"Best Oil Shock 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. In light of the turmoil and devastation that has overwhelmed the stock market, there are certain major breakouts in specific asset classes that provide huge profit potential.
Iran is steadily increasing its nuclear arsenal, with a focus on developing more powerful weapons that can strike Israel and other nations it seeks to threaten. On March 5, The New York Times stated that “Russia added a new complication when its foreign minister, Sergey V. Lavrov demanded assurances from the United States that the Western sanctions imposed on Russia over the war did not interfere with Russia’s future trade with Iran."
Mr. Lavrov requested a written guarantee that sanctions ‘‘launched by the U.S. will not in any way harm our right to free, fully-fledged trade and economic and investment cooperation and military-technical cooperation with Iran.” This is a non-starter because sanctions on Russian oil would prevent Israel from doing so. Iran will never be able to develop the ability to launch nuclear attacks on Israel due to the sanctions.
Moving on to China, their one-China policy to retake Taiwan was reiterated this past week, saying the island nation is “not Ukraine” and has always been an “inalienable part of China, China’s foreign ministry said on Feb. 23 (Reuters.com) This comes at a time when China is building up its military presence off the coast of Taiwan.
Adding to the elevated level of volatility, the Wall Street Journal reported on March 8 that “The Saudis have signaled that their relationship with Washington has deteriorated under the Biden administration, and they want more support for their intervention in Yemen’s civil war, help with their own civilian nuclear program as Iran’s moves ahead, and legal immunity for Prince Mohammed in the U.S.," who currently faces multiple lawsuits, one of which goes back to the 2018 killing of journalist Jamal Khashoggi.
Finally, the rate of yearly inflation is still increasing despite the fact that the Fed is still several years behind the curve, which means a quarter-point increase later this month will have little real-world impact for consumers and firms dealing with rapidly climbing prices for almost everything. If the Fed can’t do more to contain inflation, then the economy faces stagflation – high prices and no wage growth. Russia is in a depression, Europe is entering a recession and the U.S. is thankfully sustaining a strong enough growth rate to power through current inflation, but for how long? We live in interesting and volatile times.
CURRENT TRADING LANDSCAPE
Traders are watching to see for any break in the news feed that suggests a cease-fire is pending, which would incite some strong buying. Until then, the selling of rallies has been the drumbeat for the past four weeks. The appetite for trading is very good, but the execution has to be fast as upside moves are quick to evaporate, whereas shorting high-beta stocks has proven to be a steady mode of profit generation.
The $SPY staged an impressive rebound on Wednesday, and closed at $427, at the January lows. The $SPY was up 2.8%. The value/reflationary ($VTV) closed higher 1.5%, at $143, the midpoint between the 200 DMA and the 50 DMA. The technology sector ($QQQ) traded higher 3.5%, at $334, and closed below the 50% retracement from the recent low to high.
The $DXY closed lower, near the $98, at the June 2020 high. The $TLT closed lower 1.0% and near the recent lows. The ten-year yield closed higher near 1.95%. The $VIX traded higher near the 32 levels.
The $SPY short-term support level is at $410 (key long-term support) followed by $390. The SPY overhead resistance is at $445 and then $460.
Due to the escalation of the geopolitical risks in Ukraine, one has to assume that the $SPY January lows will be re-tested again and most likely continue the downward momentum in the next couple of weeks.
I would be a seller of the high beta stocks into the rallies and have a market NEUTRAL portfolio at this time.
I would consider rebalancing portfolio at this time and have an overall market NEUTRAL portfolio. I do not expect the $SPY to post a new all-time high in the first half of this year. There is a high probability that the $SPY main long-term support at the $420 level will not hold. All eyes are on the geopolitical risk in Ukraine.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $418 level using SPY and the "SELL" signal is at $428 for short-term traders.
If you are trading options consider selling premium with May and June expiration dates.
Based on our models, the market (SPY) will trade in the range between $400 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 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 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.
Inflation-Beating Super Stocks
From Vlad Karpel, Founder and Chief Investment Officer of YellowTunnel’s AI Program
Click Here for Inflation Surging Stock Recommendations
Investors everywhere are running scared from the markets. As the highest inflation rate in 40 years is bearing down on us, throwing the markets into a tailspin, some are wondering whether or not to pull their money out for now until the chaos is over.
…and then risk having their savings eaten away. I don’t blame them. Tech stocks… Cryptocurrencies… Pot stocks… almost the entire growth sector plummeted.
Traders have been through a wild ride, and even though the stock market at times got ahead of itself, it keeps falling backward. However, the key to surviving - and thriving - in inflationary times is not by hiding.
It’s by investing more wisely. It’s true that the easy money is gone for now.
It has become a stock pickers market. So, you need a system and a strategy that holds the potential to beat the market and preserve your gains despite the chaos.
Click Here for Inflation Surging Stock Recommendations
My opening commentary regarding the geopolitical situation as it relates to the energy sector argues strongly that crude prices will remain elevated with further risk of supply shocks quite possible. That and the fundamental supply/demand equation that was already skewed to higher prices before the invasion of Ukraine by Russia was firmly in place. This past week WTI crude traded up to $130/bbl in a panic spike and has since pulled back to close out Friday at just above $109/bbl.
One of the most popular trades for the sector is to get long shares of the Energy Select Sector SPDR ETF (XLE). With $39 billion in assets under management, shares trade very liquid, trading on average over 40 million shares per day. The top ten holdings comprise about 77% of total assets – a highly concentrated portfolio.
This trade for XLE sets up well as there is good confirmation from our AI-driven platform where the Seasonal Chart shows “Higher” probability readings for the next 30, 40, and 50-day periods following a short-term bout of consolidation – a very bullish development.
TRADE OF THE WEEK
Within the top ten holdings of XLE, the stock that tops the list is Exxon Mobil Corp. (XOM), one of the top ten integrated oil companies in the world by revenue, but ranked second in terms of earnings power for 2021 according to www.offshore-technology.com.
Exxon is looking to grow revenue by 27% in 2022 to $363 billion and earnings by 37% to $7.40 per share. However, Exxon has been handily beating estimates for the past four quarters and raising guidance along with their stock repurchases.
When we apply our AI platform to XOM, using the Forecast Toolbox, we get a Model Grade “B” rating with a near-time Predicted Resistance price target of $96.44 that is well above the $85 level where the stock currently trades.