📈 Consumer Staples Are Ripping Higher—Here's Our Top Pick
Coding Adventures with David: From AI Help to Flappy Bird Fun
It's been a wild ride lately, but honestly, one of the coolest things happening right now is watching my son, David, get into coding. Like any dad who’s a bit of a tech-head, I’ve always dreamed of him following in my footsteps, maybe even contributing to YellowTunnel someday. So I figured, why not start him young?
I spent a good hour badgering Grok on how to teach a 10-year-old to code and actually keep it fun. Grok, being the AI wizard it is, shot back some pretty solid advice: use VS Code as the IDE, install p5.vscode for easy game development, and start with tutorials for classics like Flappy Bird. I mean, who doesn’t love Flappy Bird?
David, bless his heart, is absolutely stoked. He’s diving into his “homework,” which now involves coding up new games and even using AI to tweak and discover new ones. The idea of building something from scratch, watching his creations come to life, and experimenting with AI to alter games has him buzzing. It’s been incredible to see his eyes light up.
The only hiccup? He’s not quite as thrilled about learning JavaScript syntax. I keep explaining that understanding the basic building blocks is key, but the instant gratification of game-building definitely outweighs the appeal of dry syntax rules for a 10-year-old. It’s got me thinking, though. Will we rely so heavily on AI in the future that we start losing some of those foundational skills, like writing code deeply and understanding how things truly work under the hood? Only time will tell.
For now, I’m just happy he’s having a blast and learning something new.
And honestly, the experience mirrors what we’re seeing in today’s market, especially in fintech and AI-driven trading. Tools are getting smarter. Models are getting faster. Signals are getting automated. It’s easier than ever to push a button and feel like you’re “building” something.
But there’s a subtle psychological trap there.
When AI lowers friction, it also lowers perceived effort. And when perceived effort drops, discipline can quietly erode. Investors begin to trust outputs without understanding inputs. They chase signals without understanding structure. They rely on automation without appreciating risk parameters.
Just like David wants to skip syntax and jump straight to the fun part, many traders want to skip market structure and jump straight to the trade. But syntax is what makes the game function. Structure is what makes the system stable. Risk management is what keeps the entire engine from crashing.
In this current environment, where AI narratives are driving leadership, flows are reacting instantly to headlines, and volatility can compress and expand in hours, understanding the building blocks matters more, not less. Technology is an amplifier. It magnifies both discipline and recklessness.
Fintech doesn’t remove psychology. It intensifies it.
The real edge isn’t just having access to advanced tools. It’s pairing them with foundational knowledge, emotional control, and intentional positioning. Just like coding, markets reward those who understand what’s happening beneath the surface, not just what flashes on the screen.
And that’s exactly the mindset we’re carrying into this week’s analysis.
Recent Trade Review: Exxon Mobil ($XOM)
This week inside our Dynamic Power Trader (DPT) service, the model identified Exxon Mobil ($XOM) as a long opportunity during Tuesday’s Live Trading Room session. Exxon Mobil, one of the world’s leading integrated energy companies, continues to show relative strength within the sector, supported by steady crude prices and disciplined capital management.
The DPT model flagged the setup based on favorable technical structure and clear risk/reward asymmetry. As we discussed live, this wasn’t about chasing headlines — it was about stepping into strength with defined risk and a structured plan.
If you’d like to review the full breakdown from the session, you can access the recording here:
https://yellowtunnel.com/live-trading-room-recordings#live-trading-room-recordings
It’s also worth highlighting the key difference between our free content and DPT membership. While free services share the analysis, DPT members receive real-time SMS alerts for both entries and exits. In a market that can move quickly, timely execution makes a meaningful difference. Watching a setup develop is valuable — but being positioned at the right moment is what drives results.
More opportunities are forming, and we’ll continue to let the model guide the process.
Current Trading Landscape
This was one of the most consequential macro weeks of the quarter. Inflation data, labor metrics, tariff developments, and a heavy earnings slate all hit within a compressed window, forcing investors to reassess the rate path and valuation assumptions almost simultaneously.
Markets entered the week still digesting January’s strong payroll report. The economy added 256,000 jobs versus expectations near 180,000, unemployment held steady at 4.1%, and wage growth accelerated to 0.4% month-over-month and 4.1% year-over-year. That combination materially reduced expectations for early 2026 rate cuts and pushed the market’s projected easing cycle further out.
Treasury yields responded accordingly. The 10-year continued trading in a wide 3.6%–4.35% range, and each move higher pressured growth multiples. With the VIX holding near 17 and major indices hovering around their 50-day moving averages, surface-level volatility appears moderate. However, beneath that calm exterior, leadership is shifting and momentum is deteriorating.
The Nasdaq was particularly sensitive to rate moves, struggling on sessions when real yields ticked higher. The S&P 500 and Dow held up relatively better but failed to generate sustained upside follow-through. The broader tape is not breaking down, but it is clearly searching for direction.
Inflation and Rate Expectations: The Pivotal Shift
Early-week data reinforced that wage pressure remains central to the inflation debate. The Employment Cost Index and trade price data did little to ease concerns about sticky services inflation. When CPI was released mid-week, it became the defining catalyst. While inflation showed modest cooling, it was not soft enough to alter the Federal Reserve’s cautious stance in a meaningful way.
What made the reaction more pronounced was the proximity of CPI to the strong labor report. Investors were forced to digest firm wage growth and inflation resilience together, compressing what might otherwise have been separate repricing events into one volatile stretch.
As a result, expectations for aggressive rate cuts faded further. Markets now anticipate a slower, more measured easing cycle in 2026. Real yields remain elevated, and that continues to challenge long-duration assets and high-multiple growth stocks.
The University of Michigan’s preliminary sentiment data added another wrinkle. Consumer confidence declined, and one-year inflation expectations rose back above 3%. While not extreme, that shift complicates the Fed’s messaging and reinforces the “higher for longer” framework.
The macro takeaway is clear: the economy is slowing at the margins, but not enough to justify imminent easing.
Overlaying the rate narrative was renewed tariff rhetoric. The administration reiterated that tariffs on Canada, Mexico, and China would remain unless further concessions are made, while additional pressure was directed toward the EU and India. Markets do not yet view this as a full-scale trade escalation, but the rhetoric adds friction at a time when valuations are already adjusting to higher real rates.
Cyclicals, industrials, materials, and small caps were more sensitive to these developments. The dollar strengthened during risk-off episodes, and intraday volatility increased as headlines crossed. While none of these moves triggered sustained panic, they reinforced the market’s narrower tolerance for uncertainty.
Policy clarity matters more when rates are restrictive. When liquidity is abundant, markets can absorb geopolitical noise more easily. In a tighter regime, each new risk factor carries greater weight.
Earnings season added nuance rather than direction. Applied Materials delivered strong results, supported by resilient semiconductor equipment demand and ongoing AI-related capital expenditures. However, even solid execution was met with volatility as investors weighed broader concerns about semiconductor cycle timing and stretched valuations across the chip complex.
Cisco reflected ongoing weakness in enterprise networking demand and cautious IT spending trends. While margins held up reasonably well, soft orders and guarded guidance reinforced the narrative of digestion across parts of the tech ecosystem. Robinhood posted strong revenue growth driven by trading activity and crypto volumes, yet sustainability debates and regulatory uncertainty limited upside follow-through.
Across other sectors, results were steady but unspectacular. Consumer staples names demonstrated resilience, industrial and commodity-linked companies provided mixed signals on global demand, and financials highlighted the continued impact of higher rates and tighter liquidity on capital markets activity.
The broader message from earnings is that the market is transitioning from multiple-driven expansion to a phase that demands durable cash flow, disciplined cost control, and realistic forward guidance. Investors are rewarding quality and punishing disappointment more quickly.
Technically, the market is at an inflection point. Major indices are consolidating near their 50-day moving averages, and breadth has weakened. Leadership is rotating away from crowded growth trades toward value, financials, industrials, and select energy exposure. Small caps have lagged, reflecting higher financing costs and trade sensitivity.
The VIX near 17 reflects caution but not stress. This is a recalibration phase rather than a disorderly unwind. Momentum has cooled, but there is no evidence of systemic pressure in credit or funding markets.
Rate volatility remains the dominant driver of rotation. As long as the 10-year yield remains volatile within its wide range, sector leadership is likely to remain fluid.
Forward Outlook and Positioning
In the near term, the market appears to be entering a more neutral, range-bound phase. The broader uptrend remains intact, but upside momentum has faded as rate expectations shift higher and macro uncertainty increases. SPY support is clustered in the 650–660 zone, while longer-term upside potential toward 700–720 remains viable if inflation trends stabilize and yields settle.
Our stance remains neutral. The structural backdrop for equities is not broken, but macro crosscurrents have intensified. Strong labor data, sticky wage growth, tariff uncertainty, and elevated real yields collectively argue for disciplined positioning rather than aggressive expansion of risk.
This is an environment that rewards selectivity. Investors are not capitulating, but they are reassessing valuation tolerance and time horizons. The market is no longer rewarding broad optimism. It is rewarding structure, cash flow durability, and measured risk-taking.
Patience, in this context, is not inactivity. It is strategic restraint while the macro picture clarifies.
12 Years. 82% Accuracy. Get Lifetime Access.
Keith Harwood and I have spent more than a decade building and refining a trading system that actually stands the test of time. Since 2020, it’s delivered an 82% accuracy rate* — and our members know exactly how powerful that is.
For Presidents Day, we’re doing something we’ve never done before.
We’re opening the doors to lifetime access to everything we do — every strategy, every alert, every training, every upgrade — permanently.
No subscriptions. No renewals. No hidden fees.
Just one payment of $1,197 for lifetime access.
If you’ve been waiting for the right moment to level up your trading, this is it.
Click here to learn more and lock in lifetime access.
Sector Spotlight
There’s a corner of the market quietly regaining credibility, not because it’s flashy, not because it’s tied to AI acceleration, and not because it promises explosive growth. Its appeal right now is stability.
In a week defined by rate repricing, sticky wage data, and renewed tariff rhetoric, investors were reminded how quickly leadership can rotate when real yields rise. Growth multiples compressed. The Nasdaq hesitated. Momentum thinned. And when conviction softens, capital tends to migrate toward predictability.
That’s exactly what we’re seeing now.
As the 10-year yield swung within its volatile range and consumer inflation expectations ticked higher, portfolio managers began reassessing exposure to longer-duration risk. When the cost of capital stays elevated and policy clarity remains limited, durable cash flows become more valuable. Businesses with consistent demand, pricing power, and steady margins begin to look attractive again.
This rotation isn’t driven by fear — the VIX near 17 tells us that. It’s driven by recalibration. Investors are not abandoning equities; they’re shifting toward sectors that can absorb macro uncertainty without relying on multiple expansion.
That sector is consumer staples, and the cleanest way to express that thesis is through the Consumer Staples Select Sector SPDR ($XLP).
$XLP represents companies selling everyday essentials — food, household products, personal care — areas where demand holds up even as economic momentum moderates. In a “higher for longer” rate environment, staples offer earnings durability and relative insulation from trade volatility and capital spending cycles.
Technically, $XLP has begun to stabilize after months of underperformance versus growth-heavy areas. Relative strength is improving as investors rotate toward quality and defensive balance sheets. If yields remain elevated and macro data stays mixed, this rotation likely continues.
The actionable idea here is straightforward: Look for $XLP on pullbacks, using recent consolidation as a defined risk framework.
In a market that is no longer rewarding optimism alone, staples offer something increasingly valuable — consistency. And right now, consistency is gaining traction.
Trade of the Week
If the sector case is about stability, the stock case is about execution.
This week, as investors digested higher wage growth, cautious rate expectations, and fragmented earnings reactions, one theme stood out clearly: companies with durable demand and pricing discipline are being rewarded more consistently than those dependent on macro acceleration.
That brings us to Clorox ($CLX).
Clorox sits squarely within the consumer staples thesis but offers a more focused opportunity. The company has been working through supply chain normalization and margin recovery over recent quarters, and sentiment around the name has quietly improved. With inflation moderating but still present, companies that successfully pass through pricing without materially hurting demand are regaining investor confidence.
From a technical perspective, CLX has been building a constructive base after prior volatility. As yields pushed higher this week and growth stocks wavered, staples names like CLX began to see relative inflows. In an environment where earnings durability matters more than speculative upside, CLX fits the bill.
Importantly, this week’s broader market narrative strengthens the case. Rising real yields pressure high-multiple tech. Tariff uncertainty weighs on industrial cyclicals. Slowing but resilient consumer data support essential spending categories. The macro backdrop favors steady operators with pricing power and cash flow visibility.
I will be adding CLX to my portfolio, viewing current levels as an opportunity to position into a sector benefiting from rotation and a stock with improving fundamentals and constructive technical structure.
The bigger picture ties back to psychology. When markets shift from expansion to recalibration, leadership doesn’t disappear — it changes. Investors move from chasing acceleration to protecting durability. Staples and names like CLX are not about excitement; they’re about resilience.
In this phase of the cycle, resilience compounds.
And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 82.48% of all trades that I made, with an average profit of 39.39% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice, where our numbers and results speak for themselves.
As we step into 2026, shifting market conditions make this an ideal moment to reevaluate your trading approach and position your portfolio for the opportunities ahead. Explore the full suite of tools and services at www.yellowtunnel.com and choose the trading system that aligns with your goals for the new year. Powered by advanced AI and built for today’s fast‑moving markets, YellowTunnel helps you cut through noise, sharpen your strategy, and pursue stronger, more consistent performance in 2026.
Whether you’re focused on real-time trade opportunities, advanced analysis, or developing a disciplined trading mindset, we’ve got the tools and insights to guide you. As the year unfolds, let's work together to make 2025 the most profitable year for your portfolio. But remember—successful investing starts with informed decisions. Always conduct thorough research and assess your risk tolerance before executing any trades.
Let’s make this year a transformative one for your financial growth!
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:
Wishing you a week filled with resilience, growth, and prosperous opportunities!