🚀 Sector Rally Started. Here's the Stock That Goes Parabolic
From Bats To Bacteria To Pickleball In Three Days
If you had told me last Monday that by Thursday I’d be back on the pickleball court, I would have told you you were crazy. Because on Tuesday night I was pretty sure I was not going to make it.
It started with something stupid. A bat in the house.
We have one dog who usually notices everything, but at 2 a.m. she was asleep and I was the one who heard the flutter in our bedroom. Small, fast, completely lost. We got it out, closed the windows, and I thought that was the end of it. It wasn’t.
The next morning I called my doctor just to be safe. He said the words no one wants to hear: if there was any chance you were sleeping in the same room, you need to start the rabies protocol. I’ve had a lot of shots in my life but the rabies series is a different mindset. You don’t wait to see if you feel sick. You just do it.
So I got the first round. I felt a little off that evening, tired, achy, but I figured it was stress. Then at 3 a.m. I woke up shaking. Not cold shaking. Deep, teeth-chattering, can’t-control-it shivers. My wife put her hand on my forehead and said, “You are burning up.” Thermometer said 106.
I have never seen that number on a thermometer for myself. I’ve had flu, I’ve had COVID, but I have never had shivers like that before. Full body, couldn’t get warm under three blankets, then sweating a minute later. For a second in the car on the way to the ER, I thought, this is it. This is how it turns.
In the emergency room they moved fast. Blood work, cultures, IV, monitors beeping. The doctor came back and said two things at once: yes, you need to continue the rabies shots, but that’s not what’s doing this. You have bacteria in your blood. Bacteremia. Your body is fighting hard and losing for the moment.
Hearing “bacteria in your blood” when you are lying on a gurney with a 106 fever does not bring peace of mind. I kept thinking about the kids, about Maya back at school, about David’s camp, about our anniversary trip that just happened. Life felt very thin in that moment.
Then the antibiotics started. IV antibiotics, strong stuff, straight into the vein. No pills, no wait and see. Within 12 hours the fever started to break. Within 24 hours the shivers stopped. By the second night I could sit up and eat. By the third morning my doctor looked at the new labs and said, “You turned the corner.”
Three days after I thought I might die in the ER, I was back on the pickleball court. Light game, no diving, my wife watching from the bench telling me to take it easy every five minutes. I was slow, I was sore, but I was there. The same court where I lost to the “beginner” couple at Blackberry Farm. It felt like a win.
People ask me what I learned. I’ve heard the cliche that life can change 180 degrees on a dime. It’s true, but you don’t really feel it until it happens to you. One day you are arguing about what plates Maya needs for her apartment, the next you are in an ER with a bat story and an IV pole. One day you are planning your next trade, the next you are just hoping your fever breaks.
The lesson for me is simple and not original, but it hit hard this time. Enjoy life while you have it. Play the extra game of pickleball. Rent the pontoon even if you don’t have rods. Go to the West Loop to watch a soccer game on a Tuesday. And try to stay healthy — move, sleep, eat like you mean it — because health is not guaranteed, it is rented every day.
I still have a couple more rabies shots to go. I still have follow-up labs. But I’m home. The dog is keeping a much closer watch on the ceiling now, which I appreciate.
If you hear a flutter in your house at 2 a.m., don’t ignore it. And if you feel off, don’t tough it out. Go get checked.
And maybe there’s a market lesson buried in all of this, too. Things can change much faster than we expect. One headline, one economic report, one unexpected event can completely alter the picture. That doesn’t mean we should live—or trade—in fear of what might happen next. It means we prepare for what we can, respect risk when it appears, and stay flexible enough to adjust when the facts change. You can’t control the bat, the bacteria, or the next market surprise. You can control how you respond.
I’ll see you on the court.
Recent Trade Review
For our recent trade review, I want to look back at Blackstone Inc. (BX), one of the opportunities identified through our Dynamic Power Trader (DPT) model. Blackstone is one of the world's leading alternative asset managers, and the DPT model identified BX as a long opportunity, giving us a defined setup rather than simply trying to predict where the broader market would move next.
That distinction becomes particularly important in a market where individual stocks can move sharply from session to session. BX demonstrated that volatility this week, including a strong 3.2% advance on Wednesday followed by renewed selling pressure on Thursday. The objective with DPT is to use our model to identify opportunities while maintaining a disciplined approach to entries, exits and risk management.
This is also where there is an important difference between our free content and paid trading services. In the free material, I can discuss the market, explain setups and show you what our models are seeing. With DPT, subscribers receive real-time SMS and email alerts with our entry and exit signals, helping them know when it is time to act rather than having to continuously watch the market themselves. Our Live Trading Room also provides an opportunity to watch the process and see how these trades are managed in real time.
If you want to see the BX trade and the process behind it, you can review last Thursday's Live Trading Room recording here:
Watch the Live Trading Room Recording
The larger takeaway is one I come back to frequently: finding an opportunity is only the first part of a trade. Knowing when to enter, when to exit and how much risk to take is what turns an idea into a trading plan.
Current Trading Landscape
The market is ending another volatile week near record territory, but the environment underneath the major indices has become considerably more complicated. The VIX remains near 15, suggesting investors are not pricing in significant near-term fear, while stocks continue to benefit from generally resilient corporate earnings and an inflation trend that has improved from its highs. At the same time, the bond market is sending a much less comfortable message. Long-term Treasury yields remain elevated, oil prices have risen amid the continuing conflict with Iran, fiscal concerns are growing, and the Federal Reserve continues to signal that the fight against inflation is not finished. The result is a market caught between strong underlying momentum and a growing list of macro risks.
The biggest story this week was arguably not in stocks at all—it was in the Treasury market. Long-term yields surged to levels not seen in nearly two decades, driven by inflation concerns, heavy government borrowing and increasing questions about the sustainability of U.S. fiscal policy. The 30-year Treasury yield recently climbed above 5.3%, while the 10-year approached the upper end of the range we have been watching. On Wednesday, the Treasury Department responded by announcing that it would at least double its planned buybacks of longer-dated Treasuries, from $2 billion to at least $4 billion per operation beginning September 9. The announcement initially pushed yields lower and helped stocks rebound after three consecutive losing sessions, but the relief proved temporary. Yields moved higher again Thursday, with the 10-year around 4.7%, putting renewed pressure on equities.
That reinforces something I have been emphasizing for months: the direction of interest rates remains one of the biggest risks to this bull market. The 10-year yield continues to move through a broad and volatile range, roughly 4.0% to 4.8%, and the closer we get to the upper end, the more pressure investors should expect on equity valuations. Higher long-term yields raise borrowing costs across the economy and increase the discount rate applied to future corporate earnings, making them particularly important for technology and other long-duration growth stocks.
The Federal Reserve did little this week to remove that risk. Minutes from its July meeting showed that policymakers remain concerned about inflation, with several participants willing to consider additional tightening if price pressures fail to move convincingly toward the Fed's 2% target. That matters because the inflation data themselves have been improving, creating an increasingly delicate balancing act for the Fed. The central bank can afford to remain patient if inflation continues cooling, but renewed energy inflation or persistent tariff-related price pressures could keep rates higher for longer.
Geopolitics are making that job harder. The continuing conflict with Iran and disruption surrounding the Strait of Hormuz have kept energy markets elevated, while President Trump's announcement of a new, aggressive economic campaign against Iran added another layer of uncertainty this week. Oil prices moved higher as hopes for a diplomatic breakthrough faded. Beyond the immediate geopolitical risk, the market implication is straightforward: sustained increases in crude oil and refined-product prices can work their way through transportation, manufacturing and consumer costs, potentially slowing the disinflationary progress the Fed needs to see.
The consumer also moved back into focus after Walmart's earnings. Walmart beat overall revenue and earnings expectations and raised its full-year outlook, but U.S. comparable sales increased only 2.6%, the company's slowest growth in six years. Shares fell roughly 9%, and the weakness spilled into other consumer names. Walmart is important beyond the stock itself because of its enormous footprint across the U.S. economy. With consumers already facing elevated borrowing costs and higher energy prices, any meaningful deterioration in spending deserves attention.
Technology and AI remain another critical part of the equation. The long-term AI investment story remains intact, but expectations have become extremely high. Massive spending on data centers, semiconductors and infrastructure continues to support earnings and economic activity, yet it also requires tremendous amounts of capital at a time when financing costs are rising. In this environment, strong results are increasingly expected rather than rewarded. That makes Nvidia's upcoming earnings an especially important test of whether AI leadership can continue to offset the pressure coming from higher yields.
Despite all of those crosscurrents, I remain in the MARKET BULLISH camp.
Stocks remain near their highs, the VIX around 15 continues to indicate relatively contained fear, corporate earnings remain broadly supportive, and the long-term trend has not broken. I continue to believe the SPY can ultimately rally toward the 760–780 area, while 700–720 remains an important support zone over the next several months.
But this is not a market where investors should confuse bullishness with complacency. The Treasury market is flashing a warning that deserves respect. Fiscal concerns, tariffs, oil prices, Iran, inflation and the possibility that interest rates remain higher for longer could all produce sharper bouts of volatility even if the primary equity trend remains higher.
That makes the next stretch particularly important. Jackson Hole, the Fed's preferred PCE inflation data and Nvidia's earnings will give investors new information about three of the biggest forces driving this market: monetary policy, inflation and AI. If inflation continues cooling, yields stabilize and earnings remain strong, the bull market has room to extend. If oil and yields continue climbing at the same time, however, the pressure on valuations becomes much harder for equities to ignore.
For now, the long-term trend remains intact—but the bond market is telling us not to take it for granted.
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Sector Spotlight
With long-term Treasury yields elevated, oil prices rising, geopolitical uncertainty surrounding Iran and the broader market still trading near record highs, Healthcare is one of the sectors that stands out to me this week.
The Health Care Select Sector SPDR Fund (XLV) provides exposure across pharmaceuticals, biotechnology, healthcare equipment, providers, and life-sciences companies. Its largest holdings include Eli Lilly, Johnson & Johnson, AbbVie, UnitedHealth, and Merck, giving investors exposure to businesses whose underlying demand tends to be less economically sensitive than many areas of the market.
That defensive characteristic becomes more attractive in the environment we discussed above. I remain bullish on the broader market, but with the 10-year Treasury yield pushing toward the upper end of its recent range and the Fed continuing to emphasize inflation risks, investors have reason to look beyond the highest-duration areas of technology. Healthcare offers a different earnings profile and can provide diversification if higher-for-longer interest rates put renewed pressure on growth-stock valuations.
But this is not simply a defensive call.
Healthcare provided one of the biggest positive surprises anywhere in the market this week. On Wednesday, the S&P 500 healthcare sector surged approximately 3.5%—its largest one-day gain since April 2025—and reached a record high, while biotechnology stocks rallied even more sharply.
The catalyst was a potentially important breakthrough from Merck and Moderna. Their personalized mRNA cancer vaccine, intismeran autogene, combined with Merck's Keytruda, met the primary and key secondary endpoints in a Phase 3 melanoma trial. The study included more than 1,100 patients and demonstrated statistically and clinically significant improvements in recurrence-free survival and distant metastasis-free survival compared with Keytruda alone. It represents the first successful Phase 3 trial for an individualized mRNA-based cancer treatment.
That gives Healthcare something particularly valuable in the current market: defensive characteristics combined with genuine innovation and potential earnings catalysts.
While technology continues to dominate the AI narrative, healthcare is reminding investors that transformational innovation is occurring elsewhere as well. Advances in personalized medicine, oncology, biotechnology and mRNA technology could create new growth opportunities independent of whether the next Fed decision is a hike, cut or hold.
With the VIX near 15 and the broader market near its highs, I don't believe investors need to abandon growth or become overly defensive. Instead, this is an environment where diversification and sector selection matter. Healthcare can potentially participate if the bull market continues while offering a fundamentally different source of earnings strength if yields, oil or geopolitics create another bout of volatility.
For those reasons, XLV is my Sector Spotlight this week.
Trade of the Week: Merck (MRK)
Within Healthcare, Merck & Co. (MRK) stands out as my Trade of the Week.
Merck has long been one of the world's largest pharmaceutical companies, with its oncology franchise anchored by Keytruda, one of the most commercially important cancer medicines in the world. This week, however, investors received evidence that Merck's next chapter in oncology could extend beyond Keytruda as a standalone therapy.
Merck and Moderna announced positive Phase 3 results for intismeran autogene, their individualized mRNA cancer vaccine, when used alongside Keytruda in patients with high-risk melanoma. The combination met both its recurrence-free survival and distant metastasis-free survival endpoints, and importantly, researchers reported no new safety concerns.
The market immediately recognized the potential significance. Merck shares jumped sharply following the announcement, while Moderna experienced an extraordinary rally. The broader healthcare sector also moved higher, showing that investors viewed the results as more than an isolated biotech headline.
For Merck specifically, the opportunity is especially interesting because a successful personalized cancer vaccine could potentially strengthen and extend the economic value of the Keytruda franchise. Rather than replacing Merck's existing oncology platform, intismeran is being developed to work alongside it. The companies are also studying the approach in additional cancers, although those indications remain uncertain and will require successful clinical development.
There are still risks. Full Phase 3 data have not yet been presented, regulatory approval is not guaranteed, manufacturing individualized cancer vaccines at scale presents challenges, and the enormous reaction in some mRNA-related stocks shows how quickly expectations can get ahead of fundamentals. Those are reasons to maintain discipline rather than chase momentum blindly.
But the broader setup is compelling.
We have a healthcare sector showing improving relative strength at a time when higher Treasury yields are creating questions around expensive growth stocks. We have a market searching for leadership beyond the largest AI names. And we have Merck coming out of the week with a potentially meaningful new catalyst attached to an already established oncology franchise.
MRK is also a meaningful component of XLV, accounting for roughly 5% of the fund, so the company sits directly at the intersection of this week's sector and individual-stock themes.
I remain in the MARKET BULLISH camp, and I still believe the long-term trend in equities remains intact. But being bullish does not mean every opportunity has to come from technology. In a market facing higher-for-longer rates, elevated oil prices, geopolitical uncertainty and stretched expectations for AI, I want to identify companies where the fundamental story can generate its own catalyst.
This week, Healthcare provides that alternative—and Merck is one of the clearest examples of why.
This week, I am adding Merck & Co. (MRK) 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 82.26% of all trades that I made, with an average profit of 39.75% 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.
For the rest of 2026, the market is entering a more selective and demanding phase. On the surface, major indexes remain resilient, but underneath, investors are navigating a more complicated environment shaped by geopolitical tensions, tariff uncertainty, uneven megacap earnings, sticky inflation expectations, and renewed pressure from interest rates. At the same time, labor market data is beginning to soften at the edges, creating a setup where discipline, timing, and data-driven decision-making are becoming more important than broad market optimism.
This is exactly where YellowTunnel becomes essential.
In a market where leadership is narrowing and volatility can return quickly, investors need more than headlines and guesswork. YellowTunnel’s AI-powered tools are designed to help you cut through the noise, identify high-probability setups, track changing market conditions, and stay aligned with the strongest pockets of opportunity. Whether you are looking for real-time trade ideas, advanced stock and options analysis, predictive market data, or a more disciplined trading process, YellowTunnel gives you the structure and clarity needed to act with confidence.
As conditions tighten heading into Q3, the difference between reacting emotionally and following a proven, data-backed approach can be significant. Our goal is to help you stay prepared, stay selective, and stay focused on the opportunities with the strongest risk-reward potential.
Whether you are focused on short-term trades, portfolio positioning, options strategies, or improving your overall trading mindset, YellowTunnel provides the tools, insights, and guidance to help you navigate this market with greater precision.
Let’s work together to make the rest of 2026 a stronger, smarter, and more disciplined period for your portfolio. As always, successful investing begins with informed decisions, proper risk management, and a clear understanding of your personal goals and risk tolerance before entering any trade.
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!