Which stocks to buy during inflation
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.
Recent data and developments have traders wondering whether to hit the gas or hit the brakes in their portfolios. Clearly, the delta variant is wreaking havoc on sentiment, not knowing the breadth of the impact on business conditions and the timeframe by which this phase of COVID-19 will pass.
This week showed considerably slower job growth from the ADP report where 330K private-sector jobs were created versus 650K consensus while the ISM Non-Manufacturing Index for July came in at 64.1 making for the highest reading on record and the fourteenth month of expansion for the services industry which accounts for two-thirds of domestic GDP growth.
Adding to the conundrum is the collapse of bond yields on the long end of the yield curve with the benchmark 10-yr Treasury Note paying 1.18%, a level not seen since this past February. This counterintuitive move comes at a time when the CRB Index that measures 19 of the most widely traded commodities, is trading within 2% of its 5-year high, and the CPI index that measures inflation is running at a 5.4% annual rate.
So, it’s not hard to understand why the market is finding it hard to steer a straight path higher when the data is full of cross-currents, China is cracking down on its tech industry and global supply chains are facing more interruptions from COVID-19. What this simply means is that stock picking is at a premium and where the power of AI models in our Weekly Power Trader advisory service becomes so valuable.
TRADING LANDSCAPE
The $SPY continued to trade in the small range. The most important catalyst to consider is July unemployment numbers.
The $DXY has broken above $90.60 resistance and has confirmed its breakout. The next level of resistance is at $93. The $TLT continued to trade higher and has more room for the upside (lower yield).
Based on the steep correction in the reflationary stocks, strong dollar, and overbought technology stocks, the market will continue the correction in August. The $SPY short-term support level is at $435, followed by $430. The SPY overhead resistance is at $445. I expect the next stage of correction to resume this week or next.
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 5-10% from the all-time highs in the next 2-4 weeks. If you are trading options consider selling premium with October and November expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $434 level using SPY and "SELL" signal is at $440 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $400 and $440 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.
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 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.
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To My Fearful Traders,
There are certain times of the year when stock prices are going to go up.
It’s as predictable as the changing of the seasons.
But just because you know that, doesn’t mean you know which stocks of the thousands on Wall Street will actually go up.
I can narrow the field for you.
In fact, I can send you an email that lays it all out for you: stock ticker symbols, entry/exit points, and more.
It’s the entire plan, handed to you.
And it works - here is an example of some of my top trades, I made these trades recently using the same method I’m about to show you:
There have been huge gains and of course some losses, but the gains have consistently and massively exceeded occasional losses.
Not only can I show you how to predict these gains and how to find them, but I also have a complete strategy for multiplying gains.
I lay it all out for you in plain English. No tricks, no catch. Just click HERE to see what I’m talking about.
Regards,
Vlad Karpel
Chief Investment Officer/Founder
Click HERE to learn more about this “predictable” time of year.
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SECTOR SPOTLIGHT
My AI models are flashing some buy signals in the metals and mining sector where the ETFs and stocks have been consolidating for weeks now. As bond yields fell, so also did the stock prices of most commodity stocks that are in basic materials. It’s a natural rotation that takes place, but once it runs its course, presents an attractive buying opportunity if, in fact, the global economic recovery is in place. And I believe it is.
From my AI models, the benchmark 10-yr Treasury hit a significant pivot point from which yields should start to turn higher. And true to form, we saw this reversal taking shape late this week. The 10-yr retested the 1.13% level for the second time within the past two weeks and put in a textbook double-bottom pattern from which to push off of.
In doing so, the corresponding trade would be to go long deep cyclical that would include the SPDR Metals & Mining ETF (XME) as a go-to trade to play off of this decisive inflection point of a new direction. Top holdings include the following stocks:
What’s even more compelling is how our AI-driven platform has confirmed the timeliness of putting XME on our watch list for actionable trading strategies that we are apt to put out in the week ahead. The Seasonal Chart is flashing a “Higher” probability reading for the next 20, 30, 40, and 50-day periods, implying a very strong risk/reward ratio for trading XME from the long side in the days and weeks ahead.
At Weekly Power Trader, (or Dynamic 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
Freeport-McMoRan Inc. (FCX) is a leader in the mining mineral properties in North America, South America, and Indonesia. The company primarily explores for copper but also has mining operations in gold, other metals, and some oil and gas properties. Copper is its biggest source of revenue by far, with the company setting a goal of capturing 50% of the global market by 2025.
The future of copper is nothing short of huge. Copper is vital to the growth of smart homes, smart cities, electric vehicles, renewable energy, and advanced manufacturing on a global scale.
The company is forecast to see revenues soar by 61% this year, to $23 bln and earnings to come in around $3.00 per share and grow by 20% in 2022 to $3.60. With the passage of the infrastructure bill on deck, these numbers will only be adjusted higher in my view, and taking advantage of the pullback in the shares looks timely.
When we input FCX into the Forecast Toolbox, we get a Model Grade “C” rating, which is reflective of the metals and mining sector is out of favor of late, but we also see that the 6-month price target of $53.36 is 48% higher than where the stock currently trades, making this addition to our portfolio a compelling buy.
From the YTD chart below, one can see that $35 is a level that has served as a dual support/resistance line. This latest pullback is on light volume and sets up the stock well to push back up towards its 2021 high of $46 and try higher in the months ahead.
With copper prices holding up at their highs in anticipation of increased demand, the FCX trade looks very attractive. The current price of copper is roughly $4.35/pound which is just under the all-time high of $4.58/pound set back in 2011.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like a clear and newfound uptrend in stocks like Freeport-McMoRan. By being a member of any one of our services, it’s these kinds of opportunities that our proprietary algorithms provide our members to look forward to every day, where they can put their risk capital to work on both long and short positions.
Through 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.
Considering the choppy landscape of late, we’re taking advantage of market dislocation and valuation distortion. We’re striving to help our members ring the register all the time and this is why serious traders don’t trade without market-proven AI tools.
The consistent performance of our services is just incredible. Our historical stellar performance is made possible by being right on 86.54% of all trades that we made with an average profit of 36.04% per trade on our collective trade recommendations. 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 historically over 86% of all trades are profitable to 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 and analyzes thousands of proprietary performance indicators to help identify the next big trades to supercharge your portfolio!
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, proprietary platform, can help you make 2021 the best year on record for your trading portfolio.