Vlad’s Big Dip Trade
Power Trading and Markets – May 28, 2021
Vlad’s Big Dip 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.
The market has levitated higher on light volume in hopes of an infrastructure package getting through Congress and improving Covid-19 data that has provided some momentum for the reopening of the economy. While this is all well and good, there are bigger forces in place that could easily bring about a second wave of selling similar to what we saw in early May, and I’ll address this further in today’s blog.
CURRENT TRADING LANDSCAPE
Most of the 11 sectors that make up the total market are in short-term overbought territory and due for a normal technical pullback.
The $SPY continues to trade in the range between $410 and $425. Technology stocks underperformed and reflationary stocks led the market for the week.
The $DXY is reaching oversold levels and due for a rebound. The $TLT continues to trade higher. Short term the $SPY key support level is at $403-$410. The SPY overhead resistance is at $423. Even if the $SPY can trade above the $423 level, the market can only make incremental highs.
I would consider rebalancing the portfolio at this point to be more market-neutral. I expect the second wave of the sell-off to restart as early as this week or next.
Based on our models, the $SPY can pull back 10-15% from the all-time highs in the next 2-6 weeks. If you are trading options, consider selling premium with September and October expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $416 level using SPY and the "SELL" signal is at $422 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $388 and $425 for the next 2-4 weeks.
NEW WEEKLY DYNAMIC POWER TRADER SERVICE
We recently launched our new Dynamic 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.
Our Weekly Power Trader service continues to power up great trading profits. Each week on Sunday, 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.
Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick. We use a target gain of 2% for stocks and stop as 2% of the stock price.
Signals have averaged over 86% accuracy in my live trading since inception. Sometimes we hold positions for 2-5 days by using options (selling OTM BULLISH PUT 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.
SECTOR SPOTLIGHT
As the market will struggle to make any significant highs without clarity on Fed policy and further government stimulus, it’s my view that this light-volume rally will fade. But forget my opinion. My AI models are signaling that the second wave of selling is highly probable over the near term. As the dollar is set up for an oversold rally, it would pressure most of the reflation stocks, primarily the deep cyclicals that have been all the rage of the past month.
Our AI-driven Seasonal Chart is flashing a “Lower” reading for SPY over the next 20, 30, 40, and 50-day periods. This is an extremely bearish reading and should be warranted, especially with the VIX trading back down to 16.0 where it spiked from in the last market blow-off. When I get this kind of AI readout, it’s a big red flag.
The further correction in cryptocurrencies has more room to deteriorate before a recovery can be expected. There is extreme headline risk in Bitcoin at present, and what’s bad for Bitcoin is bad for the entire crypto space. Hence, as inflation worries mount, fears of another taper tantrum build, and the crypto market further buckles under global regulatory pressures, the dollar should trade higher in a “risk-off” rotation.
At Weekly Power Trader, we apply our custom proprietary AI algorithms to every trade, giving us a serious edge on how and when to trade stocks and ETFs. Identifying how best to play the volatility trade is what creates opportunity in the next week or two. The market doesn’t have to completely break down to profit from it. It just needs to trade in a wider range or take SPY down more than 5%. Both scenarios are probable as is being predicted by our AI models.
TRADE OF THE WEEK
Taking a bearish position in the S&P 500 can take on many forms, but what makes good sense for traders looking to establish a non-leveraged position, they should consider buying the ProShares Short S&P 500 ETF (SH). This ETF trades one-for-one against the SPY that provides for a great portfolio hedge or directional trade for taking advantage of market corrections.
The high for SPY of $422.85 was on May 7th, followed by a 10-day pullback and the current push back up to this previous high, again on light volume. I keep harping on light volume, because it means the rally lacks institutional conviction. In fact, there is about $3.8 trillion in institutional cash sitting on the sidelines, looking for the same summer sell-off we are.
It should be of no surprise that in the Seasonal Chart to SH, we get four “Higher” readings for the next 20, 30, 40, and 50-day periods.
Assuming our AI model is correct, the current entry point of around $15.70 for SH looks very timely, especially when the second-quarter earnings season is at least six weeks off.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like SH. By being a member of Weekly Power Trader, it’s these kinds of opportunities that our tailor algorithms provide our members to look forward to every day they put their risk capital to work on both long and short positions.
Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are green-lighted by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested as well.
Trading Thoughts: 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 and allocate no more than 5% of trading capital to any single trade.
I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position for less than one day. I personally look to enter a position at the predicted LOW (BUY) price or yesterday's close price. For Weekly Power Trader, my stop loss for stocks is 2% and my target gain is 2%. I target 75% accuracy using these signals.
Through the Weekly Power Trader service, 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.
Our services delivered profitable trade opportunities throughout May for our members. Considering the mid-month market pull-back this short-term performance is what makes our hard work so gratifying. We’re ringing the register all the time and that is why serious traders don’t trade without market-proven AI tools.
The consistent performance of our services is just incredible. Our 2021 YTD stellar performance is made possible by being right on 86.09% of all trades with an average profit of 35.54% per trade. To my knowledge, my 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 service – Weekly Power Trader, Aggressive Power Trader, or Dynamic Power Trader, 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 if they need to be viewed at a later time.
Traders seeking the most-timely directional trading strategies where over 86% of all trades are profitable should take action and come alongside the Yellow Tunnel community and make Weekly Power Trader, Aggressive Power Trader, and Dynamic Power Trader, your go-to AI trading platform for no-excuses performance.
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Go to our website at www.yellowtunnel.com and make the tone of our services your default trading system where the AI that powers my all-world, always thinking platform and make 2021 the best year on record for your trading portfolio.