Market Sell-Off: Hedge Your Portfolio Now
My New Obsession: Stella and the Glucose Game
Hey there, friends! I’ve got a confession to make—I’m completely obsessed with my new toy, Stella. If you haven’t heard of it, Stella’s a glucose monitoring device, and let me tell you, it’s been a game-changer for me. I’ve been prediabetic since I was 18 (yep, that’s over three decades of wrestling with this), and as I creep closer to the big 5-0, I’ve realized I can’t keep ignoring those pesky glucose levels. Reading The Diet Evolution by Dr. Steven Gundry hit me like a ton of bricks: elevated glucose isn’t doing me any favors, especially as I approach this milestone. So, I took the plunge and got myself a Stella—and now, I’m hooked.
The Stella Effect
Here’s the deal: Stella lets me check my glucose levels in real-time, and I’m not exaggerating when I say I’m testing every 15 minutes. Okay, maybe not exactly every 15 minutes, but pretty darn close! It’s like having a little health coach on my arm, giving me instant feedback on how my body’s handling what I eat, how I move, and even how I sleep. I’ve been struggling with glucose spikes for years, but seeing the numbers right there in front of me? It’s a wake-up call and a motivator all rolled into one.
Since I started using Stella, I’ve dropped 20 pounds. Twenty! I didn’t even realize how much those sneaky glucose spikes were holding me back. Dr. Gundry’s book opened my eyes to how diet impacts everything—energy, weight, and even how I feel day to day. Armed with Stella’s data, I’ve been tweaking my habits like a mad scientist. A handful of almonds instead of a cookie? Glucose stays steady. That late-night bowl of cereal? Nope, not worth the spike. It’s empowering to finally feel like I’m in control after all these years of guesswork.
The Meal Plan Mission
Now, here’s where it gets fun—my wife’s on board, and we’re turning this into a team effort. She’s optimistic and excited to be part of the journey, which makes it so much easier. I’ve been brainstorming new menu ideas for her to cook, and she’s loving the challenge. We’re ditching the old standbys (sorry, mashed potatoes) and experimenting with stuff that keeps my glucose in check. Think grilled chicken with roasted Brussels sprouts, zoodles with a killer marinara, and maybe some salmon with a side of sautéed kale. I’m trying to keep it simple but tasty—nothing too fancy, just good food that doesn’t send my numbers into orbit.
She’s been a champ about it, flipping through recipes and asking, “Will this work for Stella?” It’s cute, honestly. We’re still figuring it out, and some nights are a total win while others are… let’s call them learning experiences. But the fact that she’s excited to help me on this prediabetes journey? That’s worth more than any perfect meal.
What This Has to Do With Markets
This experience has made me think a lot about the stock market. Managing glucose is all about tracking the right signals, adjusting based on data, and maintaining discipline—exactly like successful trading. When I wasn’t paying attention to my glucose levels, I was flying blind, making choices without understanding the long-term impact. The same happens to traders who don’t track the market properly. They react emotionally instead of strategically, and that’s when mistakes happen.
Last week, the market had its own version of a glucose spike. The S&P 500 and Nasdaq just snapped a five-quarter winning streak, and the first week of Q2 saw a sharp selloff following surprise tariff announcements and shifting Federal Reserve expectations. Investors who were blindly riding the rally suddenly found themselves in panic mode, much like someone who indulges in too much sugar and crashes hard afterward.
Like my glucose monitoring, smart trading isn’t about avoiding every bump in the road—it’s about being aware of what’s coming and making adjustments before a crisis hits. The key is using real-time data to stay ahead, whether it’s monitoring glucose levels or market volatility. Just like I learned that swapping out carbs for healthier choices keeps my energy steady, traders need to know when to rotate into defensive sectors or adjust risk exposure to keep their portfolios balanced.
Trading Psychology Insight: The Power of Real-Time Feedback
One of the biggest lessons I’ve learned—both in my health journey and in trading—is the power of feedback. Without Stella, I was making educated guesses, sometimes getting it right, but often getting it wrong. With real-time data, I’ve been able to make informed decisions that actually stick. In the markets, the same principle applies. Traders who rely on gut feelings or outdated strategies often find themselves blindsided when conditions shift. But those who track key indicators, stay disciplined, and make data-driven adjustments? They’re the ones who weather volatility and come out stronger.
Whether it’s your health or your portfolio, success isn’t about perfection—it’s about consistency, discipline, and knowing when to pivot. As I keep refining my glucose strategy, I can’t help but think about how traders can apply the same mindset to managing risk, adapting to market conditions, and staying ahead of the curve.
So, what signals are you tracking in your life—financially or otherwise? And if you happen to have any low-glucose recipes, send them my way—I’m always looking for ways to keep things steady.
Recent Trade Review
Last week, our Dynamic Power Trader (DPT) model identified Invesco QQQ Trust (QQQ) as a prime short opportunity. Acting on this signal, I executed a QQQ options trade, which we discussed in last Wednesday's Live Trading Room session. If you missed it, you can review the recording here.
One major advantage of our paid services over free offerings is the real-time SMS alerts, ensuring you receive precise entry and exit signals as market conditions shift. Timely execution is critical in fast-moving trades like this, and our system is designed to keep you ahead of the curve.
Stay tuned for our next trade setups as the market continues to offer new opportunities!
CURRENT TRADING LANDSCAPE
The opening week of Q2 2025 marked a dramatic turning point in investor sentiment, as the S&P 500 and Nasdaq Composite snapped their five-quarter winning streaks. The sell-off was intensified by a barrage of unsettling developments, including a surprise tariff announcement from former President Donald Trump and unexpectedly strong labor market data, both of which upended expectations for near-term Federal Reserve rate cuts. These combined forces triggered severe quarterly market losses and ushered in a climate of heightened volatility and uncertainty.
Investors entered the new quarter already grappling with an increasingly complex economic backdrop. Hopes for a soft landing were under pressure as persistent inflation, rising bond yields, and a resilient labor market complicated the Federal Reserve’s path forward. The new tariff regime, which risks reigniting global trade tensions, only added to investor anxiety. In the days ahead, the market's trajectory will likely be shaped by how the Federal Reserve responds to these inflationary pressures and whether geopolitical trade disruptions deepen. For now, the SPY appears range-bound, with potential resistance in the $500–$520 zone and immediate support between $480–$500. For reference, the SPY Seasonal Chart is shown below:
Weekly Recap
The week began with investors cautiously optimistic, but that tone quickly reversed by Monday afternoon. Concerns over the Fed’s next steps in the face of hot economic data sparked a broad-based sell-off that continued into Tuesday. Growth stocks bore the brunt of the decline, while defensively oriented sectors like utilities and consumer staples found modest support from dip buyers seeking shelter from market turbulence. The Nasdaq attempted a weak rebound but remained firmly within a downward channel, underscoring persistent sector weakness.
By Wednesday, market volatility escalated sharply. The ADP private payrolls report showed a labor market that remained too robust for comfort, reinforcing the notion that inflation could stay elevated for longer. Treasury yields climbed as a result, and the strengthening U.S. dollar added further headwinds for multinational corporations. The VIX climbed significantly, reflecting mounting investor unease and a rapid shift into risk-off positioning.
Thursday delivered the biggest shock of the week—and possibly the quarter. On April 2, former President Donald Trump announced a sweeping new tariff plan, effective April 5. This included a baseline 10% tariff on all imports, with additional punitive rates levied against key trading partners: 54% on China, 24% on Japan, 32% on Taiwan, and 46% on Vietnam. The market’s response was immediate and brutal. The Dow Jones Industrial Average plummeted by nearly 1,700 points in its worst one-day drop since 2020. The S&P 500 and Nasdaq suffered similarly severe declines, as fears of a global trade war triggered a cascade of selling in equities and sent shockwaves through global markets. Safe-haven assets like gold and Treasury bonds briefly rallied before volatility returned to bond markets as well.
Technology stocks were among the hardest hit, with major names like Apple, Amazon, and Meta falling between 9% and 10% on the week. Semiconductor firms, heavily exposed to Asian manufacturing and exports, were especially vulnerable, dragging down the entire chip sector. Automotive stocks suffered under the weight of expected input cost inflation while consumer-facing multinationals like Nike and Lululemon faced steep declines tied to concerns over rising production expenses and deteriorating global demand. Meanwhile, the Russell 2000 index dropped more than 5% in a single day, reflecting the vulnerability of smaller U.S. companies to domestic economic shocks.
The market's downward spiral continued into Friday, despite a stronger-than-expected March jobs report, which showed 228,000 new jobs added versus the consensus estimate of 130,000. Rather than calm nerves, the data suggested the labor market was still too strong for the Fed to consider aggressive monetary easing. Overnight futures fell sharply after China retaliated with 34% tariffs on U.S. imports, adding fuel to the growing economic fire. The S&P 500 fell another 3.2% during Friday’s session, capping off a two-day slide of more than 8%—its worst back-to-back losses since the COVID-19 pandemic. Further stoking fears, Trump posted a message on social media titled “Trump is Purposely CRASHING The Market,” which fueled speculation that he was attempting to manipulate the Fed into policy action. He also called for Powell to make a move which preceded Powell’s press conference on Friday.
As markets reeled from the selloff and tariff shock, Federal Reserve Chair Jerome Powell delivered a cautionary message on Friday that added to the growing unease. Addressing the economic fallout from former President Trump’s sweeping tariff announcement, Powell warned that the impact could be more severe than initially anticipated.
He noted that the newly announced tariffs are “highly likely” to cause at least a temporary spike in inflation—but also acknowledged the possibility of more lasting effects. The degree to which inflation persists, he said, will depend on several factors, including the scope and duration of the tariffs, the size of their economic impact, and how quickly they feed through to consumer prices.
Powell flagged the risk of stagflation—a scenario marked by stagnant growth and rising prices—as a looming concern. While not yet a certainty, he emphasized that the threat is real, particularly if inflation expectations become unmoored. “The outlook remains highly uncertain,” Powell said, pointing to elevated risks of both higher inflation and rising unemployment. He expressed hope that some of this uncertainty would dissipate by next year, but offered no guarantees.
Avoiding prolonged inflation, he stressed, hinges on keeping long-term inflation expectations anchored. With geopolitical tensions rising and growth prospects dimming, Powell’s remarks signaled growing alarm at the Fed over the tightening squeeze between inflation and economic deceleration—an increasingly difficult environment for policymakers to navigate.
Rate Cuts, Treasury Yields, and the Path Ahead
Despite resilient labor data, the bond market has quickly repriced expectations for monetary policy. The number of anticipated rate cuts for 2025 has risen to four, up from just two earlier in the month. The probability of a rate cut at the Fed’s June meeting now stands at over 70%, reflecting the widespread belief that the central bank will be compelled to act to mitigate economic damage stemming from trade disruptions and market stress.
The 10-year Treasury yield continues to reflect this uncertainty, oscillating between 3.6% and 4.8%. Recently, yields have retreated as inflation indicators began to cool slightly. Meanwhile, the VIX has surged above 30, a level not seen since the banking crisis of early 2023, and all three major indices have broken below their 200-day moving averages—an important technical signal of a broader market correction exceeding 10% from recent highs.
In the face of escalating trade tensions, rising volatility, and a tightening financial backdrop, I remain firmly in the market-neutral camp. While oversold conditions may support a short-term relief rally—potentially pushing the SPY toward resistance between $500 and $520—the broader outlook remains cautious. Immediate support in the $480–$500 range could be tested again if volatility persists. Until there's greater clarity on monetary policy, trade developments, and economic resilience, I expect the market to remain highly reactive and vulnerable to further downside pressure.
You might be scared—and that’s understandable.
Tariffs. "Liberation Day." Spiking volatility.
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SECTOR SPOTLIGHT
As the market braces for further turbulence, investors are carefully assessing opportunities that allow them to hedge against the growing downside risk. With recent volatility spiking and breaking long-standing upward trends, the search for inverse positions has become more relevant than ever. The unpredictability surrounding inflationary pressures, shifting Federal Reserve policies, and new geopolitical tensions present a unique environment—one that could reward those who look to capitalize on broader market declines. While many traders are still digesting the impact of rising bond yields and strong labor data, a strategic move in inverse ETFs may offer a critical opportunity to navigate this uncertain period.
One inverse ETF that stands out in this volatile environment is ProShares Short S&P 500 ETF (SH). This ETF seeks to provide the inverse performance of the S&P 500, making it a valuable tool for those anticipating further downside movement in the broader market. Given the current backdrop—where the S&P 500 and Nasdaq Composite have snapped their five-quarter winning streaks, and the market is reacting negatively to news like Trump’s surprise tariff announcement—SH presents an intriguing opportunity for those looking to profit from potential further declines.
The ongoing turbulence, including the unexpected tariff hikes announced by former President Donald Trump and strong economic data that suggests inflationary pressures might persist longer than expected, signals a period of increased market stress. As such, SH offers a timely inverse play for those who believe that the broader market is still facing substantial headwinds, especially as geopolitical uncertainties and the Fed's next steps remain key unknowns.
With the S&P 500 now breaking below its 200-day moving average and facing resistance in the $500–$520 range, SH’s appeal is further amplified. As we saw last week, the announcement of new tariffs and the accompanying market reaction—which led to an almost 1,700-point drop in the Dow Jones—underscores the potential for even further downside pressure. These tariff-induced shocks have already sent the markets into a volatile tailspin, and SH remains a compelling choice for those looking to capitalize on this downside momentum.
TRADE OF THE WEEK: $SH
Given the current market landscape, ProShares Short S&P 500 ETF (SH) emerges as a highly relevant trade for the upcoming week. The S&P 500 and Nasdaq Composite have been battered by a series of negative developments—ranging from stronger-than-expected labor data to a wave of geopolitical volatility, culminating in former President Trump’s announcement of new tariffs. The immediate impact of these factors has been clear: the market suffered severe losses, with the S&P 500 falling more than 8% over just two days, its worst back-to-back performance since the COVID-19 pandemic. The economic data has made it increasingly clear that the path for the Federal Reserve is much more complicated than anticipated, with no imminent rate cuts on the horizon as inflationary pressures continue to build.
The Trump tariff announcement, which could reignite global trade tensions, particularly with China, Japan, Taiwan, and Vietnam, has already sent shockwaves through the market, leading to broad-based sell-offs. On April 2, Trump unveiled tariffs ranging from 10% to 54% on various imports, immediately sparking fears of a full-blown trade war. The market responded accordingly, with the Dow Jones dropping nearly 1,700 points—the largest one-day decline since 2020. The Nasdaq, which is more tech-heavy, saw major stocks like Apple, Amazon, and Meta lose between 9% and 10% of their value, underscoring the vulnerability of growth stocks in this environment.
Given these developments, SH becomes an attractive inverse ETF for traders looking to profit from a continued downturn. SH’s primary value proposition is its ability to mirror the inverse of the S&P 500, making it a direct play on a market decline. With bond yields rising amid inflationary concerns and the VIX surging above 30, the market’s vulnerability to further shocks remains high. SH has historically performed well when broader indices like the S&P 500 are under pressure, as it capitalizes on falling stock prices in the index it tracks.
The technical outlook for the S&P 500 further supports this thesis. As mentioned in the Current Trading Landscape, the S&P 500 is facing immediate support between $480–$500, but the broader market remains in a precarious position. Should volatility persist—and the market’s range-bound behavior continues—the S&P 500 could revisit these support levels, offering SH a potential rally opportunity. If the market faces additional tariffs or negative earnings reports, SH stands to benefit from these further declines.
Moreover, SH’s potential for upside is supported by AI models, which reflect the ongoing market stress and indicate that the likelihood of further downside remains high. The AI models suggest that given the significant risk factors currently at play—particularly trade tensions, rising bond yields, and persistent inflationary pressures—SH could see sustained upward movement as the S&P 500 potentially tests and fails to hold key support levels in the near future.
In summary, the combination of market uncertainty, the potential for further downside in the broader indices, and support from AI models make SH a compelling buy for the week ahead. As geopolitical tensions, trade wars, and economic instability continue to plague investor sentiment, SH offers a unique opportunity for traders looking to profit from a market under stress. With volatility on the rise and the S&P 500’s technical outlook remaining bearish, SH stands as a prime candidate for traders positioning themselves for further declines in the equity market.
This week, I’ll be adding ProShares Short S&P 500 ETF (SH) to my portfolio!
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 83.21% of all trades that I made, with an average profit of 38.05% 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 move into Q2, now is the perfect time to reassess your trading strategy and take your portfolio to the next level. Visit our website at www.yellowtunnel.com to explore our range of services and select one as your default trading system. With the power of our AI-driven platform, YellowTunnel is designed to help you navigate the complexities of the market, refine your strategy, and drive profitability in 2025.
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!