Vlad's Gushing Profit Trade
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The bull trend has run into some mixed headwinds that have traders working hard to sift through the issues at hand that are potentially disruptive forces. First and foremost is the newfound concern about inflation after wholesale inflation data for January came in hot and well above forecast.
On Thursday, Treasury Secretary stated in an interview that she and the Fed would rather let inflation push higher than step on the stimulus brakes just as the vaccine rollout is making progress and the economy is stabilizing.
The yield on the benchmark 10-year Treasury rose to 1.33%, commodities are trading higher across the board with crude oil making the most pronounced move up as WTI has cleared $60/bbl and reasserted the energy sector as a market leader.
As earnings season winds down traders seeking the next big catalyst can focus on the Congressional Covid-19 stimulus bill that should be passed by the end of February and provide stopgap funding for millions of Americans still out of work.
It is thought that a major infrastructure spending bill will start to make progress soon thereafter, giving the market what it loves to embrace, huge spending and stimulus that has the full weight and support of the Fed, Treasury, White House and Congress.
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
I have been in constant communication with my relatives from Texas. I cannot begin to imagine what they are going through and they are actually pretty lucky because they live in a house with a fireplace and have stocked up on food. I listen, helplessly.
I wish I could help, but I just don’t know-how. I am confused why I barely hear about it on the news, why there is barely any outpouring of outrage, and where the help is. People are freezing, people are starving, there are children and elderly, living in unlivable conditions, without end in sight, with yet another snowstorm on the way. If you know how I can help, please let me know.
The SPY continues to trade in the narrow range. All sectors traded in the red except utilities (XLU). Growth stocks sold off the most this past week. AAPL briefly crossed below its 50-day moving average. Short-term, the SPY range remains between $370 and $395. The DXY rebounded today and a stronger dollar will pose a challenge for value stocks in the short-term. TLT remains in the downward momentum as the yield curve steepens.
A short-term correction has started and probably has 1-2 more weeks of making lower lows and lower highs. The $388 level is key support for the SPY short-term with major technical support is now at $370-$375 and I expect the SPY to retest these levels in the next 1-2 weeks.
The bottoming process has started and the worse part of the sell-off is now behind us. The market will finish the bottoming process by end of February and will resume bullish momentum by middle of the March.
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 April and May expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for Monday is at $387 level using SPY and "SELL" signal is at $394 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $374 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.
One cannot view the current market landscape without being totally impressed with the rally in the energy sector. It’s been truly eye-popping, considering this time last year crude technically traded at a negative valuation because of contango-related futures trading that roiled the oil market.
WTI crude’s latest advance to $60/bbl brings new life to the once downtrodden, politically unpopular sector that has been severely under-owned by institutional investors. Now there is a panic move back into the sector incited by drastic production cuts, low refining inventory levels and long lead times to raise those inventories.
When trading the energy patch with a broad brush, the go-to instrument is the Energy Select Sector SPDR ETF (XLE). While shares of XLE have made traded from $30 to $46 in the past three months, from the 2-year chart below, there is still a lot of room for XLE to run considering where it traded back in 2019.
Looking at the top ten components within XLE, we see the composition of the best-of-breed blue-chip stocks making for a solid collective trading opportunity. Having exposure to upstream, downstream and midstream exposure is a way to cast a net over the entire sector.