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.
A rough week for stocks as volatility soared following a triple dose of troubling headlines that set into motion a large-scale risk-off atmosphere for the market as a whole and especially high PE growth stocks. The omicron variant has now spread to the U.S., Fed Chairman Jerome Powell doubled down on his surprising pro-taper commentary and jobs report that came in light of the forecast.
Upcoming inflation data in the form of CPI on Dec. 10 and PPI on Dec. 14 only compound the uncertainty that feeds nervous trader sentiment. As a result, the S&P and Nasdaq are testing key technical levels in what is a definite risk-off market. So, much was going right heading into Thanksgiving – energy prices had faded well off their peak highs, Pfizer had announced a new pill that would treat Covid-19 symptoms, Congress had passed the infrastructure bill and third-quarter earnings were better-than-expected for much of the S&P 500 despite supply chain shortages.
There is a late-week flight to safety in the bond market, the 10-year Treasury yield falling to 1.36% in a remarkable move considering the Fed’s modified fiscal policy to end QE and start raising short-term rates. But it’s not about today’s move lower in bond yields, but rather about the perception of higher rates in the future that look inevitable given the Fed’s rhetoric.
Timing rallies and pullbacks are crucial to astute asset management and can be highly volatile and unpredictable as we can see from what occurred Friday. This is exactly where the power of our AI models in our advisory services becomes so valuable in identifying those ETFs and stocks with which to trade.
The $SPY now sits along with a key technical level - its 50-day moving average. The value/reflationary stocks led on the week and closed right below the 50-day moving average, $VTV at $140. The technology stocks underperformed, save for a handful of semiconductor stocks.
The $DXY traded flat closed at $96 above key breakout at $94.5. The $TLT traded higher, at $155 and testing the key overhead resistance not seen since January. The $VIX traded sharply higher to $34, implying an oversold short-term condition.
The $SPY long-term support level is at $444 followed by $426 (low probability level at this point). The SPY overhead resistance is at $468. Volatility can persist for the next couple of weeks.
I would consider starting to start accumulating reflationary/value stocks ($XME, $XLI, $XLF, $XLB, and $XLE). I expect the market to pull back further $QQQ can sell off further, in the next couple of weeks (5-10% from the market top) and then start rebounding toward the end of December.
I would consider rebalancing my portfolio at this time, raising cash, and having an overall bullish portfolio.
If you are trading options consider selling premium with February and March expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $445 level using SPY and the "SELL" signal is at $457 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $445 and $480 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.
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.
Signals have historically averaged over 86% 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 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.
Today is the perfect time to reposition your portfolio and trading strategy
Dear Fellow Trader,
2021 is almost in our rearview mirror, and as we look ahead we wonder: Is this a good time to start trading?
You see, there are so many reasons to not trade on the stock market. And the omicron breakout, inflation fears, supply chain issues, and even the continuing delta pandemic brought plenty of its own reasons to the table this past week.
With the chaos that ensued from January 2020 to today (December 3, 2021, we had over 1075 winning trades (86% winners*).
And now may be the perfect time to start to reposition your holdings and Dynamic Power Trader is the perfect tool for the job.
The renewed focus on Covid-19 puts the biotech and healthcare sectors squarely in the sights of traders looking to seize on the newfound attention to fighting the spread of the omicron and delta variants. The iShares Biotechnology ETF (IBB) has been under pressure for the better part of the past two months after it was thought the pandemic had been arrested and the fight against Covid was being won on many fronts.
The top 10 holdings in IBB account for about 51% of total assets with a few holdings among those companies leading the vaccination efforts with research and products.
Extreme selling pressure makes it difficult to determine where to step in and buy assets at a steep discount without feeling like it’s trying to catch a hot knife. This is where our proprietary AI tools become so valuable. The AI-driven Seasonal Chart is showing a “Higher” technical reading for the next 10 and 20-day periods, which gives us a keen insight as to where we can expect some near-term technical strength to emerge.
When it is so easy to let the loud noise of the financial media fan the flames of fear, there are always solid trades based on real-time AI crunching data to consider when using the right tools to ferret out opportunities that have highly attractive risk/reward profiles and trading on sale relative to recent prices.
TRADE OF THE WEEK
For traders looking for single stock recommendations that are key players in the world of vaccines, then look no further than Modena Inc. (MRNA). The company’s RNA platform allows for the rapid development of vaccines to address new strains and variants to where drug candidates can be expedited through the FDA process in short order. The company is already working on a new vaccine for omicron.
According to Yahoo Finance, Moderna is set to earn $25.76 per share based on the consensus of 13 analysts. This puts the current PE of Moderna shares at just under 12x and an attractive valuation for a company enjoying hyper top and bottom-line growth.
Trading MRNA has been tricky following a massive run-up that peaked in early August of this year. Since then, the chart shows an erratic pattern that culminated in two big stair steps down moves to send the stock below its 200-day moving average before recouping on the omicron headlines.
After spiking back up to $375, the stock is undergoing some back and filling, where a good long-side trading opportunity is setting up beautifully.