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.
In this situation, traders seek to capitalize on the surge in rates by trading financials from the long side. In this case, the Financial Select Sector SPDR ETF (XLF). The top ten holdings make up almost 55% of total assets and are stacked with the premier companies in the industry and the ones that the market embraces most.
Looking at the one-chart chart below, shares of XLF are tacking higher, now above its 20, 50 and 200 DMA with the recent high in the sight of being taken out. As long as bond yields hold at their current levels are pushed higher, XLF will very likely take out the high and trade-up towards $44 over the near term.
We do our best technical work when we apply our proprietary AI models to each and every trade. For XLF, our AI-driven Seasonal Chart shows a very bullish “Higher” reading for the next 20 and 40-day periods. Hence, we can trade with confidence that the strategies we put on for XLF have a high probability of working in our favor.
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 and ETFs like XLF. 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.
TRADE OF THE WEEK
For all the top components that make up XLF, the one stock that is showing the most impressive price action is Wells Fargo & Co. (WFC). The company is in the midst of a major makeover under the stewardship of CEO Charles Scharf, the former CEO of Visa and Bank of New York. He took the helm at Wells Fargo following the widespread scandals in the company of the unauthorized selling of products to customers.
Mr. Scharf has done a masterful job of realigning the business and restoring the brand to its former well-respected self. There is still much work to do, but he is clearly getting the job done. The latest set of quarterly results is evidence of strong momentum across all their lines of business. Q4 earnings of $1.38 per share beat estimates by $0.25 on revenues of $20.86 billion that beat forecasts by $2.5 billion. In addition, the company raised the quarterly dividend by 25% to $0.25.
Shares of WFC have experienced a high-volume upside technical breakout, where the only issue at hand is to determine the optimal entry point following a good week of bullish price action. Here too, is where we will use our AI tools to provide a sweet spot for initiating long-side trades in WFC. To get in on this trade, sign up today and don’t miss out on WFC and our other timely long and short strategies.
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 trade 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 volatile 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. Here are some examples of recently closed trades using our services.
The consistent performance of our services is just incredible. Our historical stellar performance is made possible by being right on 85.39% of all trades that we made with an average profit of 36.57% 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 in the event that they need to be viewed at a later time.
Traders seeking the most-timely directional trading strategies where historically over 85% of all trades were profitable to come alongside the Yellow Tunnel community and make one of our services your go-to AI trading platform for no-excuses Trading.
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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 powers my all-world, the proprietary platform, can help you make 2022 the best year on record for your trading portfolio.
Have a wonderful week ahead and let’s create some meaningful wealth together in 2022.