NEW Crypto Wave
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 2022 year has been anything but dull for traders. Volatility has been elevated with Omicron, trucker strikes, hot inflation readings, a robust earnings season, a possible invasion by Russia into Ukraine, and supply chain bottlenecks that are persisting. Bond yields are pushing higher, the dollar ironically moving lower, crude oil is back above $90/bbl, and rumors of an inter-meeting Fed rate hike are making the rounds.
Quite frankly, aside from St. Louis Fed President James Bullard’s statement Thursday that he would like to see a full 1.0% hike in the Fed Funds Rate by July that triggered a late-day selloff, stocks have been trading pretty well on optimism about Omicron winding down rapidly and life at home and in the business world normalizing in the weeks and months ahead.
Hotels, casual restaurants, airlines, cruise lines, casinos, amusement parks, live venues, and booking agency stocks collectively rallied this past week, where this third time of a breakout rally attempt may be the charm to get the reopening stocks to establish a meaningful recovery trend. Of these travel & leisure sectors noted, the clear leader has been the hotel stocks, some of which are trading at new highs.
The big question for traders to ponder is whether the market can weather the inflation storm and rising interest rates on the back of excellent sales and earnings growth, solid guidance, and pent-up demand. The bullish narrative is that when the Omicron protocols are lifted at ports and distribution centers, supply chains will open up, and inflated prices for just about everything will recede.
TRADING LANDSCAPE
There has been some technical damage done to the Nasdaq and Russell 2000, whereas the $SPY has recovered its key 200 DMA. The $SPY trades right around $449 and trades at the 50% retracement from 2022 low to high, key short-term support. The value/reflationary ($VTV) trades right above the 50 DMA. The technology sector ($QQQ) trades at $358 and just under its 200 DMA.
The $DXY closed flat, at $95.5, below the 50 DMA. The $TLT sold off and closed close to April 2021 low. The ten-year yield closed above 2.0%. The $VIX traded at the 24 level.
The $SPY short-term support level is at $440 (key long-term support) followed by $430. The SPY overhead resistance is at $460.
I do expect volatility to persist, but the pattern of higher lows and higher highs should continue to emerge. I would be a seller of the high beta stocks into the rallies and continue rotating the portfolio into the value stocks ($XLE, $XLI, $XME, and $XLF).
I would consider rebalancing my portfolio at this time and have an overall market BULLISH portfolio. I do expect the $SPY's rebound to continue for the next 1-2 months. I do not expect the $SPY to post a new all-time high in the first half of this year. All eyes are on the PPI data next week.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $440 level using SPY and "SELL" signal is at $454 for short-term traders.
If you are trading options consider selling premium with April and May expiration dates.
Based on our models, the market (SPY) will trade in the range between $430 and $470 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.
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 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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SECTOR SPOTLIGHT
The high level of uncertainty in monetary policy, geopolitics, and the devaluation of fiat currencies continue to support the long-term case for trading cryptocurrencies as an asset class that has huge present and future bearing on global markets. The use of Bitcoin and other cryptos that mesh well with the rise of blockchain platforms is broadening out, even as some countries like China have outlawed the trading and transacting in cryptocurrencies.
Those that profess to be conspiracy theorists will contend that the rise of highly regulated digital currencies is the eventual goal of governments, whereby every transaction can be tracked and traced in real-time. There are real pros and cons to this adoption and will likely be rolled out on a small scale in the next few years, but there will be plenty of push back from those that don’t want the long arm of government to have that kind of AI-based access to every purchase a private citizen makes right down to a drive-through meal at McDonald's.
The only way to trade the actual crypto marketplaces is through Coinbase Global Inc. (COIN), one of the leading crypto exchanges. After trading at $429 in its IPO debut in April 2021, shares of COIN traded down to $162 when Bitcoin corrected to the low of around $36,200 last month and are trading around $200, reflecting how a lot of hype has come out of the crypto space where there is fresh big money interest resurfacing is not only COIN but Bitcoin and the rest of the leading cryptocurrencies.
We do our best technical work when we apply our proprietary AI models to each and every trade. For COIN, our AI-driven Forecast Toolbox shows a very bullish reading for the next six months, with a Predicted Resistance price target of $262. Hence, we can trade with confidence that our AI model is bullish on COIN, which is a strong indicator for the cryptocurrencies themselves.
