Vlad's Year-End Trade: Rotten Apple
Happy Holidays everyone and welcome to the Yellow Tunnel community, a family of trading services dedicated to all classes of traders seeking to elevate their trading skills, market awareness, and trading profits.
As we approached the Christmas holiday, stocks started to trade lower on Friday as traders received data from the Federal Reserve's personal consumption expenditures price index before turning positive. This week, U.S. stocks have been on a downward trend except for Wednesday's brief rally; consequently, all three major indices are predicted to end the week in negative territory. With the holiday season upon us, investors have been evaluating a slew of fiscal data reports such as building permits and housing starts, the Consumer Confidence Index report, third-quarter GDP figures, and November personal consumption expenditure records.
With the end of the year nearly here, trading activity and volume traditionally decrease significantly. Fewer economic reports atop the low volume also add to the increased potential of volatile swings. Just this Wednesday, markets boomed unexpectedly before resuming their downward trend. This brings to mind YellowTunnel's predictive analytics. The trading platform which I created is intended to support traders during these uncertain times. Where traditional models struggle to adjust to an ever-changing market, my A.I. utilizes key predictive analytic features that learn as the market changes.
As you might've seen in my last few blogs, YellowTunnel reviews have become an important point of interest for me. I pride myself in the platform I built and its ability to help the everyday trader, just as much as it is able to help the experienced trader. When people ask "What type of trader is YellowTunnel best suited for?" I can't help but smile and say "All!" We truly aim to support all levels of traders and as I interact with my trading community via discord, webinars, and emails I am privy to know that this is absolutely true. I've talked with those that are just getting started just as much as I've interacted with those that have 10 or 20+ years of experience.
So when end-of-year volatility ticks up, I not only know that my trading platform assists all types of traders, I've seen it done! Over and over again!
Does predictive analytics work?
For those new to my trading platform, YellowTunnel, the short answer is: yes. If you keep reading, you will see below my exact trading performance using predictive analytics featured in my trusted trading platform. I won't brag - I'll let the numbers speak for themselves.
But what I will say is that for this pricing, I do not believe you can get a better product to assist your day-to-day trading. The effectiveness of my predictive analytics is not simply measured by the performance of the trades listed below, but by the guidance it provides as markets continuously change. Not only are the trades that have been done predominantly book returns, but also the traders that are avoided by the predictive features of my trading platform. We discuss this and much more every week in my weekly webinars where I answer subscriber questions and provide my current view on the market as well as my trading plan. Then, every day we also provide direct access to a robust trading community via our Discord server. Here users are able to interact and dissect, as well as ask questions about the latest YellowTunnel picks and predictions.
As I've stated, at YellowTunnel, we focus on not only trading-centered ideas but also non-trading opportunities that will offer our subscribers a chance to become more well-rounded and complete traders. In addition to the trading tools and ideas available on our website and during our weekly webinars, we provide other resources that can help supplement your Live Trading experience.
That is precisely why I recommend being part of our YellowTunnel trading community, where you can discuss and dissect multiple trading strategies with others. This is exactly what we did in my latest Strategy Roundtable, which we hold weekly on YellowTunnel. I recommend checking out our latest Roundtable webinar in its entirety below:
How To Trade a Bear Market Strategy Roundtable
With the unpredictable nature of the market and the uncertainty ahead of us, I can’t emphasize enough how vital it is for our readers and members of the Yellow Tunnel community to keep referring to our Live Trading Room so as to maintain a close tie of how our I and my AI platform is navigating us in and out of select trades. It’s FREE and I highly encourage everyone to sign up to the Live Trading Room and keep checking in throughout the trading day.
Every Monday and Wednesday, I highlight our best strategies and potential trading setups via the DISCORD server. It’s the future of bringing together a trading community’s total services, educational products, live chat venues, support, news, how-to tutorials, webinars, live-trading demonstrations, and tons of market analysis. It is incredibly interactive and full of crucial and timely information. Just go to:
I also want to emphasize to traders how vital a stop-loss discipline is to winning and being successful in an unforgiving market. We employ specific stop-loss instructions with every trade. The buy and sell programs controlled by high-frequency related algorithms can create great profits or cause sudden losses, so it is imperative to maintain an element of controlling risk with each trade.
NEW EARNINGS POWER TRADER SERVICE
I recently launched our new Earnings Power Trader service, which I am 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.
This new service is special because 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. Click here to learn more.
Signals have historically averaged over 85% accuracy in my live trading since inception. Sometimes I hold positions for 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 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 Earnings 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 entered 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.
A 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 an OTM Put (strike less than 100) with an option BID price close to $0.5.
CURRENT TRADING LANDSCAPE
As of Friday, the 5-day chart shows the $SPY was trading 0.25% lower, near $382. Major U.S. indices were mixed on Friday, with shares selling off in the morning before rebounding. The volatility index traded lower for most of the week before spiking on Thursday, currently trading near $21.
Several key earnings impacted the market this week including $MU, $FDX, and $CCL earnings this week, while the focus remained on Friday's CPE data. I am watching the overhead resistance levels in the SPY, which are presently at $390 and then $402. The $SPY support is at $380 and then $370. I anticipate that the market will hit new lows in the coming 2-8 week span. Therefore, I suggest a bearish approach to trading now and recommend my subscribers take necessary measures, such as hedging, to protect their positions. See SPY Seasonal Chart below:
With these levels, I am keen to move in on one particular trade, but let's discuss the totality of weekly news and review my A.I. data before we lock in this position.
This week, there was a notable lull in trading activity as the holiday season neared, sending share prices plummeting on Monday due to investor wariness. The possibility of additional Federal Reserve involvement and an impending recession additionally weighed heavily on market sentiment to open the week.
On Tuesday, the Bank of Japan surprised global markets with an unforeseen alteration to its bond yield controls, allowing long-term interest rates to rise substantially. This move was made in an effort to reduce some of the costs associated with continued monetary stimulus. Likewise, the Bank of Japan maintained its current yield curve control objectives and announced it had increased its cap on 10-year bond yields from 0.25% to 0.5%. The decision led to shares plummeting along with a surge in yen and bond yields; furthermore pressuring the U.S. dollar too.
On Wednesday, stocks surged as the U.S. markets concluded its four-day downturn due to a positive shift in investor sentiment caused by new consumer confidence numbers and quarterly earnings reports from FedEx and Nike. Despite a decrease in package volumes, FedEx reported earnings that exceeded forecasts and saw their stock prices skyrocket by 3.4%. Additionally, Nike boasted impressive quarterly sales with strong margins – despite rising levels of inventories - resulting in stocks surging 12.2% on Wednesday! The positive results to these reports seemed to temporarily quell inflation worries across the market.
Then on Thursday, we saw trading volume decrease and volatility, once again, increased. The major piece of news that day was third-quarter GDP data. The third-quarter GDP growth rate had been revised up to 3.2% annually from 2.9%, completely outperforming economists' predictions that it would maintain its original figure of 2.9%. The current quarter demonstrated signs of growth after the initial decline in GDP over two quarters, and this news came as a relief to many investors.
Nevertheless, fear still lingers that the Federal Reserve may raise rates too abruptly and adversely affect markets around the world. Also on Thursday, the most recent unemployment report determined a decrease in applications- an outcome that was less than expected.
Finally, on Friday, traders keenly examined the Consumer Sentiment Index to assess sentiment; results exceeded economists' expectations with a reading of 59.7 for this month. U.S. stocks climbed as the November inflation data demonstrated a slight decrease in prices that remain at all-time highs. Analysts predicted a 4.7% increase in Core PCE from the prior year and were pleased to find that their forecasts had come true, with October's increase of 5% only adding to this trend.
Despite the slow decrease in growth from the previous month, personal income still surged by 0.4% while spending saw a slight rise of 0.1%. Although these increases were not as substantial as seen before, they marked an overall positive change for those seeking financial stability and success.
Additionally, what could be supporting markets on Friday is the approved budget which passed through the Senate on Thursday. On Thursday, the Senate overwhelmingly approved a $1.7 trillion government funding bill, which will be facing its final hurdle on Friday when it is taken up by the House of Representatives. It seems Congress is now ready to pass the proposed spending package which grants $40 billion for disaster relief and a 10% budget increase to the Pentagon. Also in the bill, there will be an extra $45 billion allocated for emergency assistance in Ukraine.
With some additional clarity in the political sphere, the market appears to head into the long weekend in good standing. As we approach the holiday season, market conditions may improve and rebound, followed by a possible retest of recent support in January. With this in mind, there is particular trade I will be placing when the markets near my predicted levels as guided by my A.I. toolset. This sector could benefit from the new lows and one particular symbol should be a standout, more on that in a bit!
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As we head into the final week of 2022, trading volume in the market will likely remain low. There aren't many relevant economic reports left to be released and earnings season has not yet started. While the bear market should resume in 2023, the last bit of holiday bump could be in store before we retest recent support, which I believe will come in January. As it stands, this perspective lends itself to specifically one sector that is primed for a good run in the coming weeks.
ProShares Short QQQ ETF (PSQ) is currently trading at $14 - aiming to short the daily performance of the QQQ.
PSQ is a popular instrument among traders who wish to short the sector in a simpler fashion than calls or puts while also getting rid of the individual stock risk. With a 52-week range of $10-15, PSQ currently sits right at the higher end of its annual range. The potential to retest and create new lows in the market means PSQ could create new highs and thus I am interested. But let's review my model's predictive analytics regarding PSQ.