This Week's AI Pick: Buy Applied Materials ($AMAT)
A Frosty New Year's Escape: Skiing in Wisconsin and the Power of Rest
As the clock struck midnight on December 31, 2025, our group of friends and family toasted to new beginnings not in a crowded city square, but atop the snowy slopes of Wisconsin. We chose Devil's Head Resort in Merrimac for our annual getaway—a perfect blend of adventure and togetherness. Bundled in layers against the crisp Midwestern chill, we kicked off the year with exhilarating ski runs under a starry sky, laughter echoing as beginners like my niece tumbled into powder drifts while pros carved expert trails.
The days blurred into joyful chaos: morning hot cocoa by the lodge fireplace, afternoon races down groomed hills, and evenings around bonfires sharing stories. My brother-in-law grilled brats on the deck, kids built snow forts, and we all cheered during a makeshift fireworks show. Wisconsin's rolling terrain offered something for everyone—gentle bunny hills for the little ones and challenging black diamonds for thrill-seekers. It was a reminder of how shared experiences strengthen bonds, turning acquaintances into lifelong pals.
But amid the excitement, we prioritized rest. After long days on the slopes, we lounged in the hot tub, napping and recharging. This downtime wasn't laziness; it was essential. Rest sharpens focus and prevents burnout in any pursuit. Take trading, for instance—my passion at YellowTunnel. Without adequate sleep and breaks, decisions become impulsive, leading to costly errors. Just as fatigue on skis risks injury, in trading, it clouds judgment on market volatility. Studies show rested minds perform 20% better in high-stakes activities. Whether gliding down a mountain or navigating stocks, balance action with recovery for peak performance.
This New Year's taught us: Celebrate hard, but rest harder. Here's to a rejuvenated 2026!
Review of Recent Trade: Amazon.com ($AMZN)
One of the trades I want to highlight from this past week was Amazon.com (AMZN) — a setup that came directly from our Dynamic Power Trader (DPT) services. Early in the week, the DPT model flagged AMZN as a high-quality long opportunity, and we walked through the thesis and execution process in real time inside our Live Trading Room.
This is also a great example of one of the biggest differences between our paid and free services: with the paid services, you’re not just getting ideas — you’re getting timely, actionable execution support. That includes SMS alerts that help you know when to enter and when to exit, so you’re not guessing or reacting late when the market moves quickly.
If you want to see exactly how we identified the setup and how it played out, you can watch the Live Trading Room recording from last Tuesday here: https://yellowtunnel.com/live-trading-room-recordings#live-trading-room-recordings
Current Trading Landscape
This week felt like a market that wants to go higher—but is having to earn every inch. Volatility stayed unusually calm with the VIX near 14, and yet the underlying tone was more selective as investors rotated between “what’s working now” rather than blindly buying everything. By Friday, the tape turned constructive again: the S&P 500 was up about 0.6%, the Dow added roughly 260 points (+0.5%), and the Nasdaq gained around 0.8%, putting the major indexes back in striking distance of fresh closing highs.
Rates continue to be the quiet driver in the background. The 2-year yield moved up near 3.51% and the 10-year hovered around 4.19%, reinforcing that we’re still trading in a world where the bond market can tighten financial conditions quickly—even when stocks are near all-time highs. And zooming out, the 10-year has been volatile in a wide 3.6%–4.2% range, which is another way of saying: this equity rally is living with a “higher-for-longer” shadow.
Key News Highlights
The week’s narrative was dominated by tariffs and macro, not earnings. On Friday, stocks briefly dipped when the Supreme Court did not release a ruling on President Donald Trump’s use of the International Emergency Economic Powers Act related to tariffs—but the weakness didn’t stick. That response mattered: it showed investors are still willing to buy dips, even with headline risk hanging over the market.
Early in the week, geopolitical developments provided a surprise boost. The reported U.S. capture of Venezuelan leader Nicolás Maduro helped drive a sharp move in energy and oil-related names, as markets quickly repriced the possibility of shifting access to Venezuelan supply. That theme stayed hot as oil climbed around 2%, with traders tracking U.S. actions around Venezuelan shipments alongside mounting unrest in Iran. When energy bids up like that, it tends to spill into broader “real economy” leadership—industrials, value, and parts of the Dow—which we saw at various points this week.
Meanwhile, the CES 2026 headlines kept the AI storyline alive, with renewed excitement around chips, storage, and memory demand. At the same time, we also saw the other side of that trade: megacap tech pulled back in pockets as investors showed a more “price sensitive” mentality after years of outsized gains. The result wasn’t a collapse—more like a reminder that tech leadership is no longer effortless and valuations are being treated with more skepticism.
A notable mid-to-late-week shift came from policy priorities: President Trump’s call for a much larger future defense budget pushed capital toward defense and industrial names. That rotation helped the Dow’s tone even when Nasdaq leadership softened—another sign the market is trying to broaden out beyond a handful of AI winners.
Finally, Friday’s December jobs report landed with a “cooling but not breaking” vibe. The economy added 50,000 jobs (below expectations around 55,000), but the unemployment rate fell to 4.4%, and November was revised down (from 4.6% to 4.5%). It’s not a recessionary print, but it does reinforce that the labor market is losing some heat.
Consumer psychology was slightly better: the University of Michigan’s consumer sentiment index rose to 54 from 52.9, the highest since September—yet still well below last year’s levels, reflecting ongoing pressure from higher prices and “kitchen table” concerns.
Market Sentiment
The market’s mood is best described as resilient, but increasingly selective. When volatility is this low and indexes are this high, investors don’t need much of an excuse to take profits—and we saw that in the choppy rotations. But the bigger tell is how quickly the market stabilized after tariff-related jitters and how leadership broadened beyond pure AI megacaps into energy, defense, and value/cyclicals.
At the same time, the bond market is keeping stocks honest. With yields staying elevated and swinging inside a wide range, the market is being forced to price in the possibility that inflation remains sticky, policy stays restrictive, and equity multiples can’t expand forever.
My Personal Sentiment & Guidance Forward
I’m in the market-neutral camp right now because momentum has deteriorated, even as the indexes sit near record levels. The risk is straightforward: interest rates stay higher for longer, and unemployment continues to tick up, which can slowly drain confidence and compress valuations—especially in the most expensive corners of the market.
From a roadmap perspective, I still see room for the SPY rally to extend toward the $700–$720 zone, but I’m treating $650–$660 as the key near-term support band over the next few months. As long as that support holds, the long-term trend remains intact—but the market is no longer rewarding complacency.
Going into next week, I’m watching three things closely: interest rates—especially the direction of the 10‑year, which matters as much as any headline right now—tariff developments, since they can quickly shift inflation expectations and sector leadership, and overall market breadth and rotation to see whether strength continues to expand beyond megacap tech. In this environment, my playbook is to stay disciplined: keep position sizes sensible, respect support levels, and focus on the areas of the market attracting real flows rather than the loudest narratives.
In this environment, my playbook is to stay disciplined: keep position sizes sensible, respect support levels, and focus on the parts of the market attracting real flows—not just the loudest narratives.
JP Morgan Earnings in 4 Days (Our Last Trade: 125% in 2 Days)
125% return on Cisco. In just 2 days.
That's not a typo. On November 14th, we traded $CSCO around their earnings and walked away with 125% gains in 48 hours.
But here's what's even better: It wasn't luck.
Earnings season is the most predictable time of year to make money in the stock market.
Every quarter, thousands of companies report earnings. Stock prices explode—sometimes 20%, 30%, even 50% in a single day. The opportunity is massive.
The problem? Which stocks will actually move?
Find Out Now!
Sector Spotlight
There’s a very specific kind of leadership that shows up when markets are near all-time highs, volatility is oddly calm, and yet investors keep flinching at every headline. It isn’t the “storybook” rally where everything surges together. It’s the kind where money looks for the engines under the hood—the places where demand is structural, not sentimental, and where the next leg higher can be justified even if rates stay stubborn.
That’s exactly what this week’s tape has been hinting at. Tariff uncertainty briefly rattled the market, the 10-year yield stayed jumpy inside its wide range, and big tech valuations felt a little more sensitive than usual. But underneath that, confidence didn’t disappear—it simply got more discerning. The market’s reaction function mattered: early-week enthusiasm around AI momentum didn’t vanish during the mid-week pullback; it rotated. Instead of treating “AI” as a single crowded trade, investors started gravitating toward the infrastructure that benefits whether the next move is euphoric or cautious.
Psychologically, that’s the tell. When investors still want exposure to growth but also want to reduce narrative risk, they tend to favor the parts of the chain that are hardest to replace. The “toll booths.” The foundational layer. The businesses are tied to multi-year capex cycles and real-world capacity buildouts. In a week when macro data mattered more than earnings—and rates reminded everyone that money isn’t free—this shift looked like a form of defensive positioning inside a risk-on market.
That’s why the sector I keep circling back to right now is semiconductors, with the VanEck Semiconductor ETF ($SMH) as the cleanest way to express it. SMH captures the center of gravity of modern tech demand—AI compute, data storage, networking, and the buildout cycle that follows. In a market where breadth is improving but conviction is selective, semis are showing the kind of momentum that often signals “the rally isn’t done—it’s evolving.” And when the crowd is unsure, the market tends to reward what it needs, not just what it likes.
Trade of the Week: Applied Materials ($AMAT)
If semiconductors are the market’s “infrastructure trade,” then the most interesting opportunities often sit one layer behind the headline names—where the economics are less about a single product cycle and more about the ongoing construction of capacity. This week’s landscape sets that up perfectly. We’ve got indexes pressing toward highs, a VIX that suggests complacency, and yields that keep nudging investors to be picky about what kind of growth they’re willing to pay for. In other words, the market is rewarding exposure to secular demand—while quietly penalizing anything that feels purely hype-driven.
That’s the backdrop for why my Trade of the Week is Applied Materials ($AMAT)—and why it’s a name I’m looking to add. AMAT isn’t just “in semis.” It’s tied to the process of semis: the equipment and services that enable manufacturers to expand, upgrade, and improve yields. When AI momentum gets reaffirmed—as we saw through this week’s tone coming out of CES and the ongoing demand narrative around compute and memory—the downstream implication isn’t only stronger chip sales. It’s also higher urgency to build and refine the manufacturing pipeline that feeds that demand.
What I like most about AMAT in this specific market is how well it fits the current psychology. When investors rotate away from crowded megacap stories but still want upside, they gravitate toward businesses that can participate in the theme without depending on perfection. AMAT tends to benefit from broad-based semiconductor investment—whether that’s leading-edge nodes, memory cycles, or the steady modernization that happens even in “choppy” environments. And in weeks like this one—where macro prints and tariff headlines can jolt sentiment intraday—owning the “picks-and-shovels” exposure often feels cleaner than chasing the most emotionally priced names.
The takeaway is simple: in a market-neutral posture, you don’t need to abandon opportunity—you need to choose the right kind of confidence.
Semis via $SMH reflect the market’s desire to stay invested in the future, and $AMAT is a way to express that same thesis with a sturdier psychological footing: not a bet on a single story, but on the buildout that keeps the whole story alive.
This week, I’ll add Applied Materials ($AMAT) 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 82.54% of all trades that I made, with an average profit of 39.48% 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 the end of 2025, now is the perfect time to reassess your trading strategy and take your portfolio to the next level for the upcoming year! 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!