Hi everyone and welcome to the Yellow Tunnel community, a family of trading services dedicated to all classes of traders seeking to elevate their trading skills, market awareness, and trading profits.
Another up-and-down week is in the books. We kicked off the first full trading week of October with impressive gains on Monday, only to see shares turn lower by the week's end as sentiment regarding future Fed action shifted. Along with the handful of Fed officials who spoke this week, offering a glimpse into future Federal Open Market Committee action, key employment data was released on Thursday and Friday which also heavily influenced markets.
As I reviewed the labor data, I was reminded of a recent project I had taken on which not only showed the robust and plentiful nature of our economy but also the inventive ways in which we supply to demand.
Down in Florida, I own an apartment near the southeastern shoreline. The location is great and when I'm not there with my family I like to rent it out to cover a few expenses. Luckily, our location was not impacted by the hurricane and after its passing, I had a tenant lined up to move in. The previous tenant had requested an unfurnished apartment which meant the entire contents of the apartment had to be relocated.
To accommodate, I rented a truck and storage unit and made my way down to Miami. With the help of two movers, I was able to take every piece of furniture, home decor, and the like out of the unit. I returned to Chicago and after some time the tenet had moved out. Then, this week, I had a new tenant ready to move. The only issue? They had requested a fully furnished apartment!
So what could I do other than take a flight right back, rent another truck, hire a few movers and undo the un-furnishing we had just recently done?
And that's exactly what I did.
Five hours and a 26-foot truck later we had finished the job. From the storage unit to the truck to the apartment - disassembling and assembling - myself and the two movers with me were covered in sweat. As we made the move, I felt a certain pride and joy in the physical labor we were doing. It took me back to high school and college where I worked for a furniture moving company doing just that. However, approaching 50, moving furniture now was certainly a different level of labor. And as we wrapped up I also felt a great deal of respect for the movers. Physical labor is no easy task. And unlike most jobs, the more experience you have and the older you get does not necessarily make it easier.
When I returned to Chicago with my priceless sense of accomplishment and returned to my world of finance it did not take long for me to be reminded of the integral part laborers play in our economy. As I reviewed the employment reports, I thought of the movers I had hired to help me. I thought of the employees of the storage unit and the truck rental company. Each of these businesses supplied the exact demand I needed - all with relative ease.
Storage units for personal use like mine have only been around for a few decades. Thinking of the process in which demand just like mine (furnished to unfurnished to furnished) created the need for these locations to pop up throughout the U.S. and even more so for them to reach the efficiency in which they operate created a feeling of pride in our economy. Something we often forget while wrapped up in the current day issues of inflation and Fed rate hikes.
Taking time to appreciate the good is always prudent. Each step of the way, our economy was able to provide me exactly what I needed and therefore, I was able to provide my tenants exactly what they needed. What a wonderful system!
In the spirit of efficient teamwork, I would be remiss to not mention YellowTunnel's weekly Strategy Roundtable webinars. Every week, I, along with the YellowTunnel community, go over the latest market-impacting news and discuss a variety of strategies ranging from financial to psychological in an effort to ease trading and improve portfolio performance.
Trying to keep up with the market by yourself can be overwhelming. That is why I encourage you to join a trading community where you may interact and analyze with others. I recommend checking out our latest Roundtable webinar in its entirety below:
With the unpredictable nature of the market and the uncertainty ahead of us, I can’t emphasize enough how vital it is for our readers and members of the Yellow Tunnel community to keep referring to our Live Trading Room so as to maintain a close tie of how our I and my AI platform is navigating us in and out of select trades. It’s FREE and I highly encourage everyone to sign up for the Live Trading Room and keep checking in throughout the trading day.
Every Monday and Wednesday, I highlight our best strategies and potential trading setups via the DISCORD server. It’s the future of bringing together a trading community’s total services, educational products, live chat venues, support, news, how-to tutorials, webinars, live-trading demonstrations, and tons of market analysis. It is incredibly interactive and full of crucial and timely information. Just go to:
I also want to emphasize to traders how vital a stop-loss discipline is to winning and being successful in an unforgiving market. We employ specific stop-loss instructions with every trade. The buy and sell programs controlled by high-frequency related algorithms can create great profits or cause sudden losses, so it is imperative to maintain an element of controlling risk with each trade.
CURRENT TRADING LANDSCAPE
This week, employment data was in focus as a handful of September labor reports were released. Fed comments and the latest from the Organization of the Petroleum Exporting Countries also supplied market sentiment, which ultimately had shares trading lower. The week concluded with all three major U.S. indices selling off as we gear up for next week's earnings season kickoff.
On Thursday, figures revealed that last week's application for unemployment benefits rose by 29,000 to a five-week high of 219,000 — considerably more than forecasts. This was then followed up by Friday's ADP September reports.
In September, the United States added only 263,000 jobs: the smallest uptick in nearly two years. The small rise in new employment was most likely the consequence of labor shortages and reduced demand for workers as talk of a recession spread. However, employment remains too robust for the Federal Reserve to scale back hikes, which is why it will likely continue raising rates.
The unemployment rate is now back to its pre-pandemic average of 3.5%, having dropped from 3.7%. Also released was hourly wages: in September, employers paid their employees an average of $32.46 per hour, up 10 cents from the previous month's $32.30- slowing pay rate increases from 5.2% to 5%. With this in mind, the Federal Reserve is expected to continue to raise rates until inflation begins to drop and employment balances itself out.
As of Friday, the 5-day chart shows the $SPY was trading 1.13% higher, just under $363 in an attempt to hold on to weekly gains as shares sold off on Friday. The S&P 500 was down over 2% on Friday, with the Nasdaq and Dow trading lower as well.
The dollar saw a pretty mute week, initially lowering only to rise again by week's end. However, Friday saw gains reverse course with the currency on track to book only extremely modest gains. Globally, both Asian and European markets ended the week in the red while one commodity spiked impressively.
Oil shares boomed to end the week following the latest news from OPEC which only added to global pressures. Crude oil prices hit $92, essentially returning to their August highs. The US Oil Fund, USO, moved in a similar fashion as the commodity was pushed higher after OPEC announced its latest initiative to scale back daily supply.
On Wednesday, OPEC announced it would cut its oil production by 2 million barrels per day. The news sent a shock through the market and caused oil rates to spike higher. Although not as high as in mid-summer, oil shares are facing difficulty from both OPEC and the unrest in Ukraine. With energy becoming increasingly scarce, I will use one key ETF to help me make decisions about what trades to make. But before diving into that, we must review all of the latest from the market.
I am keeping an eye on the overhead resistance levels in the SPY, which are presently at $376 and then $390. The $SPY support is at $355 and then $340. I expect the market to continue the current pullback for the next 2-8 weeks. The short-term market is oversold and can stage a multiple sessions rally. Looking at these levels, I would be a seller into any further rallies and encourage subscribers not to chase the market at these levels.
At this point, I believe the market has started its latest bottoming process. The market was oversold at the start of October, and while it may rise for a few weeks, we're also considering the potential of retesting previous lows. CPI report and earnings next week will be the primary directors of market movement and depending on results can send shares in either direction.
As we saw just, rallies are still very possible – having recently repeated the end-of-July/August rally to end September. Looking at the above levels, I believe the easiest path forward is for shares to trade higher and I will be buying on these weaknesses going forward.
While the rally was primarily caused by optimistic sentiment and a few not-as-bad-as-expected reports, the upcoming earnings season offers us a similar opportunity to capitalize on any rallies following the ongoing dip. Similarly, midterm elections traditionally offer clarity and therefore support in the market and we are fastly approaching them. Core CPI and FOMC minutes headline next week’s economic releases, as well as retail and PPI data. Earnings season will officially kick off next week with major banks releasing Q3 data.
NEW EARNINGS POWER TRADER SERVICE
I recently launched our new Earnings Power Trader service, which I am 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.
This new service is special because 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. Click here to learn more.
Signals have historically averaged over 85% accuracy in my live trading since inception. Sometimes I hold positions for 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 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 Earnings 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 entered 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 the stock price. I target 75% accuracy using these signals.
A 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 an OTM Put (strike less than 100) with an option BID price close to $0.5.
Earnings Season is here and JP Morgan (JPM) will announce its earnings this Thursday.
The last time we traded JPM during Earnings Season we had a 62% return on risk.
Let me repeat that, we had a 62% return!
That's a pretty good return after holding the position for only 1 day!
Be prepared: JP Morgan Chase & Co (JPM) is scheduled to announce its earnings on October 13th.
This is my favorite time of year!
(A portion of Yellow Tunnel sales will go to directly help the Ukrainian people)
The market has started the bottoming process and has become oversold, presenting a great opportunity for a multi-day rally. In terms of investing, I'll be interested in a particular sector, as determined by my most recent market news and previous trends. As oil prices have rapidly fluctuated throughout the summer, I have been paying close attention to the commodity and I believe there is currently an opportunity for those interested in investing.
The Energy Select Sector SPDR Fund (XLE) is my go-to for the energy sector. The fund, with assets of close to $40 billion, provides exposure to the oil, gas, fuel, and energy equipment and services industries. The fund is the flagship energy ETF within the S&P, and I trust it to represent the sector appropriately.
Following OPEC's announcement, prices are set to go up. Inflation fears remain prominent and I believe there is more room for the upside than the downside when it comes to energy. Trading below its 52-week high of $93.31, the current price of XLE at $82.94 offers a great opportunity, one I would like to invest in so long as my A.I. data agrees. Let’s check:
The $XLE Seasonal Chart above shows that the annual season price, indicated in green, has recently fallen below the current year price, marked in blue. The symbol's trend is demonstrating the potential to rise in all four seasonal chart time ranges, which is a positive sign. Not only is the symbol projected higher for the next 20, 30, 40, and 50-day periods, but it is also forecasting that with an impressive and escalating accuracy score.
With this in mind, I'd like to take it a step further and recommend something that I believe is an incredible opportunity in the energy industry with this industry-leading corporation.
TRADE OF THE WEEK
ExxonMobil Corporation (XOM) is a leader in the oil field and, as of lately, has been showing some great signals for the upcoming quarter.
XOM is the largest direct descendant of the Standard Oil empire and, just like the rest of the energy sector, saw a fairly volatile 2022. Since January, when the stock was trading as low as $63, it has risen steadily with several pullbacks after establishing new 52-week highs. Looking at the latest trends, I believe we might have a similar opportunity on our hands.
As of Friday, XOM traded right above $102 and just below the 52-week high of $105. Considering the latest from OPEC and the continued pressure from inflation, I believe this symbol has a shot to top its annual high and my A.I. arsenal is in agreement.
The Stock Forecast Toolbox is signaling an early trend upward in its 10-day forecast for XOM. The symbol has shown the ability to create new highs as recently as June, and following the August/September energy selloff, XOM is showing that it has some room to run higher.
Although the stock is nearing its 52-week high, there is evidence suggesting that more gains are possible. The oversold nature of the market with the additional pressure of OPEC action makes this symbol path of least resistance up.
This week, I’ll be adding XOM to my portfolio.
Discovering this trade is precisely where AI technology comes in handy. We connect our Live Trading Room to YellowTunnel in an effort to assist you in managing the current inflationary trend. We keep our positions updated on a regular basis and our AI system seamlessly integrates with our platform to give our customers the most comprehensive trading experience available today.