Netflix: Binge On These Profits!
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.
U.S. markets were once again pulled in both directions this week but ultimately look to finish the week with solid gains as all three major U.S. indices turned higher on Thursday and Friday. Growing bond yields, which have ballooned to an over 10-year high, are the main driver of pressure on shares this week while positive corporate earnings are offering support. With the latest push-and-pull in the market elongating the market-wide accepted notion of a fallout from high inflation, investors are again asked to endure the uncertainty and find solace, or profits, where they may.
The current situation applicably reminded me of the latest book featured in my book club: Endurance by Alfred Lansing. Released in 2015, this book tells the true story of explorer Ernest Shackleton and his 1914 expedition as a polar explorer looking to discover Antarctica. As the last uncharted sect of land on earth, Shackleton and his team ventured deep into the south Atlantic ocean, nearly 1,000 miles from the nearest point of civilization, in an attempt to chart this land. What ended up happening became a tremendous story of resilience and perseverance.
When the large vessel was launched in 1912, it was considered one of the strongest wooden ships, if not the strongest wooden ship of the time. Starting in August 1914, the ship was en route to South America as a launching point for the voyage. By December 1914, the ship was leaving its last port of call, an Island off South Georgia (which lies approximately 1,000 km east of the Falkland Islands), with its sights set on Vahsel Bay (near Antarctica). It did not take long for the plan to go array as the ship became icebound by the end of January 1915.
Among increasingly thick ice, the ship, which was immovable, left the sailors no other option but to wait for a crack in the ice. While several cracks appeared and offered hope, not all reached the boat, and often the advancement of the ship following an opening in the ice would not be farther than 200-400 yards. Several plans were discussed, like ramming the boat towards the cracking ice, but were ultimately put aside as the risk of totally wrecking the boat became overwhelming- with no ship, they had no chance of survival. With a ship, there still was a chance.
While icebound, the sailors hunted penguins for food, fought off sea lions, and kept warm as best they could. The current state of the Endurance painted Shackleton as the anti-hero: a lofty goal gone bad, risking the lives of nearly 30 people and resulting in a tremendous money dump. How the journey ended, however, redefined the notion of a hero surviving the greatest odds.
Floating somewhat adrift through the half-cracked ice of "summer" in Antarctica, the ship reached a point of no return in October when it experienced severe cracks. The large vessel was crushed and sank, however, crew members were able to save three of the smaller boats on board and the crew continued to endure. By Spring 1916, the crew had successfully discovered Elephant Island, where they would work from in an attempt to be saved.
Ultimately, Shakleton was able to bridge a connection back to civilization and the crew members were saved. The resilience of the crew was unlike anything recorded before and formed an all-time model of perseverance. They charted Antarctica, battled nearly every single odd, and made it out to the other end to tell the story. Endurance, the ship, was swallowed whole by the ice and reformed a new layer of ice right atop it as if there was never even a ship there. Even though the ship disappeared, the story of the Endurance never will.
We rarely battle unbearable climate conditions or actual sea lions from our trading desks, however, our journeys are never as smooth as planned. Shackleton had no idea the journey he had set forth on, even with the understanding of the gravity of the situation and hardships he had planned for. There is no way he would have known the journey would go as it did. U.S. recession fears have lingered since the start of summer and ballooning concerns over the growing levels of inflation have pretty much been an issue since 2021. When will the "seas' ' of the market settle or when will the recession finally "crack the ice" and swallow our ship whole is anyone's guess. We may not be able to plan for the exact moment everything will go bad, but we can prepare for it. And more so, when it is here, we must endure.
And while I am not suggesting we start hunting for penguins because the price of food, and most things, have spiked, I am suggesting we ready ourselves for these types of worst-case scenarios when it has become apparent we are moving through thick ice. The market continues to find support here and there but ultimately, investors are aware of the coming extreme inflationary pressures - if not full-on recession.
One of the best ways to do this is to never trade alone. Just like those sailors had each other to build a community they could lean on and survive with, traders ought to build their own community and support each other.
That is why I recommend being part of our YellowTunnel trading community, where you can discuss and dissect with me and others. This is exactly what we did in my latest Strategy Roundtable, which we hold weekly on YellowTunnel. 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
This week was marked by several highs and lows as investors were pulled in opposite directions by strong earnings reports and growing bond yields. The Beige Book, also released this week, provided the latest snapshot of economic conditions around the country. Corporate earnings are due to continue next week with several marquee names as well as GDP and PCE reports.
Even though some companies are beginning to see a return to growth in their earnings, U.S. stocks remain under pressure as Treasury yields continue to rise. With all three indices fell on Thursday, they are still set to end the week higher. The Dow is up 3.6%, while the S&P 500 has risen 3.8%. And with a 4.8% gain, the Nasdaq is looking to finish this week stronger than it has in over four weeks.
Key earnings that topped estimates and saw shares spike include Netflix, AT&T, and IBM. With most earnings thus far seeing positive reports, major U.S. indices were able to stop the latest slide in the market after developing a bottom. Not all earnings have been rosy, however, with Tesla, for example, missing targets and seeing shares slide following their latest report.
In addition to the market support received from positive earnings, Wednesday's release of the latest Beige Book offered promising insight into the economy's current state. The Beige Book for this quarter revealed ongoing inflationary pressures in all 12 financial districts. However, on a positive note, there was “modest” growth reported for the U.S. economy as a whole. Several sectors even showed impressive growth that ultimately helped relieve the extreme pressure the market has seen from troubling inflation data.
The recent upswing in bond rates has caused worry and instability among investors. When U.S. Treasury yields suddenly increased, it put extra strain on stocks before they managed to stabilize from this week's stronger-than-anticipated quarterly earnings reports. The 10-year yield rose quickly to 4.228%, the highest level since July 2008, which then led to more stock market volatility.
Given the current market conditions, it's possible that we have seen the bottom develop after breaking below the mid-summer low. As earnings season progresses, most reports are coming in better or as expected which could support markets going into November. Additionally, the upcoming midterm election should provide clarity and remove any lingering political uncertainty - both of which are weighing on the market currently.
As we've seen in the latest earnings and Beige Book data, despite inflation, the economy has grown and continued to spend. Airline earnings, for example, have shown that people are still traveling despite growing ticket prices. We’ve seen similar positive support counter to the growing gas prices as oil and energy have become a prominent point of contention. Considering this, I have recently discerned an ideal symbol and sector to invest my time in the next few weeks.
Before breaking that down, let's review the latest conditions in the market as we wrap up the week and head toward the final trading week of October.
As of Friday, the 5-day chart shows the $SPY was trading 2.87% higher, near $374. The S&P 500 was down up 2% on Friday, with the Nasdaq and Dow trading in a similar fashion. The $VIX hit a high of $31 this week before settling near the $29-$30 range.
The current market direction appears to be moving higher at the moment. The bottom, for now, has been developed with overhead resistance levels in the SPY presently at $380 and then $390. The $SPY support is at $367 and then $357.
As it stands, I believe the market will continue to stabilize over the next few weeks. The current market trend is oversold and could result in a rally within the next few sessions. At the moment, I have advised buying into further sell-offs but not to try and get too far ahead of the market by chasing it downwards.
With the move higher we've seen for major bank shares like Chase and Bank of America post-earnings, as well as giants like Netflix, it is clear there is plenty of resilience in the market. Bond yields breaking annual highs are serious causes of concern that have yet to truly impact markets. The ability for shares to bounce back as positive earnings return spells timely rallies in a bear market. Earnings season has just begun with several key names due to release next week, including Google-parent Alphabet, Microsoft, Boeing, Amazon, Apple, and Intel, just to name a few.
Midterm elections are also right around the corner with early voting starting next week and results due in November. The back-to-back support we will see from earnings data and political clarity should provide shares room for the upside. Specifically, I have identified one sector and symbol I will be partaking in going forward - more on that further below.
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.
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SECTOR SPOTLIGHT
Earnings season has shown us the market is able to endure growing pressure given the right circumstances. Positive reports have subverted the massive weight growing long-term bond yields have put on the market. As yields balloon to multi-year highs, U.S. markets were able to book gains behind strong earnings and encouraging economic reports. Looking at the market landscape in front of us, there are additional potential rallies to take advantage of despite the current bearish nature of the market.
Booking these gains will require astute focus on where the market is leaving room for the upside. One particular sector that fits this bill perfectly is the technology sector. Google, Amazon, and Apple are set to release earnings next week, which if positive, could be a huge boost for the tech sector - if not the entire market. Seeing how the latest earnings have performed, along with what we saw in the Beige Book, I am optimistic we can mirror that performance in the upcoming weeks.
Nasdaq QQQ Invesco Trust Series 1 (QQQ) is the premier ETF measuring the performance of the Nasdaq. This tech-centered ETF features the tech-mammoth listed above and will move as those symbols do. With their earnings set to release next week, QQQ could be on track to book gains. Let's review with my A.I. toolset.
Reviewing the $QQQ Seasonal Chart, we see that there is a growing gap between the annual season price, marked in green, and the current year price, marked in blue. The symbol is showing potential to go higher in the next 20, 40, and 50-day ranges with a decently high forecast percentage. This forecast falls in line with the projections I've made if earnings come in line with expectations, if not better than expectations, which only adds to my confidence in the symbol. See the $QQQ Seasonal Chart below:
Picking a specific symbol within the QQQ to build profits from is another venture I will be looking into in the coming weeks. One symbol, in particular, has caught my eye which is flashing encouraging signals based on technical levels and A.I. forecasts.
TRADE OF THE WEEK
Just this week, Netflix, Inc. (NFLX) offered excellent earnings and has been one of the most surprising stocks to come out of the latest earnings season. I was reviewing market trends and saw that technology showed a lot of potential for growth. Furthermore, even well-known names that have performed poorly in the past are showing signs of improvement. This made Netflix even more alluring to me.
NFLX is currently trading near $289, far below its 52-week high of $700. Just this past week, the symbol booked nearly 24% gains as a robust earnings report propelled shares impressively higher. Looking at the road ahead, tech is due for a bounce back with plenty of support around it. Earnings should set off a good rally for the sector, and this symbol, while adding political clarity usually offers market-wide support. Going from an earnings rally to a midterm election rally, and potentially a holiday rally thereafter, make Netflix's path higher significantly easier.
While this is just an educated assumption based on upcoming events, let's review the A.I. forecast and see if we can find more evidence to support this symbol.
Looking at Netflix's 10-day forecast from the Stock Forecast Toolbox we see several encouraging signs. First of all, the symbol is sporting a model grade "B" placing it in the top 25% of accuracy based on the toolbox's data universe. Although Vector begins in the red, we see a steady climb towards the positive before a resounding move towards gains with vectors scores moving in tandem after a few down days.
Reviewing the $NFLX Seasonal Chart, we see that there is a big gap between the annual season price, marked in green, and the current year price, marked in blue. The symbol has the potential to rise in the next 20, 30, and 40 days, with a fairly high forecast percentage, based on this forecast. Likewise, the forecast is consistent with the one we saw in the Stock Forecast Toolbox, which gives me more confidence in the stock. See $NFLX Seasonal Chart below:
With major-name tech earnings ahead of us, I believe this symbol should find an easy path higher. With the dollar recently hitting a high not seen in decades, continuing global conflict, and lessening uncertainty about Fed action, we can expect a volatile year. However, taking advantage of opportunities presented by this volatility to book profits is still possible and that’s my plan.
This week, I’ll be adding $NFLX 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.
The beauty of our AI-driven system is that we are always equipped to bring new trade ideas to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.
And our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 85.04% of all trades that I made, with an average profit of 37% 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.
Traders looking for a more timely approach to trade should join the YellowTunnel community, where nearly 85% of trades were profitable, and utilize one of our AI trading platforms for no-excuses Trading.
Our AI platform breaks down and analyzes hundreds of proprietary performance indicators to help you get the edge on 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, the proprietary platform, can help you make the last quarter the best of the 2022 trading portfolio.
Have a fantastic week, keep Ukraine in your thoughts and prayers, and let's make some great money together.
One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please click the link below: