Tremendous Tesla Trade
Hello 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 price action of the market lately has taken on a tone of “oh no, not again”, it’s all about the meme stocks, Reddit, and Wall Street Bets. A handful of highly shorted and cult-like stocks have sucked the oxygen out of the floor of the NYSE as AMC Entertainment (AMC), GameStop (GME), Bed, Bath & Beyond (BBBY), Koss (KOSS), PetMed Express (PETS) and Blackberry (BB) stole all the thunder from just about any other pertinent news as they all gapped sharply higher on manic buying of shares and call options.
When the feeding fest of Reddit stocks becomes all the short-term rage, it throws a wet blanket on any semblance of market continuity. And this comes on the heels of the wild ride cryptocurrency investors are experiencing this past month. I feel like I’m dealing with a three-ring circus, where the center ring is where the amazing acrobats perform and the other two smaller rings are where the scary and hairy sideshows are going on.
What is evident is that millions of novice trading accounts were opened during the pandemic, and it will take many more washouts to quell this power of social crowd trading that dominates the meme stocks and cryptocurrencies. These are more than short-term fads, and the money that’s being made and lost is huge, but there seems to be no limit of liquidity to slow the pace of trading or massive swings in pricing.
At the same time, all this entertainment trading accounts for very little of the total capital that is actually traded every day, and yet the massive price movements are too big to ignore. The financial media won’t let us alone long enough to steer our focus and trading on more serious companies with real fundamentals. And so it goes.
CURRENT TRADING LANDSCAPE
Many leading stocks that are heavily weighted in the major indexes are consolidating, working off overbought conditions from the most recent move higher by SPY to the high end of the current range. The market and traders have to contend with possible Fed tapering, big spending programs, future tax hikes, and inflation.
The $SPY continues to trade in the range between $410 and $425. The technology stocks and reflationary stocks fluctuated between gains and losses.
The $DXY is reaching oversold levels and due for a rebound. The $TLT continues to trade higher.
Short term the $SPY key support level is at $403-$410. The SPY overhead resistance is at $423. Even if the $SPY is able to trade above the $423 level, the market can only make incremental highs.
I would consider rebalancing the portfolio at this point to be more market-neutral. I expect the second wave of the sell-off to restart as early as this week or next.
Based on our models, the $SPY can pull back 10-15% from the all=time highs in the next 2-6 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 $417 level using SPY and the "SELL" signal is at $424 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $388 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 the 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.
Amid the rally in the blue-chips, Dow and S&P, the market of 2020 that featured the high-beta stocks is groping for a bottom. The wildly popular ARK Funds, overseen by Cathy Woods, raised over $50 billion in assets last year, posting stellar gains of 140% for the calendar 2020 year, led by a phenomenal runup in shares of Tesla Inc. (TSLA).
But like all Roman candles, they eventually fizzle out, at least temporarily, while the fundamentals catch up with the lofty valuations of the underlying stocks. Such is the case with the ARK ETFs. They will once again catch fire but have more wood to chop over the near term before the high-beta hotties put together another major move.
A look at the 3-year chart of the flagship ARK Innovation ETF (ARKK) shows that though the shares are down, but not out. Following a 60% correction off the all-time high, ARKK shares found a high-volume bid at $100, clearing its 50-week moving average, a key long-term technical trend line.