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.
A good week for stocks after the first round of third-quarter earnings from some of the biggest banks crossed the tape. That and some early signs that some of the backups at global ports are starting to lift. CPI came in above expectations, PPI inflation data came in below expectations, retail sales came in above expectations and the bond market is maintaining a range, but yields are again pushing higher as of Friday.
The market was bracing for another leg lower and is managing to work through some of the headwinds. Traders believe the Delta variant has peaked and seasonality is now starting to kick in. And yet, we’ve yet to hear from 95% of the S&P 500 companies about current business conditions and forward guidance with widespread labor shortages and stubbornly high energy prices being the major inflationary hurdles for the market.
Sector rotation – and this is exactly where the power of our AI models in our Weekly Power Trader advisory service becomes so valuable in identifying those ETFs and stocks with which to trade.
The $SPY broke out from the range and settled right above the 50-day moving average at $443. The value/reflationary traded higher, up 1.5%, and settled above the 50-day moving average. The technology stocks closed in the green, up 1.80%, and settled below the 50-day moving average.
The $DXY is short-term overbought and started its topping process near $94, long-term overhead resistance from the September 2020 high. The $TLT had a sharp rebound and started the bottoming process, crossed above the 200-day moving average. The fear of runaway inflation has subsided after PPI and CPI numbers.
Volatility settled below at the $16 level. The $SPY short-term support level is at $436, followed by $428 (sustained break below $428 is a low probability event at this point). The SPY overhead resistance is at $443 and then $452. At this point, I believe the recent low at $428 is set.
Since the $TLT is oversold and started the rebound, I expect the technology and the safety stocks ($VNQ, $XLP, $XLU) to outperform value stocks short term.
I would consider rebalancing my portfolio at this time and have a bullish portfolio. The market bottoming process may continue for the next 1-2 weeks. Market corrections are never a one-way trade.
If you are trading options, consider selling premium with December and January expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $438 level using SPY and the "SELL" signal is at $445 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $428 and $455 for the next 2-4 weeks.
NEW EARNINGS POWER TRADER SERVICE
We recently launched our new Earnings 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.
Signals have historically averaged over 86% accuracy in my live trading since inception. Sometimes we hold positions 2-5 days by using options (selling OTM Calls and Puts 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.
MY CRASH-PROOF ALGORITHM HAS HELPED ME BAG 1021-OUT-OF-1184 WINNING TRADES SINCE 1/1/20
My proprietary trading system has a historic 86% win rate… and it has been helping me pick winners for years.
Now, I’m opening this system to a group of traders just like you -- investors who want to forge ahead even though there’s a host of new headwinds up-ahead
Dear Fellow Investor,
If you’re active in the stock market, you know March 16th of last year was a day that will live in infamy…
As news of the outbreak spread throughout the country in February, the stock market began to swing wildly, posting terrifying drops and historic rises along the way.
But by March 16th, it officially crashed.
Headlines captured the reaction from traders across the country - and the world:
Markets Enter the Eye of the Coronavirus Storm
Historic market plunge: Traders describe a day that went from ‘uncertainty to panic’
As a very active trader myself, you might be tempted to think that I would have bought into this panic and adjusted my trading strategy - maybe even abandoning it entirely as many traders have done.
But I didn’t need to. In fact, I was excited.
And now, we have a host of new headwinds: rapid inflation, political wrangling, and deadlocks, China’s fake banking system, supply chain clogs, American debt is skyrocketing, higher tax rates coming soon...
Interest rates are trending higher and the Fed has signaled loudly that it plans to begin cutting back on QE as early as November. The latest economic data supports this notion and with core inflation running hot at an annual pace of 8.6%, there is a historically strong sector that benefits from higher rates and inflation – gold.
What some traders know is that the gold mining stocks almost always outperform physical gold when the yellow metal rallies. The VanEck Gold Miners ETF (GDX) makes for a great trading vehicle to trade the sector. The top 10 holdings account for just over 62% of total assets and being long the ETF removes single stock headline risk that can be prevalent in mining companies.
Our AI-driven Seasonal Chart is providing a very bullish outlook for GDX, with three of four 20, 30, 40, and 50-day probability periods registering “Higher” readings. When we get such a strong set of signals, it fits our trading profile to a tee. I hope all readers of this blog take full advantage of when we pull the trigger to go long this trade.
TRADE OF THE WEEK
The top holding of GDX is Newmont Corp. (NEM). The company is the largest gold mining operator in the U.S. and one of the lowest-cost producers in the world. 2020 revenues were $12.5 billion with gross profit coming in at $6.2 billion. It’s not hard to see why people want to get in the gold mining business when margins are 50%. Fully diluted earnings were up 89% to $3/58 per share, implying a P/E of just 15x.
Gold prices topped out in August 2020 at $2,028 per troy ounce. Today, gold trades at $1,767/oz and has been consolidating a huge run leading up to last year’s peak. Trading laterally for the past six months, gold now looks poised to begin a new leg higher as inflation and higher interest rates act as catalysts.
Shares of NEM are trading at $57 and down from $75 set back in May of this year. Just this past week, the stock put in a key high-volume upside reversal that caught the attention of our AI screens.