Stock Ready To Take Off
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.
The market woke up on the wrong side of the bed Friday after the latest inflation and consumer sentiment data greatly disappointed Wall Street. The CPI for May came in at 1.0%, above forecasts of 0.7% and Core CPI ex-food and energy registered a gain of 0.6% was above the 0.5% estimate. Prices were broadly higher across several parts of the economy, new and used cars, housing and especially food prices saw its largest 12-month increase going back to 1981. Add in gasoline now at $5/gallon on a national average and the message is clear – the Fed has a lot of work to do.
The late selloff Thursday leading into the release of the data Friday smacks of the numbers getting leaked, which tends to be more commonplace these days. Regardless, the key takeaway is that the market had priced in two more half-point rate hikes for June and July, but now it is presumed there will be another rate hike at the September meeting, with November and December meetings also a possibility.
Inflation and a strong dollar will likely result in a swath of lower earnings revisions that will further contract stock multiples on growth stocks with earnings. For stocks with high price-to-sales multiples with no earnings, there remains a significant downside risk. At this juncture, traders should be combing the market for deep value stocks with low P/E multiples, such as what I highlight further in today’s column below.
To this point, I can’t emphasize how vital it is for blog 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 AI platform is navigating us in and out of select trades. It’s FREE and I want highly encourage everyone to sign up to the Live Trading Room and keep checking in throughout the trading day.
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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 specified 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
The narrative has taken a sudden turn from a soft landing later this year to that of “fire and ice” where red-hot inflation leads to a recession. Fear is greater than greed and stocks fall faster than they rise - they take the stairway up and the elevator down. A retest of the March lows for the major averages looks imminent.
As of mid-Friday, the $SPY is trading down 2.6% to $390, right below the short-term support resistance - $399. The value/reflationary ($VTV) trades down 2.1%, at $137, below the 50 DMA. The technology sector ($QQQ) trades lower by 3%, at $290, below the $50 MA.
The $DXY trades higher, near the $104.2 level, trading below the December 2016 high. The TLT trades lower by 1.09%, at $113, and facing the key long-term support. The ten-year yield is higher at 3.18%. The $VIX trades higher, near the 29 level.
The $SPY short-term support level is at $396 has been violated and is followed by $380 as the next key level. The SPY overhead resistance is at $420 and then $430.
I would be a seller into the rally and have a NEUTRAL portfolio at this time. Short-term the market is oversold, undergoing the bottoming process, and can continue the rebound lasting multiple weeks.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at the $384 level using SPY and the "SELL" signal is at $410 for short-term traders.
If you are trading options consider selling premium with September and October expiration dates.
Based on our models, the market (SPY) will trade in the range between $350 and $440 for the next 2-8 weeks.
NEW PROFIT ACCELERATOR TRADER SERVICE
We recently launched our new Profit Accelerator 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.
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.
Signals have historically averaged over 85% accuracy in my live trading since inception. Sometimes we hold position 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.