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.
Some targeted selling on the earnings news took hold of the Friday session following a big week of high-profile earnings reports from the mega tech companies that dominate the index weightings. Among the FAANG and Microsoft releases, Netflix, Apple, and Microsoft all traded lower while Facebook, Alphabet, and Amazon all traded higher, making for a mixed bag that triggered some broader selling in the tech sector.
The tale of the tape simply confirms the pre-earnings season run-up for many market-leading stocks, and the resultant pullback should be of no surprise. Most of the 11 market sectors experienced similar to buy the rumor, sell the news price action that could make for a choppy month of May that I make note of in my technical take below.
As vulnerable as the market is for a garden variety correction of 10%, the overarching set of longer-term tailwinds remain very much intact. The Fed’s dovish fiscal policy, massive Congressional stimulus, bullish data on U.S. vaccinations, tame interest rates, and solid forward guidance by the majority of S&P 500 companies will set up the market for higher highs once a period of consolidation has run its course.
The $SPY continues to trade in the range between $410 and $420. The energy, the industrials, and the financial stocks (reflationary trade) led the market. The $DXY is reaching oversold levels and started the bottoming process. The $TLT is trading in the uptrend. A short-term key support level is at $410 and the market can potentially start the correction in the next two weeks.
CURRENT TRADING LANDSCAPE
Most traders are asking themselves “what’s the next big thing” to propel the markets higher. And since they aren’t seeing something bullish the market doesn’t already know, it triggers knee-jerk selling, even in stocks where the quarterly results would seem to support higher prices. It’s just temptation to raise cash and sell extended winners into strength and look for lower entry points to buy back into the favorite names.
I would consider raising cash at this point as the best part of the recent rally is behind us. Based on our models, the $SPY can pull back 10-15% 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 $416 level using SPY and "SELL" signal is at $422 for short term traders. Based on our models, the market (SPY) will trade in the range between $388 and $425 for the next 6 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 order. 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 at 2% of the stock price.
Signals have averaged over 86% accuracy in my live trading since inception. Sometimes we hold positions 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.