Last week, I had the opportunity to escape the hustle and bustle of the finance market and go skiing on the beautiful slopes of Courchevel, the world’s ski capital located in the French Alps. Not only was it a lot of fun, but it was also surprisingly cheaper than skiing in most places in the US. The lift tickets and skiing lessons were half the price or less, making it an appealing option for anyone looking for a budget-friendly skiing vacation.
The European skiing experience was quite different from what I was used to in the States. The mountains were stunning, the shopping was great, and there was music everywhere - at times playing until 2 a.m.!
One day, I decided to try something different and do yoga on the mountainside. Although some of my ski companions found this amusing, I was determined to go ahead with it anyway. Surprisingly enough, my decision turned out to be very wise indeed! After skiing for a few hours, many in our group experienced soreness and stiffness in their joints; however, due to practicing yoga beforehand - I felt refreshed and rejuvenated throughout the entire experience!
The lesson I have learned from that experience is that it usually does not matter what other people think. Doing what is best for you can lead to better outcomes, whether it be on the ski slopes or in the financial markets.
In the financial market, developing self-awareness and mindfulness is crucial for making informed and rational trading decisions. Incorporating practices like journaling and yoga into one's daily routine can help one become more aware of their thoughts, emotions, and behaviors. This can lead to better trading decisions, and ultimately, better financial outcomes.
At YellowTunnel, we understand the importance of self-reflection and self-control in one’s trading. That's why we host weekly webinars to discuss topics such as mindfulness and self-awareness. By incorporating these practices into your trading routine, you can improve your mental and physical health, become a more disciplined and successful trader, and ultimately achieve better results in the financial market.
Conversations like these are what we strive for in our weekly webinars. Connecting the fundamentals of technical analysis with current market conditions and additional insights is what sets YellowTunnel apart from the rest. Not only do I bring a personal touch, combined with top-of-the-line A.I., but also key psychological pillars.
Our community is designed to provide you with a unique trading experience where you can benefit from our A.I. trading program and learn while looking over my shoulder.
For more information on the YellowTunnel tools and our trading community, I suggest reviewing our latest Strategy Roundtable, which we hold weekly on YellowTunnel. I also recommend checking out our latest Roundtable webinar in its entirety below:
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 for 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.
CURRENT TRADING LANDSCAPE
The stock market ended the week on a high note as key U.S. inflation and spending data reinforced expectations for a more dovish Federal Reserve. The three major U.S. indices closed in the green, with hopes of cooling inflation and concerns over the health of banks after two lenders failed in March defining a volatile first quarter.
The core personal consumption expenditure (PCE) prices index, the Federal Reserve's preferred inflation gauge, rose 4.6% year-over-year in February, slightly below economists' forecasts of 4.7%. This supports the idea that the central bank may maintain its accommodative monetary policy stance after last year's rate hikes led to a drop in equities. The Fed's preferred inflation gauge rose at a 0.3% monthly pace in February, marking a slight slowdown from the previous month as pricing pressures show signs of easing.
The cost of U.S. goods and services increased by a more mild 0.3% in February, indicating that the Fed's fight against high inflation is making progress. This is in contrast to January, when prices had risen by a sharp 0.6%, according to the so-called PCE index. The yearly increase in prices declined to 5% from 5.3% in the preceding month, representing the lowest level in more than a year and a half. Nevertheless, this is still about three times the rate of inflation before the pandemic. Consumer spending also stabilized in February, falling 0.1% when adjusted for rising prices, after surging a revised 1.5% at the start of the year. This suggests that the Fed's fight against high inflation is making progress.
The Fed is trying to bring inflation back down to its 2% target without causing a severe economic reaction, straddling a fine line. The central bank pays close attention to the core gauge that strips away volatile food and energy costs. While the Fed has reduced the federal funds rate by a quarter-percentage point in March, down from previous increases of a half-percentage point, there are still concerns about a potential downturn if inflation remains high.
Bank worries have weighed on markets, though fears are easing as signs of bank stabilization appear. This has helped more rate-sensitive growth stocks outperform. However, uncertainty still looms as the upcoming earnings season is expected to be crucial for the market's future direction. Analysts predict a decline in earnings per share in the first quarter of 2023 compared to the previous year, which could further dampen investor sentiment.
Despite these uncertainties, the latest economic data has added some positive sentiment to the markets. Wall Street showed mostly positive results to open and close the week, with stocks trading higher and investors focusing on the banking sector. The technology sector is driving a slight upward trend as fears about banking turmoil ease, and short-term Treasury yields decline, indicating a general shift towards safe-haven assets.
The upcoming earnings season is expected to be crucial for the market's future direction, with analysts predicting a decline in earnings per share in the first quarter of 2023 compared to the previous year. The uncertainty surrounding this is compounded by comments from several Federal Reserve officials about the central bank's potential moves at its next meeting.
In recent developments, Richmond Fed President Thomas Barkin has stated that there is a "pretty wide" range of outcomes for the May meeting, while Boston Fed President Susan Collins anticipates "modest" additional tightening. Minneapolis Fed President Neel Kashkari has also emphasized the need for the Fed to do more to bring service-sector inflation down. However, the latest economic data has provided some positive sentiment to the markets, with a slight increase in the number of people filing for unemployment benefits in the US last week—above economists' projections.
Although the market hasn't changed from last week, there has been remarkable news concerning Micron’s (MU) earnings and the latest Fed comments, for example: despite the disappointing results, its stock is still trading higher. With interest rates continuing to remain steady and not declining, analysts anticipate that the current momentum will continue for weeks to come until corporate earnings season commences—when sell-offs are expected once again.
As we wrap up the first quarter of 2023, the stock market continues to show signs of volatility. However, positive economic data and signs of bank stabilization are providing some relief to investors. While concerns over a potential downturn and the Federal Reserve's next move continue to loom, market participants are cautiously optimistic about the future direction of the stock market. Having reviewed these levels, I believe I have identified the next Power Trading & Markets symbol, but let's check our AI data first. See $SPY Seasonal Chart:
Given the expected sideways trading in the market for the next two to eight weeks, we recommend remaining market-neutral and encourage subscribers to hedge their positions. The VIX is currently trading near the $21 level, and upcoming earnings reports from companies like Micron (MU) and Walgreens (WBA), along with liquidity issues in regional and global banks, could influence the market’s next move. The SPY has overhead resistance levels at $402 and then $408, while support is at $392 and then $384.
With this in mind, we have identified the next PTM symbol to keep an eye on, and if the right entry point presents itself, we will be adding it to our portfolio.
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The SPDR S&P Homebuilders ETF ($XHB) is an exchange-traded fund that tracks the performance of the U.S. homebuilding industry. Launched in 2006, it is managed by State Street Global Advisors and consists of a diversified portfolio of companies engaged in home construction, including manufacturers of building materials and housing-related retail companies. Furthermore, the fund includes home builder companies designing and constructing new homes, as well as those that remodel and renovate existing ones.
The SPDR S&P Homebuilders ETF has a broad scope and invests in both small- and large-cap companies, providing investors with exposure to the US housing market. Its performance is highly correlated with the broader economy, making it a useful tool for investors seeking exposure to the US real estate market as well as to the wider economy.
XHB is a popular choice for investors looking to gain exposure to the U.S. homebuilding industry and provides a diversified and comprehensive investment option in this sector. Likewise, our A.I. toolset is also seeing strong signals for homebuilders in the upcoming quarter.
XHB is sporting a grade of "B," which puts it in the top 25% of accuracy within our data universe. It has sold off its recent highs, giving us a great entry price for the homebuilder ETF. Similarly, when reviewing our long-term forecast tool for XHB, the Seasonal Chart, we see additional encouraging signals. XHB is forecasted to trade higher right out of the gate with the 20-day range indicating a "higher" signal, while also showing an increase in its value over the 40-day period. See $XHB Seasonal Chart:
If home builders are due for a pop higher, then it would be prudent to add a symbol from the sector to our portfolio - and I think I have just the symbol.
TRADE OF THE WEEK - #1 Wealth Builder
PulteGroup Inc. (PHM) is an American home construction company that designs and builds homes in various markets across the United States. Founded in 1950, PHM has become one of the largest homebuilders in the country, with operations in 44 markets and 23 states. The company's portfolio includes a diverse range of homes, from single-family homes to townhomes and condominiums, catering to a broad spectrum of buyers.
PHM has a reputation for building high-quality homes and providing excellent customer service. The company's focus on customer satisfaction has earned it numerous awards and accolades over the years. The company has consistently generated solid revenue and earnings growth over the years. In 2021, the company reported revenue of $11.3 billion, an increase of 15% compared to the previous year. Net income for the same period was $1.6 billion, a significant increase compared to the $1.1 billion reported in 2020.
Currently, PHM trades at around $58 and has moved off its 52-week high of $60.89. The stock has made impressive gains over the last year but offers a unique entry point considering the Fed's outlook and latest levels of inflation. As the market continues to be volatile, it appears homebuilders have found steady footing. Our A.I. data appears to agree as well.
When looking at our 10-day forecast for PHM, we see a steady and consistent directional vector trend. The positive trend grows throughout the 10-day forecast, which is exactly the kind of trend we look for in bullish symbols. With our reading of the market and homebuilders, PHM's A.I. forecast is only adding to my confidence in the symbol. See 10-day PHM forecasted data:
Looking at PHM's seasonal chart, we see a reading that is very similar to XHB's forecast. PHM is slated to trade higher in the 20- and 40-day time frames according to our long-term forecast. With an impressive accuracy score, PHM's long-term data is showing that the symbol has several opportunities to boom in the coming days. See $PHM Seasonal Chart:
This week, I’ll be adding $PHM to my portfolio!
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The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 84.76% of all trades that I made, with an average profit of 37% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind that stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.
Go to our website at www.yellowtunnel.com and make one of our services your default trading system where the AI that powers my all-world, the proprietary platform, can help you make 2023 the best trading year of your portfolio yet!
One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:
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