An Economic Storm is Brewing: Is Your Stock Portfolio Safe?

It seems like everywhere you turn these days, pickleball is popping up. Just last week, a group of my friends and I started a new pickleball club, and before I knew it, we were all hooked. From casual weekend games to ultra-competitive matches, it’s become a fast-paced obsession—well, unless you’re nursing a back injury like I am. Whether you're playing for fun or driven by the thrill of competition, the pickleball craze has swept everyone off their feet. Courts are springing up left and right, taking over everything from tennis courts to unused spaces in once-forgotten shopping malls. Even the pros are getting in on the action, with major athletes endorsing this "sport of the moment."

It reminds me of how certain trends can take the market by storm. Just like the pickleball courts popping up everywhere, we’ve seen major investment trends like Bitcoin, electric vehicles (EVs), and artificial intelligence (AI) reach new heights. The key with any trend, whether in sports or stocks, is knowing when the mania will end and how much exposure you're comfortable with.

This week, we saw a similar wave of excitement hit the financial markets as the latest labor reports were released. Much like gauging your readiness to dive headfirst into a new hobby, investors are eyeing the data closely, weighing how much risk they want to take amid shifting market conditions. Just as pickleball doesn’t seem to be fading anytime soon, neither does the hype around emerging sectors like weight loss drugs, which have captured investor attention recently.

In this week's newsletter, we’ll break down how these reports impacted the markets and explore which trends you might want to "serve up" in your portfolio next.

Recent Trade Review

In our latest trade spotlight, Zscaler, Inc. ($ZS) took center stage, a perfect example of how easy it can be to find winning trades with our Earnings Power Trader (EPT) model. The system pinpointed $ZS for its extreme call-buying demand and elevated gamma levels, signaling a high-probability short opportunity. For those subscribed to our EPT services, this trade was executed seamlessly, following the exact signals our model provided.

If you missed the action, don’t worry! You can watch last Wednesday’s live trading room session, where we fully broke down the $ZS trade from start to finish. Transparency is key at YellowTunnel, and we make sure you can see every step of the process. Check out the full recording here: Live Trading Room Recording.

One of the biggest advantages of our paid services is the simplicity and clarity they bring to trading. With real-time SMS alerts, you’re notified exactly when to get in and out of trades, so there’s no guesswork involved. This transparency ensures you're always aligned with our market strategies, making it easier than ever to capitalize on opportunities like the one we identified with $ZS. Unlike our free services, which offer general insights, our paid services provide precise, actionable steps to keep you ahead in the market—making winning trades easier and more accessible.

CURRENT TRADING LANDSCAPE 

The market has kicked off September with a sharp pullback, driven by weaker-than-expected macroeconomic data and heightened volatility. Disappointing labor and economic reports this week have deepened fears that the Federal Reserve may be behind the curve, despite growing expectations of a quarter-point rate cut later this month. All three major U.S. indices saw significant declines, with the Nasdaq down 5.5%, the S&P 500 falling 4%, and the Dow losing 2.7%. The tech-heavy QQQ has dipped below its 50-day moving average, underscoring the broader risk-off sentiment.  Looking at these levels, I am seeing S&P 500 resistance in the 560–575 range, while key support lies between 480–510. For reference, the SPY Seasonal Chart is shown below: