Bank On This Trade
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 abrupt change in Fed policy that triggered the market correction got to a point where valuations in the best-of-breed blue-chip stock traded down to levels that brought buyers off the sidelines. Many leading stocks of the past two years declined to their respective 200 DMA lines and either briefly breached them or held these key technical support levels. It’s been a true test of establishing future market leadership.
There have been some very high-profile earnings-related blowups that have also tested the mettle of the market’s resolve. Netflix Inc. (NFLX), PayPal Inc. (PYPL), Intel Corp. (INTC) and Meta Platforms Inc. (FB) caused a lot of tension but was offset by impressive earnings from Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Microsoft Corp. (MSFT), Alphabet Inc. (GOOG), MasterCard Inc. (MA), American Express Co. (AXP) and others.
The Fed laid out their fiscal policy roadmap that didn’t surprise markets from the narrative delivered back in December, stating QE would end in March, followed by the likelihood of three quarter-point rate hikes and no mention of reducing the balance sheet. It came off as a more-measured approach, but that could change with Friday’s upside surprise in the employment data, crude oil topping $92/bbl and the upcoming CPI and PPI readings due out Feb. 10 and Feb. 15, where inflationary pressures probably were more elevated in January.
Ukraine remains an outside threat to market sentiment, and with the market now extended over the very short-term, some cautionary back-and-filling into the inflation data would not be unexpected and actually be constructive for market technicals. Other than the Russell 2000, the major indexes recovered their 200 DMA lines that will likely be tested once more. Any relief from the Ukraine standoff and further positive data on the Omicron variant stand to provide follow-on buying in stocks, but not without a healthy dose of volatility to keep investors guessing.
TRADING LANDSCAPE
Traders have to be super sensitive to the sudden shifts in sentiment that trigger buy/sell programs that can add or subtract 1%-3% in the averages in a matter of minutes. High-frequency trading firms dominate the business of how the market trades. Part of successfully navigating a market with wild swings is to respect the technical integrity of each trade and not get caught up in or tempted by headline-driven trading.
The $SPY sold off Thursday, down 2.4% and closed at the 50% retracement from 2022 low to high. Friday’s session is seeing the benchmark index trade about 1.0% higher. The value/reflationary trades are just above the 50 DMA. The technology sector ($QQQ) trades around $359 at the 50% retracement from the last two weeks low to high.
The $DXY continued to reverse its recent gains, down another 0.8% and below the 50 DMA. The $TLT traded sideways, down 0.7%, and sits below the 200 DMA. The $VIX has closed out the week between 23-24.
The $SPY short-term support level is at $445 (key long-term support) followed by $435 the SPY overhead resistance is at $460.
The $QQQ's started the second leg down, which could continue for the next 1-2 weeks. I do expect volatility to persist, but the pattern of higher lows and higher highs should continue short term. I would be a seller of the high beta stocks into the rallies and continue rotating the portfolio into the value stocks ($XLE, $XLI, $XME and $XLF).
I would consider rebalancing portfolio at this time and have an overall market BULLISH portfolio. I do expect the $SPY's rebound to continue for the next 1-2 months. I do not expect the $SPY to post a new all-time high in the first half of this year.
Short-term, the market is oversold, and after the report from AMZN, $QQQ can potentially retest the recent highs.
"BUY" signal based on the Aggressive Power Trader Portfolio is at $438 level using SPY and the "SELL" signal is at $450 for short-term traders.
If you are trading options, consider selling premium with April and May expiration dates.
Based on our models, the market (SPY) will trade in the range between $430 and $470 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 85% accuracy in my live trading since inception. Sometimes we 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 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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Certain Select Stocks on Fire!
Instead of telling you what to do (after I trade)…
Instead of telling you what to do (after I trade)… I will show you what I do (in real-time).
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.
As the market changes with the ending of the pandemic, the beginning of inflation, global uncertainty…you can see my new trading updates LIVE so that you can Do-As-I-Do and even copy my trading strategy.
From the beginning of the pandemic, January 1, 2020, to February 4, 2022, my total return on risk is an astounding 414%. I’ve made 1314 trades since then and 85% of them have made money. **
CLICK HERE BEFORE PRICES GO UP!
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SECTOR SPOTLIGHT
The robust jobs data released Friday weighed heavily on the bond market, sending yields higher along with bank stocks that feed off of higher rates for future profits from lending services. The 2-year Treasury Note yield jumped to 1.32% as of Friday, which is a key rate by which many types of mortgages, loans and lines of credit trade-off of.