Strong Dollar: UUP! UUP! and Away!
Hello 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.
And here we are! 2023 began as 2022 had ended: all eyes are on the Fed, inflation, and employment continues to be closely monitored, and volatility is still present throughout the market. Treasuries, oil, and various sectors have all taken their turn dipping and spiking while fears of recession cool and heighten. All in all, it appears the majority of uncertainty we had in 2022 will carry into 2023. But fear not, just as promised in last week's issue, I will be giving my 2023 predictions for the year - and based on 2022's successful prediction, one could assume a fairly high success rate on these.
Last week, we reviewed our 2022 predictions which for the most part came true: a strong dollar, rising interest rates, and rising volatility. For 2023, I have compiled a list of seven new predictions that I strongly believe will take place, and from them, I have formed one key takeaway for the entire year's outlook. Here are YellowTunnel's 2023 Year in Trading Predictions:
- A strong dollar will retest recent highs
- Inflation will be on the decline while a drop in yield will take place across the globe
- Major market selloff: SPY can reach $320-$280 levels (20-30% dropoff)
- Multiple rallies and sell-offs will take place with average drawdowns of 15%
- Tech Struggles: TSLA reaching $70, AAPL reaching $80
- Positive Equity Return in 2023: Following a major selloff, a major rally takes place and ample levels of cash will be maintained this year
- Crypto Crash: Bitcoin lowering further to $10,000
Taking that in, this propagates one general view of the 2023 market landscape: the year of active investing. No longer will buying and holding suffice as merely enough to make a buck in the market. Passive investing will no longer net gains while those that are quick to make active investments are more likely to profit.
Following the 2008 financial crisis, the world entered a decade of low-interest rates, low inflation, and easy printing of money. Consequently, due to Covid's impact on our global economy, we've gone from an economic standstill to a remarkable amount of quantitative easing which most likely caused hyperinflation levels.
Michael Burry, the celebrated, real-life hedge fund manager portrayed in the film "The Big Short" concerning the prediction of 2008’s financial disaster, has recently predicted that inflation is here to remain. Even if there are moments where we witness a deflationary period, it will be fleeting and followed by numerous periods of inflation much like those experienced during the 70s and 80s.
How will 2023 affect individual investors? The time of buy-and-hold or passive investment, where one reviews their holdings on a quarterly basis, will probably yield negative growth. We think this will be a decade of hedge fund managers who specialize in active investment and are able to go long and short the market strategically.
As the days of low interest rates, free money, and minimal inflation are slowly fading away, we anticipate a larger sovereign debt crisis to ensure - one that is greater than in 2011 but not as extreme as the real estate crisis of 2008. Although accurately predicting when these events will take place may prove impossible, it is essential to be proactive by actively managing your portfolio for maximum security.
I anticipate 2023 to be a downward market with a notable economic recession. Experts predict that the markets may plummet from 40-60% of their peak values and, as 0% interest rates are far behind us, inflation will become inevitable and bear markets will re-emerge every 2-4 years. But what does this mean for you? It's time to start researching active investing approaches - they have been proven to outperform passive strategies over the course of the next decade! To remain ahead in today’s volatile market environment, learn how you can use this secret strategy now before it’s too late.
I have been using this strategy and my A.I. toolset, which I developed and honed over the years, to help me beat the market continuously. Last year, in a resounding down year for markets, the YellowTunnel community was still able to book gains! See my performance results further below, where we booked double-digit gains!
But that's not all. Along with trading tips, recommendations, and open access to my personal trade log, we will be working through non-trading factors that impact your day-to-day trading. In webinars, workshops, and weekly videos, we discuss the everyday happenings of the market, as well as strategy and a psychological focus, aimed at positioning yourself and your portfolio for the best, profit-making performance!
With YellowTunnel, you get the best of both worlds: top-down and bottom-up approaches. Not to mention our portfolio is continuously managed with exceptional care, even through economic downturns like 2008 - so join us today!
Yellowtunnel Trading Services and Tools Review
As I've stated, at YellowTunnel, we focus on not only trading-centered ideas but also non-trading opportunities that will offer our subscribers a chance to become more well-rounded and complete traders. In addition to the trading tools and ideas available on our website and during our weekly webinars, we provide other resources that can help supplement your Live Trading experience.
That is precisely why I recommend being part of our YellowTunnel trading community, where you can discuss and dissect multiple trading strategies with 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.
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.
CURRENT TRADING LANDSCAPE
As of Friday, the 5-day chart shows the $SPY was trading 1.65% higher, near $386. Major U.S. indices were mixed throughout the week but traded impressively higher on Friday. The volatility index ticked up to open the week but has steadily declined on its way toward Friday, finishing near $21, about 4% lower for the week.
Presently, the overhead resistance levels for the SPY are situated at $390 and then $402. Additionally, its support is placed at $376 and then further down to $370. My current outlook on this market indicates that it will likely experience more lows in a span of two to eight weeks from now. In light of such circumstances, I highly advise investors to exercise caution by hedging their investments against potential losses. See $SPY Seasonal Chart:
As the market continues to shake out and volume increases, I expect greater volatility in these early months of 2023. The weekly jobless claims will largely affect such instability along with companies beginning their quarterly earnings reports next week. Thus, one particular stock stands out as particularly appealing for my portfolio.
Having thoroughly studied the latest news and carefully analyzed my A.I. data, I am confident in this particular trade; however, before we commit to it, let us review all of the market activity that happened over this past week.
The shortened trade week truly kicked off on Wednesday with the latest Federal Open Market Committee meeting minutes released.
FOMC minutes revealed that Federal members consider current inflation levels to be “unacceptable.” The Federal Reserve is determined to raise interest rates in order to bring down inflation and control economic demand. Investors are anticipating the Fed to not only decrease its current rate of hikes but ultimately pause this process completely. The release has caused distress for investors in stocks and bonds as it clearly revealed that the Fed is still uncertain whether increasing interest rates can significantly reduce inflation.
Still, after the FOMC minutes were released, showing that the Federal Reserve is concerned about inflationary pressures, stock markets surprisingly remained resilient and even gained ground on Wednesday's close. Despite news of rising interest rates in order to dampen economic growth and decrease prices, investors appeared to remain confident that stocks will continue to perform well in light of this news.
Over the past year, inflation has dropped considerably from its peak of 9%. With a current rate of just under 7%, we may be closer to meeting the Federal Reserve's goal of 2%--something that should not go unnoticed. After all, high levels of inflation are often correlated with decreased economic activity.
The following day, however, saw the resurgence of anxieties that inflation would remain a constant presence this year. On Thursday, the stock market drastically dropped in response to newly released employment data that demonstrated a strong labor market. Investors viewed this as an indication of the Federal Reserve having to take action with rate hikes in order to manage increasing inflation, prompting them to sell their stocks at once.
This week's employment data was largely anticipated, and the Thursday report sent stocks plummeting as investors became anxious that the Federal Reserve would continue to raise interest rates in response to ADP's private sector jobs report which revealed a tremendous 235,000 job additions- well above predictions of 150,000 for December.
On Friday, stocks were surging in response to the U.S. jobs report for December that exceeded expectations. The economy managed to create 223,000 jobs--surpassing predictions of 200,000! With this news came rising optimism as investors anticipate further economic growth and recovery ahead.
Although the December figure was lower than November's reading, investors can take comfort in the fact that wage growth has slowed. This affirms a decreasing demand for labor is taking place. Such developments are promising news for markets!
Taking this in, it appears interest rates pulled back after better-than-expected CPI data from Europe and a flat dollar. The 10-year yield broke above the key long-term support of 3.5%. With better-than-expected macro data, I expect the 10-year yield to drop to 2.5% by the end of 2023.
Equity markets will be volatile, and in the best-case scenario, the market will reach its bottom in the first half of this year. The main reason is that S&P 500 revenue numbers will likely need to be revised down, which is not factored into current market levels. I expect some pullback as earnings season begins. The dollar remains oversold and should rally in the January/February timeline.
The bear market will continue into next year. The next Q4 earnings season will start impacting the market then. Oil and gas prices are breaking down due to weak demand and are approaching $60 a barrel for WTI.
Initially, the market seemed poised to react negatively to robust labor conditions but reversed its course. Instead of focusing on inflation numbers, individuals have shifted their attention toward recession fears as yields remain lower than expected.
All eyes will be on CPI data next week. If the data is similar to the CPI data from Europe, we can see a continuation of the rally, but I believe it will be capped at the $390-$400 level on SPY.
Next week, earnings season officially kicks off with major banks reporting their quarterly data. Volatility appears to be here to stay, and while the market ended the week on a positive note, earnings season could trigger several sell-offs. This has made one particular symbol and one kind of trade particularly captivating to me.
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Live Webinar Presentation Register Now
PERMANENT BEST 2023 INFLATION/RECESSION-RESISTANT EARNINGS SEASON TRADES LIMITED ACCESS!
WHEN: Thursday, January 19th
THE TIME: 12:00 Noon Eastern Time (11:00 AM Pacific)
TOPIC: HOW TO RACK UP TO 36% GAINS OVERNIGHT FROM
Inflation/Recession Resistant Earnings Season Trades
Immediate Free Access to my watch list of stocks I will be trading.
Right now is the best time to pick through the trades that are expected to soar.
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As one of a limited number of participants, you’ll have an opportunity to participate in our “biggest concern” survey and you’ll also have the opportunity to ask your specific trading questions for me to answer.
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Just click on the following link below to register right now for my “How to Rack-UpTo 36% Overnight Gains From Inflation/Recession Resistant Earnings Season Trades” Webinar at 1 p.m. ET on January 19th…
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SECTOR SPOTLIGHT
Looking at the latest market conditions and overall ratings, it appears the dollar is in a position to rebound from a recent dip if market conditions are to flip as expected. With the recent uptick to end the week, markets are positioned to sell off if earnings do not meet expectations or provide reliable signs that inflation will be quelled. With this in mind, the dollar should find its footing and regain some strength it lost to end the year.
As seen above, the dollar, based on the Dollar Index (DXY), has sold off since hitting a peak near the end of October. With the holiday rally and midterm election clarity supporting markets, there was a notable decline in what was 2022's best performer. However, with 2023 starting off as it has, I am under the belief we could see the dollar mimic its 2022 start-of-year trend and trend higher - and my YellowTunnel platform agrees!
The $DXY sold off on Friday, down 1.06%. Its 52-week range sits at $94-$114 which means its current price of $103 sits right in the middle of its annual range. Here, we can see the dollar go in either direction. However, if markets are lower following earnings, we could see a decent spike in the dollar's value.
The upbeat December jobs report sent gold higher and the dollar lower but positioned the market in an interesting spot as we entered the first earnings season of the year. Coming off the heels of a hawkish Fed, a labor report which was not too strong to sour investors, and slightly lower inflation, the first few weeks of 2023 could see a rise in volatility with a strengthening dollar. If that is the case, this brings me to one particular symbol I love trading during times like these, when I'm looking to make a buck off the buck.
TRADE OF THE WEEK
If you're searching for a dollar index fund with impressive outcomes, the US Dollar Index Bullish Invesco Fund (UUP) is my top choice. It consistently outperforms the competition in terms of data analysis and scores highly within my universe.
US Dollar Index Bullish Invesco Fund (UUP) currently trades at $27.95 near the median UUP's 52-week range, $25-$30. UUP has achieved a grade of "A" for excellence, placing it in the upper 10% within my system. Additionally, UUP is currently trading significantly lower than its earlier levels.
By investing in the bullish fund, you will gain access to a long position on the dollar - which, based on its recent low points indicates a high potential for gains. What's more, it shorts non-U.S currencies such as the euro and yen. Overall, this symbol offers an excellent way to capitalize on dollar performance while hedging against other currencies.
With YellowTunnel's Stock Forecast Toolbox providing a 10-day outlook for UUP, my AI system predicts that the symbol is due to experience substantial growth soon. The projected change pattern indicates this will be an advantageous trade according to my criteria for selecting effective trades.
UUP is showing a consistent uptrend with its predicted data vector forecasts. When seeking out a trustworthy vector trend, we look for one which has an upward trajectory with minimal volatility along the way. UUP perfectly fits that description as it continues to make incremental gains without any wild fluctuations.
As mentioned before, a couple of events that could spark an influx in selling would strengthen the dollar at its current oversold state. Looking at the Invesco DB U.S. Dollar Index Bullish Fund ETF (UUP), our proprietary AI-driven Seasonal Chart, we see that there is a sizable gap between the current price and the annual seasonal level, which means the symbol has plenty of room for the upside. See the $UUP Seasonal Chart below:
This week, I'm investing in $UUP ahead of the upcoming earnings season!
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 85.01% 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 first quarter of 2023 the best trading quarter of your portfolio yet!
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 see the link below:
Thank you for subscribing to my blog. Wishing you and yours a very happy, healthy, and prosperous New Year!