Mining For Copper Profits
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.
Some slight profit-taking showed up late in the week following a very powerful move pre-an-post Christmas weekend. Early December was marked in sharp contrast where selling pressure pushed the S&P down by 5% and the Nasdaq by 7% on Omicron fears but was viewed as a buying opportunity that has characterized the entire year. The high level of liquidity and the narrative of “there is no alternative” is keeping an unshakable and steady bid under the market that has defined the primary bull trend.
This year will go down as one of the most difficult times in recent American history for the U.S. and the rest of the world that had to contend with three variants of Covid-19 and all the ways this deadly virus impacted our lives. As of this week, the CDC has shortened the quarantine time to 5 days from 10 days and Dr. Fauci went on record Wednesday during a CNBC interview saying he thinks the Omicron variant will start to burn out by the end of January.
This is the first time where there is a consensus that the pandemic might be coming to the point of minimal risk and a broader return to normalcy for society. This change of tone to one of more optimism is a major shift and very bullish for market sentiment if, in fact, this scenario plays out. Assuming it does, as it did in South Africa, where Omicron burned out in 25 days, then whatever pull back the market provides in early January should be bought.
The Santa Claus rally is defined as the five trading days between Christmas and New Year’s Day – and true to form – investors have been treated to a year-end textbook rally, even if only on light volume. It’s been a wonderful ending to a challenging year and yet, there is a rainbow of getting back to life as we know after the storms of Covid-19 have passed. With a lot of hope and a little luck, the pandemic might be over in a few months. If so, even the Fed’s tapering and rate hikes won’t deter the bulls.
TRADING LANDSCAPE
The rally this week put the market in a short-term overbought condition. Strong upward price moves on holiday-light volume is a textbook set up for a brief pullback sometime in very early January, which is offset by first-of-the-year pension funding. Many times, when there is a robust Santa Claus rally, the first few trading days of January are where stock prices will back and fill. This would fit the historical pattern to a tee next week.
The $SPY continued to trade higher and closed at the all-time high at $477, closed flat. The value/reflationary stocks traded lower but right near their all-time high. The technology closed flat and right below the all-time high.
The $DXY pulled back and closed below $96 above the key breakout level of $94.5. The $TLT pulled back at $148 and right at the 50-days moving average. The $VIX traded lower, back to the 17 levels.
The $SPY short-term support level is at $472, followed by $466. The SPY overhead resistance is at $485. The short-term market is overbought and due for a shallow pullback.
I would consider starting accumulating reflationary/values stocks ($XME, $XLI, $XLF, $XLB, and $XLE). I expect the market to have shallow pullbacks and continue to make new highs.
I would consider rebalancing my portfolio at this time and have an overall bullish portfolio. If you are trading options consider selling premium with February and March expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $472 level using SPY and the "SELL" signal is at $478 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $450 and $490 for the next 2-4 weeks.
NEW EARNINGS POWER TRADER SERVICE
We recently launched our new Earnings 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.
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 86% 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.
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.
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Earnings Season starts January 13th and the first to announce its earnings is JP Morgan.
The last time we traded JPM on November 29th we had a 199% return on risk. Let me repeat that, we had a 199% return!
That's a pretty good return after holding the position for only 6 days!
This is my favorite time of year!
You’re Invited: Click Here
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SECTOR SPOTLIGHT
There is some noticeable sector rotation taking place where traders are positioning their capital in more inflationary-sensitive stocks and ETFs. Bond yields popped higher this week following a $56 billion 7-year Treasury auction that was met with week demand, sending the 10-year T-Note yield up to 1.5%. The selling pressure in the bond market prompted some fresh buying in the commodities space where I want to steer our focus.
To this point, shares of the SPDR S&P Metals & Mining ETF (XME) are poised to start 2022 as one of the sectors that are highly attractive for trading from the long side. The top ten holdings in XME make up just over 46% of total assets, led by rare earth mining company MP Materials Corp. (MP).
From a technical standpoint, XME has been building a base for the past seven months. The 20, 50, and 200-day moving averages are all converging at $43-$44, typically resulting in a powerful upside breakout.
TRADE OF THE WEEK
One of the dominant investment themes in 2021 that is only going to get much louder in 2022 is that of electric vehicles. While Tesla has dominated the EV story for some time, there will be a whole host of new EVs coming to market for delivery in 2022, led by Ford, GM, Volkswagen, Audi, BMW, Mercedes, Lucid, Rivian, and others.
The EV revolution is here and competition is about to heat up in a big way, making the business of picking winners and losers more complicated for traders. However, what every EV has to have to come off the assembly line is copper.
“Copper is a major component in EVs used in electric motors, batteries, inverters, wiring, and in charging stations. A pure electric vehicle can contain more than a mile of copper wiring in its stator windings. ... The demand for copper due to electric vehicles is expected to increase by 1,700 kilotons by 2027.” Source: www.copper.org
This brings me to our trade of the week – Freeport-McMoRan Inc. (FCX). As one of the leading copper producers in the world, Freeport is in an enviable position to enjoy some bullish tailwinds in 2022 and well beyond. Current copper prices are around $4.45 per pound and have been so for about the past six months as auto production has been hampered by the global chip shortage.
As this bottleneck becomes less of an obstacle in the months ahead and infrastructure projects start breaking ground, we should see copper prices start to challenge $5 per pound and push higher. Shares of FCX are already starting to price in this future demand and are emerging from a basing pattern that is looking very bullish.
Applying the Forecast Toolbox, we get a solid Model Grade “C” rating and an upside Predicted Resistance price target of $44.55 for the next ten days. From a short-term trading standpoint, that is a very reliable and compelling setup trade for both stock and options traders, with the stock trading at $41.65.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like a clear and powerful uptrend in stocks like FCX. By being a member of any one of our services, it’s these kinds of opportunities that our proprietary algorithms provide our members to look forward to every day, where they can put their risk capital to work on both long and short positions.
Through our services, we tie our Tradespoon Live Trading Room to manage the parameters of every trade. And we update our closed positions daily. Our AI platform works seamlessly to provide our subscribers with the most robust trading experience available anywhere in the market today.
The beauty of our AI-driven system is that we are always equipped to bring new trades ideas to our members. Trades in best-of-breed stocks and ETFs that are not yet recognized by the larger universe of traders.
We really pride ourselves on this kind of discovery process to bring trades with very high probability risk/reward parameters to members throughout each week. Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
Considering the choppy landscape of late, we’re taking advantage of market dislocation and valuation distortion. We’re striving to help our members ring the register all the time and this is why serious traders don’t trade without checking in with market-proven AI tools.
The consistent performance of our services is just incredible. Our historical stellar performance is made possible by being right on 85.77% of all trades that we made with an average profit of 36.34% 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.
Once you’ve become a member of any of our services, I highly encourage you to view the instructional videos on how to best use your membership and participate in live weekly strategy roundtable workshops that are also archived if they need to be viewed at a later time.
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Go to our website at www.yellowtunnel.com and make one of our services your default trading system where the AI that power my all-world, the proprietary platform, can help you make 2021 the best year on record for your trading portfolio.
Have a wonderful New Year’s Day weekend and let’s create some meaningful wealth together in 2022. I look forward to personally welcoming you aboard our mutual journey to trade our way to growing our net worth to provide for all our needs and items on our bucket lists. Financial freedom is hugely liberating and it’s my ultimate goal to get us there in 2022 and beyond. Be safe and be healthy!