Vlad’s Money In The Bank Trade

Published Jan 17, 2021

Vlad’s Money In The Bank 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.

The promise of another $1.9 trillion is a stimulus from the incoming Biden administration that failed to impress a market that had already priced in such expectations. It should be of no surprise that some profit-taking along the way is in order and Friday’s tap reflected such price action. Contrary to popular opinion, markets don’t go straight up.

NEW WEEKLY POWER TRADER SERVICE

We recently launched our new Weekly Power Trader service that we at Yellow Tunnel are very excited about. Each week on Sunday, 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.

Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop as 2% of the stock price.

Signals have averaged over 75% accuracy in my live trading since inception. Sometimes we hold position 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. Green color should be interpreted as a bullish signal and Red color as a bearish signal.

CURRENT TRADING LANDSCAPE

The SPY continues to trade in the well-defined range between $375 and $382. The main theme for Friday was a quick reversal of prior day rally in treasury prices which brought back reflationary trade (XLE, XLF, XLI, SMH and IWM rallied). Technology stocks underperformed (TSLA, AAPL, FB).

The new SPY support remains at the $372 level and Friday’s session tested that level. The U.S. Dollar and the Treasuries continued to trade in the downtrend, but if stocks give back some ground in the next couple of weeks, both the dollar and Treasuries will see a short-term move higher as a safe haven rotation.

As long as the SPY is trading above the $372 level, the SPY will continue to make incremental gains and can reach the $380-$385 level second half of January. With that said, the bulls have been losing momentum and I still expect up to a 5% correction in January-February.

Once the expected correction has run its course, the bull market will resume its long-term rally and will continue to make new highs into March-April. I would be a buyer using any short-term corrections and use dollar-cost averaging strategy to accumulate positions. If you are trading options consider selling premium with March and April expiration dates.

"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $373 level using SPY and "SELL" signal is at $379 for short-term traders. Based on our models, the market (SPY) will trade in the range between $350 and $385 for the next 4 weeks.

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 your 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 the 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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SECTOR SPOTLIGHT

The torch of market leadership has been passed to the financial sector, at least for the first week of 2021 is concerned. The selling of Treasuries in December, the flood of home refinancing activity investment gains from wealth management and proprietary trading operations are showing up in better-than-expected fourth-quarter results that were posted Friday by JPMorgan & Chase Co. (JPM), Citigroup Inc. (C), PNC Financial Services Group Inc. (PNC) and Wells Fargo & Co. (WFC).

The most widely traded proxy for the financial sector is the Financial Select Sector SPDR ETF (XLF) that hit a new all-time high this past week of $31.62 in what can only be described as a torrid rally that has only picked up speed with strong buying of the top ten holdings in XLF that make up 53.53% of total assets.

Our AI platform is bullish on XLF. The Stock Forecast Toolbox gives XME a “B” Model Grade rating with a 10-day price target of $35.95. With the shares trading at $30.73, traders have an excellent opportunity to trade XLF from the long side in the short-term.