AI Buy Signal For Mr. Softie
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Stocks are on the verge of another up week as a result of a monumental rotation out of fixed income and into equities. Most of the market’s 11 sectors traded higher on the week as traders from the soft landing and hard landing camps for the economy saw growth, value, defensive and dividend stocks rally.
The futures market and the bond market are telegraphing a 50-basis point rate hike at the May FOMC meeting, but it would not really surprise Wall Street if the March inflation data released in early April approaches 10% that has the Fed conducting an intra-meeting rate hike. It just depends on the data the crosses that tape over the next three weeks will weigh on this possible scenario.
CURRENT TRADING LANDSCAPE
The bond market is already doing much of the heavy lifting for the Fed as the yield on the 10-year Treasury rises above 2.4%, sending 30-year mortgage rates to the 4.5% range and having a dampening effect on the pace of new home buying and refinancing activity.
The $SPY closed higher 1.5%, at $450, above the 50 and 200 DMA. The value/reflationary ($VTV) closed higher 1.0%, at $148, at the February highs. The technology sector ($QQQ) closed higher 2.2%, at $360, between the 50 DMA and the 200 DMA.
The $DXY closed higher, near the $98, at the June 2020 high. The $TLT closed lower 0.8% and near the 2020 lows. The ten-year yield closed lower at 2.3%. The $VIX closed lower near the 23 level.
The $SPY short-term support level is at $440 (key long-term support) followed by $430. The SPY overhead resistance is at $460 and then $470.
Assuming the geopolitical risks in Ukraine have reached the status quo, it is reasonable to assume that the $SPY February low is set and the pattern of higher highs and higher lows will continue in the next two to six weeks.
I would be a buyer of the low beta stocks into the pullbacks and have a market BULLISH portfolio at this time.
I do not expect the $SPY to post new all-time highs in the first half of this year. There is a high probability that the $SPY main long-term support at $415 is now set but might be retested in the next few months.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $448 level using SPY and the "SELL" signal is at $456 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 $415 and $470 for the next 2-4 weeks.
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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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The Technology Select Sector SPDR ETF (XLK) is an excellent proxy for the tech sector and with a basket of leading stocks that capture the initial attention of investors when they want to get back into the market. The top ten stocks make up about 67% of total assets.
As traders have taken a fresh interest in the tech sector, our AI platform is a huge asset for determining whether the initial move higher can build on itself or whether this is just an oversold bounce that should be sold into. When we apply our AI-driven Forecast Toolbox to XLK, we get a Model Grade “B” rating with a Predicted Resistance price target of $179.23, which implies a solid advance for the share from their current price of $158. This is the kind of price confirmation traders need to stay with a trend.
Traders are much more inclined to trade the tech sector over most other sectors in that the mega-caps are such big weightings in the indexes and drive broad momentum for the market in general. Without the participation of big-cap tech, the market will struggle to make any serious headway. Seeing XLK and other tech ETFs regain momentum is a very bullish development for the market and the long-term primary uptrend.
TRADE OF THE WEEK
Of the stocks in the XLK that are a key barometer to the health of the tech sector, I would argue that Microsoft Corp. (MSFT) is one of the three or four companies where the bulls place their long-term confidence. Their business model is very diversified and positioned in many of the core growth areas that have strong fundamentals.
Microsoft offers the Windows 10 operating system, Azure cloud services, Outlook email, Office 365 security, Microsoft Teams, Skype, OneDrive, Surface computers, Xbox gaming platforms, LinkedIn job market services and is in the process of acquiring Activision gaming software. All the company’s divisions are experiencing strong growth.
2022 revenues are forecast to grow by 18% to $199 billion from $168 billion in 2021, and for earnings to come in around $9.34 per share compared to $8.05 for 2021 according to the consensus of 26 analysts compiled by www.yahoofinance.com.
Our trading service is built around a proprietary AI-driven platform that guides our stock and ETF selection. One of our AI tools is called the Seasonal Chart where the algorithms determine levels of bullish or bearish probability of direction. In the case of MSFT, we get a “Higher” probability reading for the next 20-day period and also for the 40 and 50-day periods.