Vlad’s Fat Cat Trade
Hi everyone and welcome to the Yellow Tunnel community, an aggressive short-term trading service dedicated to all classes of traders seeking to elevate their trading skills, market awareness, and trading profits.
The final touches are being put on a $1 trillion infrastructure deal, and the Fed continues to send the market the message of “I got your back” and big-cap tech stocks stole the show during the month of June to take the major indexes to new all-time highs. There is a certain feeling that FAANG plus MSFT, ADBE, and NVDA are a refuge for institutional money looking desperately to remain fully invested in what has been the torch-bearing stocks of the primary bull trend.
Regardless of the changing narrative from deflation to inflation, some things just aren’t changing- at least not yet. The secular growth story of technology is well-entrenched and remains the sector of choice even as other sectors are sporting more attractive valuations as the economy comes back to life. The old saying of “you go with what you know” still rules.
CURRENT TRADING LANDSCAPE
The $SPY continues to make incremental highs. All sectors rebounded from oversold levels set last Friday. The technology stocks closed at a new all-time high. The reflationary stocks (energy, banks, materials, commodities, industrials) rebounded from the oversold levels.
The $DXY has broken above $90.60 resistance and has confirmed its breakout. The next level of resistance at $93. The $TLT mirrored the price action in the U.S. Dollar and the next level of overhead resistance is at $148.
The $SPY short-term support level is at $414, followed by $404. The SPY overhead resistance is at $430. Even if the $SPY is able to trade above the $425 level, the market can only make incremental highs.
The $SPY continues to follow the path of least resistance. The technology stocks have taken a well-deserved pause late in the week. The reflationary stocks (energy, banks, materials, commodities, industrials) are ticking back higher, but continue to trade below their 50-day moving averages.
The question on everyone's mind, is this the beginning of the next leg up in the market?
Based on the steep correction in the reflationary stocks, strong dollar, and overbought technology stocks, the market is due for a correction in July. The $SPY short-term support level is at $425, followed by $420. The SPY overhead resistance is at $430. Even if the $SPY is able to trade above the $430 level, the market can only make incremental highs.
I would consider rebalancing the portfolio at this point to be more market-neutral. The second wave of the sell will continue for the next 2-4 weeks. Market corrections are never a one-way trade.
Based on our models, the $SPY can pull back 10-15% from the all-time highs in the next 2-4 weeks. If you are trading options, consider selling premium with September and October expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $425 level using SPY and "SELL" signal is at $428 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $385 and $425 for the next 2-4 weeks.
NEW WEEKLY DYNAMIC POWER TRADER SERVICE
We recently launched our new Dynamic Power Trader service that we at Yellow Tunnel are very excited about. Each week, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
What makes this new service so special is that it offers real-time alerts via SMS and access to Vlad's live positions and orders. When I put together this system, I wanted to be in the fight with other investors. That’s why I don’t play on your emotions to sell newsletters - I put my money where my mouth is.
Every trade recommendation that I make using this system – comes straight from the list of trade recommendations I use myself.
Not only that but every trade I make is logged in detail for you to review at any time. You can see my entire trading history, updated LIVE so that you can see, learn from, and even copy my trading strategy.
Our Weekly Power Trader service continues to power up great trading profits. Each week on Sunday, our expert traders use our AI Tools to provide the Top Bullish and Bearish Stocks, each with an Entry Price, Target Profit, and Stop Loss.
Also, note that the Weekly Power Trader signals are meant to last for 5-10 days as long as the vector confirms the same direction as the original pick, for stocks we use a target gain of 2% and stop as 2% of the stock price.
Signals have averaged over 86% accuracy in my live trading since inception. Sometimes we hold positions for 2-5 days by using options (selling OTM BULLISH PUT spread) and targeting 1% target gain and 1% stop loss using stock price. The green color should be interpreted as a bullish signal and red color as a bearish signal.
How To Use Our Signals
Once you become a member, I encourage you to review our Live Trading Room recordings to see how I trade Aggressive Power Trader signals in my account. A snapshot of how we produce our Live Trading Room Sessions shows how we pack in a lot of information that can be accessed from whatever device you’re driving.
As a reminder, consider buying near the "BUY" level with a "10 days prediction" higher than the close price. In our live trading room, I usually hold a position for 1-2 days.
I allocate less than 5% of my portfolio if the position is being held overnight. On average, less than 1% of the portfolio should be at risk, if you own a position for less than one day.
I enter a position at the predicted LOW (BUY) price or yesterday's close price. My stop loss is 1% and my target gain is 1% of stock price. I target 75% accuracy using these signals.
Few subscribers asked about Options trading using the signals provided. Please review live trading room recordings. I often sell OTM credit put spread using weekly options and collect 0.5% using stock price. For example, if the stock is trading at $100, I would sell OTM put (strike less than 100) with option BID price close to $0.5.
SECTOR SPOTLIGHT
In light of the June rally for technology, traders are starting to refocus their attention on value and cyclical stocks that are considerably more leverage to recovery than growth stocks. Most of all, when manufacturing picks up speed, history is indeed on the side of being long industrial stocks as they tend to make big moves within shorter time frames due to huge spikes in sales and earnings such as the present.
Coming up on the second-quarter earnings season, it stands to reason traders will anticipate blowout earnings from the leading industrial companies and begin to position their portfolios to reflect good exposure to this sector. Just looking at the Industrial Select Sector SPDR Fund (XLI) as a proxy for the sector, we can see why some may simply want to trade this ETF instead of trading individual stocks.
The top ten holdings make up just over 41% of total assets, with several front-line name stocks having strong upside potential when the market turns in their favor. And with the tech sector technically overbought, there is a rising probability the industrials will catch a major dose of confidence when companies report Q2 results.
This line of thinking coincides with our AI-driven platform of tools that are flashing a “Higher” probability reading for XLI over the next 20 and 30-day periods. For traders, this is a beautiful setup, legging into a sector that is likely to report a parade of companies that beat sales/earnings estimates and raise guidance.
The recent pullback in the XLI left a lot of traders in limbo as both the 20 and 50-day moving averages we violated and short-term trust was lost. But lately, XLI is looking to re-take these two short-term trendlines and re-establish the uptrend that had been so prominent during the first half of 2021.
At Weekly Power Trader, we apply our custom proprietary AI algorithms to all market trends and scenarios where even when it appears the conventional thinking is in the right position, it can turn adversely against the herd mentality in a hurry, just as has happened recently.
TRADE OF THE WEEK
As our artificial intelligence is starting to ping loudly in the direction of the industrial sector, we are zeroing in on the most-heavy metal stock that carries the likelihood of putting together the largest gain of any stock in the sector. That would be Caterpillar Inc. (CAT), a company leveraged to the housing market, the commercial real estate market, and arguably the number one beneficiary of an infrastructure deal.
2021 revenues for CAT are forecast to rise by 18% to $49 billion with earnings set to soar by 51% to $10 per share. These estimates could prove to be conservative to where the stock could ascend past its previous high of $246.69 from its current price of $216 as more traders warm back up to this sector leader.
Our AI Forecast Toolbox gives CAT a “B” Model Grade rating with a two to three-week potential price target of $230.48. That’s an impressive move for CAT and makes good sense the stock would start to bid higher in front of earnings due out July 29.
This is where our AI models do the heavy lifting for our trading community. Our proprietary AI tools crunch the data needed to make that distinction, creating a strong read as to whether to put this trade on or not.
There is excellent profit potential for this trade in that CAT could be a great trade as our AI indicators are now indicating higher prices ahead.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like NEM. By being a member of Weekly Power Trader, it’s these kinds of opportunities that our tailor algorithms provide our members to look forward to every day they put their risk capital to work on both long and short positions.
Our Weekly Power Trader advisory service takes positions in only blue-chip stocks and ETFs that are green-lighted by my proprietary AI tools, and when confirmed, are added to the portfolio with my investment capital invested as well.
With our services, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. The two platforms work seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.
The beauty of our AI-driven system is that we are always equipped to bring new trades to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.
We really pride ourselves on this kind of discovery process, to bring trades with very high probability risk/reward parameters to members throughout each week. Our track record speaks for itself from a standpoint of a Winning Trades Percentage, Average Return Per Trade and Net Gain.
Our AI platform delivered nothing but profits during May for Weekly Power Trader members. Considering the mid-month market pull-back this short-term performance is what makes our hard work so gratifying. We’re ringing the register all the time and that is why serious traders don’t trade without market-proven AI tools.
The consistent performance of our Weekly Power Trader service is just incredible. Our 2021 YTD stellar performance is made possible by being right on 86.47% of all trades with an average profit of 35.94% per trade. To my knowledge, this trading performance is one-of-a-kind that stands alone in the marketplace for superior trading advice where our numbers and results speak for themselves.
Once you’ve become a member of any of our services, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived in the event that they need to be viewed at a later time.
Traders seeking the most-timely directional trading strategies where over 86% of all trades are profitable should take action and come alongside the Yellow Tunnel community and make one of our services your go-to AI trading platform for no-excuses performance.
Our AI platform crunches all the data, generating a constant stream of trades with the highest probability of generating stock and option selections with a high win rate. It can be suited for the beginning, retail, and professional traders anywhere in the marketplace today.
Go to our website at www.yellowtunnel.com and make one of our services your default trading system where the AI that powers my all-world, always thinking platform and make 2021 the best year on record for your trading portfolio.