Vlad’s Top Sector Trade!

Published Jun 12, 2020

Hi everyone. Vlad Karpel here for Yellow Tunnel, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness and trading profits. This is the kind of market where the combination of AI and personal discipline can result in fantastic portfolio performance.

Every week my team brings to our audience of traders ongoing education, coaching and trading strategies to not just heighten our collective knowledge and instincts, but to create a truly rewarding personal experience for all our members.

NEW OPTION FEATURE FOR PAID SUBSCRIBERS

We recently launched our new Option Portfolio for paid subscribers to Aggressive Power Trader. This expansion of our service brings a major offering of quick-hit option strategies to our audience that thrive on trading options. We offer specific option trades of what our AI tools generate. All traders need to do is execute per the parameters set forth in the table of instructions.

Each day (8 PM and 8:30 AM CST), our expert traders use YellowTunnel Tools to provide the Top Bullish, each with an Entry Price, Target Profit, and Stop Loss. Please note, that it is possible to hit the Target multiple times throughout the trading day, so you can trade the same stock multiple times using the same entry price.

Also, note that signals are meant to last for 1-2 days as long as the vector confirms the same direction as the original pick. In the live trading room, we use target gain like 1% and stop as 1% of stock price.

Signals have averaged over 75% accuracy in the live trading account. Sometimes we hold a position overnight 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 wonder what effect does the shelter in place has on couples. Are people getting tired of seeing, listening and talking to each other day in and day out, or are couples getting closer, spending more time together and realizing how nice it is to finally spend so much together?

Before the pandemic, I would argue the first one, but I was just told otherwise. Apparently, this couple was in a midst of filing for a divorce when the pandemic hit, locking them up in the same home for an unknown amount of time. The wife, who is a busy real estate agent with a talent for selling houses, but zero ability to cook, couldn't work, so she took up watching cooking shows and trying out different recipes.

The husband, who was eating out throughout their 12 years of marriage, finally started to look forward to coming home to a home-cooked meal. As he began to finally enjoy his wife's cooking, he wanted to somehow thank her, so he began to bring home flowers, bottles of wine, and other trinkets, which the wife obviously loved. Now, fast forward three months into the pandemic, and they are giving their marriage another chance. I wonder if this is a lone occurrence or a trend?

Value stocks sold off third day in a row. All sectors sold off from 3-7% and VIX jumped 50% to 41. The top building process has begun. SPY overhead resistance is at $323 and the short-term market is oversold and due for a rebound starting next week. SPY can overshoot support at $300.00, 200-day moving average, but should rebound starting next week. The market can continue to make incremental gains in the next 1-2 weeks but is prone to a sell-off . The put to call ratio stands at 0.4, lowest number since February, and can be interpreted as complacency and a potential sell off (10-15%) on any negative news.

I expect the market volatility and the two percent daily market moves to persist. At this point, I believe we have set the bottom (market can overshoot support and resistance levels especially when VIX is elevated. SPY top is set at $322 and the market can potentially retest this level in the next 1-2 weeks. My strategy is to buy 5-10% market corrections.

Based on our models, the market (SPY) will trade in the range between $275 and $330 for the next 4 weeks. Our AI-driven Seasonal Chart shown below is still registering bullish forward indicators meaning any bouts of selling will be well-contained constructive to the intermediate-term trend.

SECTOR SPOTLIGHT

Following a huge rotation into deep cyclical and value stocks, the market quickly gave back some of those heady gains last week. Lagging the pack, but now getting some fresh focus are the consumer staples stocks as concerns a slower-than-expected comeback for the economy is seeping back into market sentiment.

Fed Chairman Jerome Powell’s comments on Thursday about the economy being seriously challenged to restore itself to pre-COVID levels was worrisome and money is quickly making its way back into the consumer staples sectors and a place to capture the new mood swing stemming from economic slowdown fears, a resurgence of the coronavirus, social unrest, tensions with China.

Traders wanting to make a sector bet should trade the Consumer Staples Select Sector SPDR Fund (XLP) as the leading ETF that big money is involved with. XLP holds all the best of breed stocks within its top positions that include food, beverage, tobacco, paper products personal care and essential big-box retailers. The top ten positions occupy 70.81% of total assets.

A view of the one-month chart to XLP clearly shows out quickly the sector was sold down at the expense of travel, transportation and industrial stocks. At its current level, XLP is sitting on a key trendline that is support for what should be a good entry point.

It’s an interesting set up for aggressive sector traders to take full advantage of per my buy signals to maximize optimal entry points. I’ll be looking to trade this sector for those that want to trade on our signals within our Aggressive Power Trader advisory service.

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TRADE OF THE WEEK

Proctor & Gamble (PG) is the top holding within XLP and a member of the Dow Jones. The stock is trading well off its all-time high of $128 and has plumbed a recent low of $116 where a reversal is just now underway. The 5-day chart below shows a rising trend line right above $116 where the stock is attracting buyers.

Applying our AI tools, the Seasonal Chart is bullish on PG for the next 20, 30 and 50-day periods, making for an excellent trading candidate to trade actively. It’s always a good practice to stick with a horse that keeps on winning until it doesn’t.

At its current price of $117.00, the entry point is looking attractive and I may be adding this position to our trading portfolio in the coming days.

Our Aggressive Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are “green-lighted ” by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested in each and every trade.

In our primary trading service Aggressive Power Trader, I direct our subscribers through the “trade decision-making process” with the mindset of being in and out of trades within 24-48 hours with the objective of booking 30%-60% gains against the amount of capital at risk on each and every trade with 75% accuracy.

The major element of this service is that it provides tomorrow’s featured trades the night before so traders can analyze and work on how they might best want to participate. You get to examine stock candidates well ahead of when I’m going to execute my best ideas the next day. It’s my TOP STOCK watch list of trading candidates with the various parameters that I use to trade each trade with defined risk levels, entry points and projected exit prices.

Each day at 8:00 PM and 8:30 AM CST, we provide our Top Bullish and Bearish Stocks, each with an Entry Point and projected exit price. Our signals are meant to last 1-2 days. Below are actual recommendations with parameters found on our Aggressive Power Trader Watch List.

I’m only showing a few stocks and ETFs that made up our Thursday night Watch List, so, there are plenty of trading opportunities in stocks, and ETFs to put to work on a daily basis. There are typically 10-12 trading strategies to consider.

I also post details of our trading activity and updates on the Watch List at the bottom section of our daily blog. So, make sure to stay tuned in that service as well.

Trading Thoughts: 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 and allocate no more than 5% of trading capital to any single trade.

I allocate less than 5% of my portfolio if I hold a position overnight. On average, less than 1% of the portfolio should be at risk if you hold a position less than one day. I personally enter a position at predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of a stock price. I target 75% accuracy using these signals.

Through the Aggressive Power Trader service, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.

For those that have followed since inception, a $100,000 initial investment when back tested may have grown to over $1.8 million dollars. This fantastic performance is made possible by being right on every 3 out of 4 trades with an average profit of 24.79% per trade. These are crushing returns and wouldn’t be possible without my decades-long work at developing the most advanced AI tools available to retail traders.

Once you’ve become a member of Aggressive Power Trader, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are archived in the event that they need to be viewed at a later time.

Our special introductory offer of $17 for the first 30 days should be your first trade of the week ahead. Volatility is a beautiful thing if one knows how to harness it. The trading landscape is fraught with uncertainty. Every major company has pulled guidance for 2020 so that just opens the door for extreme moves. This is where the power of AI takes over to navigate where the most opportune trades are and where we shine!

Go to our website at www.yellowtunnel.com and make Aggressive Power Trader your default trading system where the AI that powers my all-world, always thinking platform.

Trading thoughts on our trading model:

Within our Aggressive Power Trader trading stock watch list, trades are recommended in our Tradespoon Live Trading Room the next day.

Aggressive Power Trader is purposed to deliver high-visibility sector strength where a cluster of leading stocks and options are identified, coinciding with what we call a “10-day prediction momentum trade”. When we recommend a stock, ETF, or related option strategy, our time horizon is same-day in-and-out and up to five days max, at which time in the majority of trades, would be closed out.