AI-Powered Success: Home Depot’s Winning Strategy
A Disappointing Dinner at Sushui: Where Did Respect Go?
Last weekend, I decided to treat myself to a quiet dinner at sushui, a local sushi spot I’d heard good things about. I was craving some expertly rolled maki and a calm evening out. What I got instead was an experience that left me shaking my head—not just at the service, but at what it might say about the generation coming up behind us.
Our waiter was a young guy, probably in his early twenties, with the unmistakable markers of Gen Z: earbuds dangling, a slightly disheveled vibe, and an air of casual detachment. At first, I chalked it up to youthful nonchalance—nothing a little focus couldn’t fix. But as the meal progressed, it became clear something was off. His eyes were glassy, his movements sluggish, and there was a faint whiff of marijuana clinging to him. I’m no prude, but when you’re waiting tables, shouldn’t you at least try to show up sober?
We placed our order—simple enough: a spicy tuna roll, some edamame, and a sake to share. Ten minutes later, he dropped off a plate of California rolls and a soda. I politely reminded him of our actual request. He blinked, mumbled something about “vibes,” and wandered off. Strike one. Another fifteen minutes passed, and he returned with miso soup and—no joke—a beer. At this point, my friend and I were exchanging looks, half-amused, half-annoyed. I tried again: “Hey, we ordered sake, not beer, and where’s the tuna roll?” He stared at me like I’d asked him to solve a calculus problem, then shrugged and said, “Oh, yeah, my bad,” before drifting away again.
By the third wrong delivery—this time a lukewarm carafe of sake and someone else’s nigiri—I’d had enough. The owner, a kind-looking man in his sixties with a no-nonsense air, must have noticed our frustration. He approached the waiter as he set down the latest mix-up and asked, calmly but firmly, “What’s going on here? This isn’t what they ordered.” That’s when things took a turn.
Instead of apologizing or fixing it, the waiter exploded. “Yo, chill, man! I’m doing my best—it’s not my fault the kitchen’s slow!” he yelled, jabbing a finger at the owner, who was easily three times his age. The owner stood there, stunned, as this kid ranted about “stress” and “unfair expectations.” The dining room went silent, every head turning to watch. Eventually, the owner just shook his head, told him to go home, and personally brought us our correct order with an apology. The sushi was great, but the taste was soured by what I’d just witnessed.
Driving home, I couldn’t stop thinking: What happened to respect? I grew up in a world where you didn’t talk back to your elders—especially not someone who signs your paycheck. Traditional values like accountability, courtesy, and plain old work ethic used to mean something. Sure, every generation grumbles about the one after it, but this felt different. This wasn’t just youthful rebellion; it was a total disconnect.
What bothers me most is that this waiter reminds me of people I know—my nephews, their friends, kids in their late teens and early twenties. They’re not all like this, of course. I’ve seen my nephews hustle at summer jobs and treat their grandparents with kindness. But there’s a growing slice of their cohort that seems to mirror that waiter: entitled, unmoored, and oblivious to the basics of getting by in the world. It’s not the marijuana—that’s been around forever—it’s the attitude. And it deeply saddens me.
I hope I’m wrong. I want to believe life will knock some sense into these young adults, the way it did for so many of us. Maybe a few hard lessons—lost jobs, tough conversations, or just time—will transform them into people who value respect and responsibility. The owner at Sushui deserved better. We all did. And I’d like to think the next generation can still figure that out. For now, though, I’ll be eating my sushi somewhere else.
But as I reflected more, I realized this isn’t just about one bad waiter—it’s about mindset, discipline, and the long-term consequences of how we approach responsibility. Whether in the workplace or in the markets, success demands a certain level of accountability. Trading is a profession where you must own your mistakes. You can’t shrug off a bad trade with an “Oh, yeah, my bad” and expect to stay in the game. Markets reward those who adapt, learn from missteps, and refine their strategy—not those who blame the system and double down on bad habits.
In many ways, the psychology of success in trading mirrors the traits that seem to be fading in some corners of today’s workforce: resilience, focus, and an understanding that performance—not excuses—dictates results. Just like that waiter lost his job because he refused to take ownership, traders who lack discipline or accountability often find themselves sidelined by the market. The lesson? Success isn’t about avoiding stress or chasing “good vibes”—it’s about showing up, taking responsibility, and improving every single day.
Recent Trade Review
Last week, our Dynamic Profit Trader (DPT) model identified Invesco QQQ Trust (QQQ) as a short opportunity, and the trade played out successfully. Those who joined our Live Trading Room (LTR) session last Wednesday saw the setup unfold in real time (watch the recording here).
This trade worked because our DPT model pinpointed QQQ’s weakness, validated by macroeconomic trends and technical indicators. Our risk management tools helped define precise entry and exit points, reinforcing the decision with a disciplined approach. While free members gain insights into market conditions, paid DPT subscribers receive real-time SMS alerts, ensuring they enter and exit trades at the right moments—a key advantage in fast-moving markets.
This QQQ trade highlights how YellowTunnel provides not just trade ideas, but expert analysis, risk management strategies, and model-driven validation to help traders execute with confidence. If you missed it, be sure to watch the recording and see our strategy in action.
CURRENT TRADING LANDSCAPE
The stock market navigated another turbulent week as investors processed a combination of economic data, shifting Federal Reserve expectations, and concerns over global trade policies. Inflationary pressures showed signs of moderation, yet consumer sentiment remained subdued, leading to cautious positioning across major indices. While certain sectors exhibited resilience, broad-market strength was lacking, leaving the S&P 500 in a consolidation phase marked by erratic swings in both directions.
At present, the S&P 500 is trading within a well-defined neutral range. Resistance remains firmly established between $620 and $640, acting as an upper boundary that bulls have struggled to overcome. On the downside, short-term support is forming in the $560–$580 range, which suggests that while the market has not succumbed to a full-fledged downtrend, the current environment of elevated interest rates and prolonged policy uncertainty continues to restrict significant upside momentum. For reference, the SPY Seasonal Chart is shown below:
The broader trading landscape reflects a market caught between competing forces. On one hand, economic data has largely aligned with expectations, and corporate earnings have managed to exceed forecasts in many cases. On the other hand, headwinds persist, including the Federal Reserve’s insistence on maintaining higher interest rates for longer and emerging indications of softening in the labor market.
Weekly Market Breakdown: Inflation, Yields, and Sector Divergence
The trading week began with a cautious tone as a sharp rise in Treasury yields put pressure on equities. The 10-year Treasury yield surged past 4.8%, marking its highest level in weeks. This rapid move in yields had an immediate tightening effect on financial conditions, prompting investors to reassess their risk exposure. Equities, particularly within growth-sensitive sectors, struggled under the weight of rising borrowing costs.
The S&P 500 and Nasdaq both opened the week in negative territory, reflecting the broader uncertainty. While the Dow Jones oscillated between gains and losses, ultimately searching for direction, defensive sectors such as utilities and healthcare saw inflows as traders sought safety. The lack of conviction in the market signaled hesitation, with investors largely awaiting the release of key economic reports that would provide clarity on inflation trends, labor market health, and the Federal Reserve’s policy trajectory.
Investor sentiment briefly improved following the release of the Job Openings and Labor Turnover Survey (JOLTS) report. The data revealed a decline in job openings, falling to 8.7 million from 9.1 million in the prior month. This suggested that the labor market, while still strong, was beginning to show signs of cooling. A softer labor market is often viewed as a potential relief valve for inflation, as reduced hiring demand can help temper wage growth, thereby easing broader price pressures.
Initially, this data was interpreted as a positive sign, with markets responding favorably to the notion that the Federal Reserve might not need to maintain restrictive monetary policy for much longer. However, lingering concerns over inflation kept bond yields elevated, preventing equities from staging a more meaningful rebound. Defensive sectors, particularly utilities and consumer staples, extended their gains, while technology stocks attempted to claw back some of Monday’s losses but struggled to sustain momentum.
Despite the somewhat reassuring labor market data, investors remained cautious, recognizing that a single report was unlikely to dramatically alter the Federal Reserve’s stance. The broader question remained whether economic conditions would deteriorate enough to warrant a policy shift in the months ahead.
Market sentiment took a hit midweek as fresh economic data reignited inflation concerns. The Institute for Supply Management’s (ISM) Services PMI came in at 53.4, exceeding expectations and signaling continued expansion within the services sector. While strong economic activity is generally favorable for markets, this particular report stoked fears that inflationary pressures could remain stubbornly high, potentially delaying any Federal Reserve rate cuts.
Adding to investor anxiety, several Federal Reserve officials delivered hawkish comments, reiterating their commitment to a data-driven approach and cautioning that rate reductions were unlikely in the near term. Their statements reinforced the notion that monetary policy would remain restrictive for an extended period, further dampening sentiment.
The bond market quickly reflected this shift, with yields climbing higher once again. The 10-year Treasury yield approached 4.9%, applying renewed pressure to equity valuations, particularly within the technology sector. Meanwhile, financial stocks benefited from the rising rate environment, as banks and insurers tend to perform well when interest rates remain elevated.
The market exhibited heightened volatility throughout the session, with investors weighing the upside of continued economic resilience against the downside of persistent inflation risks and prolonged restrictive policy.
The release of the weekly jobless claims report provided further insight into labor market conditions, with 218,000 new claims filed, slightly higher than the prior week but still within historically low levels. While this suggested that the labor market remained relatively stable, the bigger concern for investors was the ongoing rise in Treasury yields. The 10-year Treasury yield surged toward 4.9%, reigniting fears that higher borrowing costs would continue to weigh on economic growth.
Technology stocks bore the brunt of the selling pressure, with the Nasdaq leading the market’s downturn. However, energy stocks managed to buck the trend, propelled higher by a notable rally in crude oil prices. WTI crude climbed above $80 per barrel, supported by tightening supply conditions and ongoing geopolitical tensions.
Investors remained on edge, recognizing that while the economy remained resilient, the combination of rising yields and persistent inflationary pressures meant that the Federal Reserve would likely remain cautious before pivoting toward a more accommodative stance.
The final trading session of the week brought a mix of economic data, with inflation showing further signs of moderation. The PCE price index, the Federal Reserve’s preferred inflation gauge, rose 2.5% year-over-year, aligning with expectations and reflecting a slight deceleration from the 2.6% reading in December. Core PCE, which excludes volatile food and energy prices, climbed 2.6%, marking a notable step down from the 2.8% increase recorded the previous month.
While these figures signaled progress in the Fed’s inflation fight, consumer spending data painted a more complex picture. Retail activity showed signs of slowing, suggesting that while inflation may be easing, higher borrowing costs and growing economic uncertainty were starting to weigh on household finances.
However, the true catalyst for Friday’s market rally was the release of the Non-Farm Payrolls (NFP) report, which showed an impressive gain of 275,000 new jobs, well above consensus estimates of 200,000. The unemployment rate held steady at 3.9%, reinforcing the notion that the labor market remained in solid shape.
Notably, wage growth appeared to be stabilizing, with average hourly earnings rising just 0.2% month-over-month, helping to ease concerns over wage-driven inflation. The strong jobs data helped alleviate fears of an imminent recession, allowing markets to stage a late-week rebound.
Equities rallied into the close, with financial and energy stocks extending their gains, while technology shares rebounded from earlier losses. Nvidia, which had suffered a steep drop on Thursday, clawed back some ground, and Tesla managed to snap a six-day losing streak. Meanwhile, Bitcoin retreated below $80,000, continuing its post-inauguration decline.
Looking Ahead: Key Market Events to Watch
With inflation showing signs of cooling but the labor market remaining strong, investors will focus on several key events in the upcoming week. The start of earnings season will provide crucial insight into corporate health, and Fed Chair Jerome Powell's remarks could offer clarity on the central bank's policy trajectory. Retail sales data will also be closely monitored as consumer spending trends remain an important gauge of economic momentum.
The week of March 3–7 presents a packed schedule of economic data, Fed commentary, and corporate earnings, all of which could influence market sentiment. Investors will pay close attention to labor market trends, inflation signals, and consumer spending as they evaluate the Federal Reserve's next moves. Key reports begin with manufacturing data, including the S&P Global and ISM Manufacturing PMIs for February, alongside January's Construction Spending update. Auto sales figures will offer insights into consumer demand within the automotive sector.
Midweek, the ADP Employment Report will provide an early read on job growth, ahead of the official jobs report on Friday. The ISM Services Index and Factory Orders will highlight economic momentum, while the Fed's Beige Book will offer a regional economic snapshot. Later in the week, initial jobless claims, wholesale inventories, and the U.S. trade deficit will offer additional signals on the health of the economy. The week's highlight will come Friday with the February jobs report, which will include nonfarm payrolls, the unemployment rate, and wage growth—key indicators for the Fed's policy decisions. The consumer credit report will round out the week, shedding light on trends in borrowing and spending.
Several Federal Reserve officials are scheduled to speak throughout the week, with Chair Jerome Powell’s remarks on Friday being the most anticipated. Investors will be listening for any shifts in the Fed's stance on inflation and interest rates, particularly following key economic data. Other notable Fed speakers include New York Fed President Williams, Fed Governor Christopher Waller, and Atlanta Fed President Bostic.
A variety of major retailers and tech companies will report earnings, offering insights into consumer spending and business investment. On Tuesday, investors will hear from Target, AutoZone, and Best Buy. Wednesday will feature earnings reports from Abercrombie & Fitch, Foot Locker, and Victoria's Secret, while Thursday will bring results from Macy’s, Broadcom, Costco Wholesale, Gap, and Hewlett Packard Enterprise.
With labor data, Fed commentary, and earnings all in focus, market volatility is likely to persist. Investors will closely monitor signs of cooling inflation or an economic slowdown that could influence the Fed's outlook. A disciplined, data-driven approach will be essential as the market navigates this evolving landscape.
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SECTOR SPOTLIGHT
As we dive deeper into the market dynamics, one sector has been consistently on my radar due to its relative resilience despite broader market challenges. With inflationary pressures moderating yet consumer sentiment remaining cautious, this sector presents a unique opportunity. The key to success here lies in the underlying consumer behavior patterns, which are shifting but not entirely contracting. Among the various segments, one, in particular, has shown intriguing strength in navigating the currents of higher rates and economic uncertainty.
The Consumer Discretionary sector, represented by the Consumer Discretionary Select Sector SPDR Fund (XLY), is worth a closer look. Despite some headwinds, including rising interest rates and a cooling labor market, this sector has demonstrated surprising resilience. XLY, which includes major consumer-focused companies like Amazon, Tesla, and Home Depot, tends to outperform when consumer spending remains steady or shows signs of growth, even if only at a moderate pace.
Amid rising borrowing costs and persistent inflation, the Consumer Discretionary sector has shown strength. XLY has maintained momentum, driven by resilient companies that perform well even in economic turbulence. The sector benefits from sustained consumer demand for non-essential goods and services, as households adapt to higher costs. XLY stands out because it often outperforms during economic uncertainty, with consumers prioritizing discretionary spending. Given the current moderate inflation and strong corporate earnings, XLY presents an attractive option for investors seeking to tap into consumer-driven growth. As consumer behavior shifts, XLY is poised to outperform, with certain companies benefitting from increased demand for high-value, non-essential products.
TRADE OF THE WEEK: Home Depot ($HD)
This week, my attention is focused on Home Depot ($HD), a standout within the Consumer Discretionary sector. The broader market environment, shaped by rising interest rates and a moderating labor market, presents both challenges and opportunities for stocks like Home Depot, which has displayed impressive resilience in recent months. While the market navigates volatile conditions, Home Depot has managed to outperform, making it an intriguing choice for investors looking to capitalize on the current market landscape.
Home Depot’s performance is tied to a few key trends. Despite the Federal Reserve’s continued commitment to elevated interest rates, which have weighed on consumer sentiment, the housing market remains active, driving consistent demand for home improvement products. Consumers are increasingly choosing to upgrade their homes rather than buy new ones, a trend that benefits Home Depot. This pattern has become more evident as inflation shows signs of easing, yet borrowing costs stay high, keeping consumers engaged with home improvement rather than making large, discretionary purchases. Even with the Fed's hawkish stance, Home Depot has been insulated from some of the broader market’s volatility, thanks to its solid footing in a sector where spending is more necessity-driven.
Looking at recent price action, $HD has demonstrated resilience, especially within the context of broader market swings. Last week, the S&P 500 faced erratic movements, moving between resistance levels of $620–$640 and support around the $560–$580 range. However, Home Depot, like other consumer-focused stocks, has been one of the relative outperformers, holding steady and seeing price consolidation within a favorable range. This was particularly evident as the bond market reacted to fresh inflation concerns, with the 10-year Treasury yield rising towards 4.9%. Despite the upward pressure on yields, Home Depot has remained relatively unaffected, reflecting investor confidence in its position in the housing and home improvement markets.
Further strengthening the case for $HD this week is the broader resilience seen in the Consumer Discretionary sector, particularly through XLY. As mentioned in the Sector Spotlight, XLY—which includes Home Depot—has proven its stability amid rising borrowing costs and inflationary pressures. The fact that Home Depot has been able to hold its ground, even with Treasury yields pushing higher, is an encouraging sign that it remains well-positioned to weather economic uncertainty.
Additionally, there is strong support for Home Depot from my AI models, which have identified the stock as one of the more favorable plays for the near term. These models reflect continued strength in the company’s ability to generate earnings, particularly as consumer demand for home improvement products persists. The AI also indicates a healthy upside potential in the coming week, suggesting that $HD could be poised for growth as it navigates through this volatile environment.
As the market moves into the week ahead, with critical data expected on inflation and labor markets, Home Depot stands out as a solid pick. The stock offers investors exposure to a resilient consumer sector that continues to benefit from strong housing market trends, even in a climate of rising rates and inflationary concerns. Given the backing from both technical market conditions and AI predictions, Home Depot presents an attractive opportunity for investors in the current market environment.
This week, I’ll be adding Home Depot ($HD) to my portfolio!
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One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:
Wishing you a week filled with resilience, growth, and prosperous opportunities!