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.
Buyers came roaring back into the tech sector this past week, making for a broad-based rally the took the S&P up through 4,000 for the first time. Semiconductors lead the way along with some leading software stocks like Microsoft Inc. (MSFT). The rotation was most welcome in that many of the reflation sectors were overbought and in need of some consolidation.
The market received very bullish reports Thursday and Friday. The ISM Manufacturing Index for March came in at 64.7 (consensus 61.2) and the economy added 916K jobs (consensus 625K) in March as hiring swelled, thanks to vaccine progress, warmer weather, and an end to Covid restrictions in Texas and some other states. The unemployment rate fell to 6.0%.
Futures are indicating a higher opening for Monday. Traders will be closely watching the reaction in the bond market to see if the 10-yr doesn’t spike once again, stoking inflation fears and more chatter of sooner-than-planned Fed tightening. Such strong data coming in front of what should be a very strong earnings season sets off the market rally for further gains.
CURRENT TRADING LANDSCAPE
I have a newfound respect for people working in the service industry. I honestly don’t know how they do it. I am getting my haircut, as the next client comes in, letting my hairstylist know that she has a doctor’s appointment in two hours, for which she cannot be late for. My stylist smiles and says that she remembers.
The woman proceeds to demand that she hurries up, to which the stylist calmly states that she has plenty of time and not to worry. The woman then decides to announce to an entire salon how anyone who gets vaccinated is a moron and people are just dropping like flies from vaccines. She obviously has no medical or pharmaceutical background, but she knows of someone who knows of someone who just dropped dead.
My blood pressure is rising just listening to this woman, as my stylist calming continues to cut my hair. I am finally done and cannot wait to leave the salon. At the realization that she has to endure this woman for another hour, I give my stylist an extra-generous tip and walk out. But you have got to hand it to them. Nail technicians, hairdressers, etc., don’t get paid remotely enough to act as therapists or to deal with this sort of stress. They must have the patience of a kindergarten teacher.
The SPY continued to trade higher and retesting the all-time high. Reflationary stocks underperformed Friday and the growth stocks were able to stage an impressive rally. The DXY is losing its momentum. The TLT continues to rebound.
I would be a buyer using any short-term corrections and use dollar-cost averaging strategy to accumulate positions. If you are trading options consider selling premium with May and June expiration dates.
Based on our models, the market (SPY) will trade in the range between $380 and $420 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 as 2% of the stock price.
Signals have averaged over 75% accuracy in my live trading since inception. Sometimes we hold position 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 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.
The passage of legalization of recreational use of marijuana in New York effective immediately in some parts of the state. Outlined in the new law, individuals are now allowed to possess up to three ounces of cannabis for recreational purposes or 24 grams of concentrated forms of the drug, such as oils.
Pot use is permitted in public wherever smoking tobacco is allowed, though localities and a new state agency could create regulations to more strictly control smoking cannabis in public. Smoking weed, however, is not permitted in schools, workplaces, or inside a car. Good luck with maintaining control in these three areas.
Right, wrong or indifferent, the law is now in effect and will lead to even more states going public with recreational weed as a major source of tax revenue. Traders looking to play the sector from the long side should consider the ETFMG Alternative Harvest ETF (MJ) as a way to own what sector insiders deem the best stocks in the space.
MJ is a fairly concentrated ETF, with the top ten holdings accounting for 59% of total assets. This is a “high” flying sector where balance sheets are leveraged, cash burn is huge and earnings are fleeting. But the perceived potential is there and is why the sector is the focus of so much media “buzz”.
Our AI platform has precise probability data for MJ and it is clearly bullish. Going out to September, our AI-driven Forecast Toolbox predicts shares of MJ trading from their current price of around $23 up to $46, reflecting stronger underlying fundamentals and near-term technical improvement.
That’s a very impressive forecast and one that we’ll consider adding to our daily trade recommendations for Weekly Power Trader subscribers. The rising number of users of cannabis products and the momentum of future legislative deregulation of weed will also play a big part in the upward trend of the sector near-term.
At Weekly Power Trader, we apply our custom proprietary AI algorithms to every trade, giving us a serious edge on how and when to trade stocks and ETFs.
Shares of MJ offer traders a lower-risk method by which to trade a sector that has demonstrated extreme volatility. Trading the ETF removes single stock risk and yet MJ has shown it has strong price action that makes for an exciting trading vehicle.
TRADE OF THE WEEK
When it comes to the favorite cannabis stock within the greater trading community, the number one go-to stock is Tilray Inc. (TLRY).
The company is in the business of producing medical cannabis, at least up to now it is. That could be quickly expanded to serve the recreational market overnight. It’s a global supplier to Argentina, Australia, Canada, Chile, Croatia, Cyprus, Germany, Israel, New Zealand, Portugal, Spain, Africa, Switzerland, the United States, Malta, and the United Kingdom.
After going public in August of 2018 at $17, soaring to $300 before falling back to earth, this one particular stock had developed a loyal following that has been along for the roller coaster ride the whole way. The spike in February occurred with the cannabis sector was targeted by the Reddit board Wall Street Bets.