Trade Alert: Black Gold!
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.
Another week of mixed to a lower performance for the stock market has September living up to its reputation as the most difficult month of the year for the bulls. The same concerns and fears of last week have carried over to this week plus some new wrinkles that have triggered more volatility – namely higher taxes and higher bond yields.
Better-than-forecast retail sales and manufacturing data sent the yield on the 10-yr Treasury Note up to 1.38%. There is the nagging issue of inflation which is very elevated at the wholesale level and persistently upon the consumer level.
Crude prices topped $72/bbl this week, implying higher gasoline prices and natural gas prices rose above $5/mcf for the first time in seven years that makes for an expensive winter heating season. Wage inflation is also a sticking point where 11 million unfilled jobs are forcing hiring incentives and pay increases to attract talented workers at all levels of the workforce.
The question of whether another rotation out of growth and into value is not a matter of if, but when – and this is exactly where the power of our AI models in our Weekly Power Trader advisory service becomes so valuable.
TRADING LANDSCAPE
From a purely technical standpoint, the $SPY bounced off the 50-day moving average, $442, and settled below the prior breakout of $449. The value/reflationary stocks traded higher as did technology stocks following a six-day wave of selling.
The $DXY started to break down its multi-month bullish momentum, but the short-term is oversold. The next level of resistance is at $93. The $TLT bounced back above the 50-day moving average (bullish, medium-term for the market).
Based on the steep correction in the reflationary stocks, strong dollar, and overbought technology stocks, the market will continue the pullback in September. The $SPY short-term support level is at $442, followed by $438. The SPY overhead resistance is at $455. I expect the next stage of the pullback to continue in the next two weeks.
I would be a buyer of value stocks on pullbacks and sell technology stocks on rallies. I would consider rebalancing the portfolio at this point to be bullish. The second wave of selling will continue for the next 1-3 weeks. Market corrections are never a one-way trade.
"BUY" signal based on the Aggressive Power Trader Portfolio is at $442 level using SPY and the "SELL" signal is at $448 for short-term traders.
Based on our models, the $SPY can pull back 3-5% from the all-time highs in the next 1-3 weeks. If you are trading options consider selling premium with October and November expiration dates. Based on our models, the market (SPY) will trade in the range between $435 and $455 for the next 2-4 weeks.
NEW WEEKLY 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 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 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.
--------------------------------------------------------
Dear Subscriber,
To be clear, I wasn’t excited to see the Delta variant extend the pandemic nor did I expect that a third vaccine booster shot to be recommended. Many, many lives have been negatively affected by the COVID-19 pandemic.
The world and the market are changing drastically, I am about to put my trading algorithm to the ultimate test.
You see, it’s easy to make money in a bull market - and we were in the middle or maybe near the end of a historic run.
I spent years building a sophisticated, proprietary trading algorithm that would be immune from overall market performance.
And here’s the best part: when you click here, you can join me for the next 30 days...
Wishing you and yours the very best,
Vlad Karpel
Chief Investment Officer and Founder
P.S. Click here, to join me for the next 30 days...
--------------------------------------------------------
SECTOR SPOTLIGHT
Of all the situations grabbing headlines, the upward prices of oil and natural gas are catching most traders off guard. These are not crowded trades and with Hurricane Ida disrupting some operations in the northeast coupled with supply disruptions in Europe and ports in Asia, there is a strong momentum of late for these two fossil fuels.
Traders are already speculating on harsh winter conditions for the U.S. and Europe, making for even higher prices going forward. At some point, OPEC and non-OPEC nations will commence higher output levels, but until then, the path of least resistance at present is higher.
The same is true for natural gas where the Biden administration and states like California have determined to cut back on the future development of natural gas deposits, so as to promote renewable energy sources. But as we saw last winter in Texas, this mindset backfired when record cold temperatures cripple wind power and a shortage of natural gas supplies forced power outages across the state.
The best way to play the energy sector as a whole is to trade the Energy Select Sector SPDR ETF (XLE) and the related options. XLE is a highly concentrated ETF, where the top ten holdings make up over 76% of total assets. What makes XLE so attractive is that stock picking in the sector carries a higher level of risk than some other sectors being they are commodity-related companies. 
From a technical standpoint, shares of XLE have successfully tested the 200-day moving average and are working up through the 20 and 50-day moving averages. The chart shows a very constructive base by which the shares should make their way back up to the previous highs. 
When we apply our AI-driven Forecast Toolbox to XLE, we get a “B” Model Grade rating and a Predicted Resistance price target of $68.03, implying a big upside of 43% for this ETF over the next several weeks. For traders wanted to receive our buy signal and related trades in XLE, make the decision today to become a new member of Dynamic Power Trader and don’t miss out on when we trade XLE.