semiconductor Manufacturing saw a notable increase, expressing optimism about revenue growth, and Nvidia contributed to the positive momentum in the semiconductor sector.

As we step into the upcoming trading week, the nuanced landscape of interest rates, particularly Governor Waller's remarks on potential rate cuts, adds anticipation and volatility to the market environment. Traders remain vigilant for signals from the Federal Reserve, knowing that these insights can significantly influence market sentiment and guide investment strategies in this ever-evolving financial odyssey.


As we set our sights on a strategic sector for the upcoming trading week, a notable contender emerges, presenting compelling opportunities for traders seeking to navigate the current market dynamics. This sector has been carefully chosen based on the intricate interplay of retail data, economic insights from the Beige Book, and the overarching trends shaping the financial cosmos. Our focus on this particular sector reflects a deliberate move to capitalize on emerging patterns and position ourselves advantageously in the evolving landscape. 

The sector in question presents a unique avenue for traders to explore, providing a potential hedge amidst the nuanced uncertainties that define the current trading environment.

Inverse ETFs, such as the ProShares Short S&P 500 ETF ($SH), hold inherent value during times of market uncertainty. These financial instruments provide traders with an avenue to hedge against potential downturns in broader market indices. By offering inverse exposure to the underlying index, in this case, the S&P 500, they allow investors to profit from market declines. In periods of heightened uncertainty, where economic indicators, geopolitical events, or changing narratives may impact traditional investments, inverse ETFs act as a strategic tool to balance portfolios and mitigate risk. The ability to profit from market corrections positions inverse ETFs as valuable assets, offering traders a means to navigate uncertainties and safeguard their investments in dynamic market environments.

TRADE OF THE WEEK - $SH: Stocks Set To Slide

In this week's Trade of the Week, we turn our attention to an intriguing opportunity – the purchase of the ProShares Short S&P 500 ETF ($SH). As the market experiences undulating movements, $SH emerges as a strategic choice, offering a hedge against potential downturns.

The ProShares Short S&P 500 ETF seeks to provide daily inverse exposure to the performance of the S&P 500 index, making it an attractive option in the current market conditions. With signals of short-term pullbacks, questions about sustained inflation decline, and the anticipation of potential rate cuts, $SH becomes a prudent choice for traders looking to safeguard their positions.

Why is now the opportune time for an inverse ETF like $SH? The answer lies in the delicate balance of market forces. Amidst discussions of potential rate cuts, uncertainties in interest rate trajectories, and market participants questioning prevailing narratives, $SH stands out as a valuable hedge. As we witnessed shifts in various sectors, from the tech industry to small caps, an inverse ETF provides a strategic shield against potential market downturns. The upcoming week presents an opportune moment to execute this trade, aligning with the insights gleaned from the latest retail data, Beige Book analysis, and the predictive power of A.I. models. Just take a look at our 10-day Predicted Data:

By incorporating $SH into our portfolio, we position ourselves strategically to navigate the peaks and valleys of the market, ensuring a resilient and well-protected investment strategy.

This week, I’ll be adding ProShares Short S&P 500 ETF ($SH) to my portfolio!

And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:

The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 84.97% of all trades that I made, with an average profit of 37.62% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.

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, the proprietary platform, can help you make 2024 the best trading year of your portfolio yet!

As always, remember to conduct thorough research and consider your risk tolerance before making any investment decisions.

One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:


Wishing you a week filled with resilience, growth, and prosperous opportunities!