Vlad's Healthiest Trade
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.
This week, investors received a closer look at inflation levels via the latest consumer price and producer price indices. Also, key Q2 data and the tail end of the current earnings season were released. This comes after last week's monthly employment and GDP reports and another week after the most recent Federal Open Market Committee. While previous to that, we were in a bit of news-lull, things seem to have really picked up these last few weeks. And that's just how it goes sometimes- drought then flood.
Just as market activity picked up, my personal life did too. As it does every year, the beginning of August marks a busy, event-filled week for me. Everything kicks off with my wedding anniversary on the 4th, followed by my son's birthday, and then, one day after that, my wife's birthday. The conglomerate of events usually results in us seeing family and celebrating throughout the week. At times, this can make our week feel over-occupied and stuffed. Especially, as I am always in tune with the market and my AI stock picking program is always running 24/7, alerting me to some great opportunities.
My wife, on the other hand, while enjoying the love and warmth that comes from our milestones, does at times feel shorted as the celebration is never just hers but usually shared. What once was solely her birthday week, now becomes a family-wide event she shares. To make up for this, I usually try to get her at least one remarkably big gift to celebrate all three events. While the gift does alleviate some of the "shared-week" issues, I am certain she would enjoy the week without it and more importantly, she would pick to share her birthday week with these events for the sake of having them. Our wedding and our son provide some of our proudest memories and spark continued joy.
The overwhelmed feeling of multiple events and sharing your birthday is just one side of the coin. Everything good that comes with it is the other. And just as I navigated the busy week and continued to find and cherish the good with my family, I navigated through the busy week the market and found the good there as well.
This is exactly what we did during my latest Strategy Roundtable, which takes place weekly on YellowTunnel. It might be difficult to keep track of everything in the market, especially if you're going through it all alone. 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:
How To Trade a Bear Market Strategy Roundtable
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 to 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
U.S. Markets turned higher to end the week, capping a back and forth week heavily influenced by the CPI and PPI data. Stocks in the United States ended mostly lower on Thursday, suggesting that skyrocketing increases may be slowing down, after reaching a three-month high this week following yet another set of inflation figures. At the midweek point, all three major U.S. indices booked impressive gains, with the Nasdaq touching bull territory. As back-and-forth continues, our view on the market remains firm - this latest boom was simply a rally in a bear market.
Despite the impressive advance to their highest levels since early May, equities slumped into the close bell on Thursday, after the July producer-price index fell 0.5% versus expectations for a 0.2% increase; core PPI data showed a 5.8% increase from the previous year.
This PPI report comes a day after the consumer price index showed that prices were flat in July but increased 8.5% from a year ago. The Federal Reserve is going to take in the inflation figures, as they provide hints about where the economy is at after more than a year of battling with high prices when considering the upcoming policy update. The next Federal Open Market Committee meeting is scheduled for September 20-21. Next week, look out for key retail and housing data to be released.
With the bulk of earnings behind us, we anticipate the dust to settle and the bull rally to come to an end this month. The latest rise in the market is not an indication that the bull market has begun, as I’ve previously stated.
Rather, encouraging earnings and better-than-expected economic reports appear to be propelling the advance, suggesting we’re still in a bear market.
As of Friday, the 5-day chart shows the $SPY was trading 2.27% higher, just over $424. The S&P 500 advanced Friday following this week's inflation reports. Oil sold off while gold traded higher to end the week.
The $DXY marginally rose on Friday, near the $105 level, whereas the $TLT sold off throughout the week and continued but advanced on Friday, finishing near the $115 mark.
The dollar has started its rebound from the recent pullback and supports the notion that the recent rally is only short-term and likely coming to an end.
CPI and PPI data this week was better than expected, causing inflation concerns to slightly cool although still relevant. Even though product CPI was better than expected, services CPI and wage inflation continue to persist.
In my opinion, the market is still overbought. The short-term rally should come to an end this month and the market could resume downward momentum into the September-October time frame.
With revived volatility in the market, I encourage users not to chase the market and sell into the rallies. At this time I have a net bearish portfolio.
I am keeping an eye on QQQ and SPY levels, currently facing long-term resistance at the 200-day moving average and below their 50% retracement level, from the 52-week high to the low and below the previous January downtrend.
The "BUY" signal based on the Aggressive Power Trader Portfolio is at the $406 and then $401 level using SPY and the "SELL" signal is at $420 and then $430.
Consider selling premium if you're trading options. November and December expiration dates are ideal for selling premium.
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 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 the 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 an OTM Put (strike less than 100) with an option BID price close to $0.5.
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SECTOR SPOTLIGHT
Taking into consideration the overbought nature of the market and the current trading landscape, there is one sector that has historically outperformed during these times. The market has been top-building and could be looking at a sell-off to resume sooner than later. With several factors bubbling up, this sector has the potential to make advances in the next few weeks.
The Health Care Select Sector SPDR Fund (XLV) is the premier ETF for U.S.-based healthcare. Covering pharmaceuticals to healthcare equipment, this fund is the oldest in its sector, widely traded, and features/favors mega-caps.
With nearly $40 billion in assets managed, XLV provides encapsulation of the healthcare sector. Healthcare traditionally outperforms in the down market. As we previously stated, we believe this is where the market is headed.
As the emergence of additional COVID strains continues to put medical concerns at the forefront of the trading world, I am monitoring this sector with an added interest in one symbol. The market traditionally favors dividend-paying healthcare stocks and I am seeing one which fits the bill perfectly for our next Power Trading and Markets pick.
TRADE OF THE WEEK
CVS Health Corporation, the American healthcare company overseeing CVS Pharmacy and CVS Caremark, released earnings last week which saw the company raise its full-year forecast and easily top second-quarter estimates.
An 8% increase in sales at physical stores and a reported net income growth caused shares to rise from $95.37 to $101.38 following CVS's Q2 financial release. CVS's strong earnings are just one reason why this symbol should be considered.
Running CVS through my elite A.I. tools I am seeing several signs I like. In just the past couple of days, my Seasonal Chart is showing four “higher” probability readings for the next 30 and 40-day periods. There is a noticeable gap between the annual seasonal price, seen by the green line, as compared to the current price, portrayed via the blue line. CVS Seasonal Chart:
Looking at the 10-day Stock Forecast Toolbox predicted data, we see a similar reading that shows the potential for this symbol to grow. CVS holds a model grade of “A” and shows a strong vector in one direction. The symbol was previously trading between our predicted high and low levels but has just recently begun to trade above our predicted resistance of $104.25. With room for growth, this symbol is trading far below its 52-week high and in a great spot for us to get in on.
Over the last 6 months, CVS is up 1.25% but still off highs, near $109 territory. With the current market conditions looking overbought while maintaining some runaway for additional rallies in this bear market, I am betting on healthcare to catch up and make some waves these next few weeks.
As I've stated, the market usually favors dividend-paying healthcare stocks. Recent history has shown COVID and low PE stocks with healthy dividends perform well. Looking through a long-term historical view, healthcare has outperformed in down markets. After reviewing with our A.I. tools, CVS was a BUY signal on both short-term and long-term models.