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.
So much for a long dull summer market. Monday’s 700-point sell-off for the Dow reversed itself and climbed higher throughout the rest of the week, trading back up to within 1% of its record high. Both the S&P and Nasdaq also traded to within 1% of their previous record highs with the Russell 2000 lagging.
The best way to explain the price action is that during the worst period of the pandemic, tech stocks performed best. The earnings from big-cap tech companies remained healthy and the threat of a resurgence of Covid-19 from the Delta variant has traders and investors gravitating back to the tech sector with gusto.
The flight to Treasuries has also eased with the yield on the 10-yr T-Note climbing back up to 1.3% from 1.13% earlier in the week. The VIX spiked to 25.0 and has retreated to 17.0 as of Thursday, just to illustrate how wild volatility has been. Roughly one-quarter of S&P 500 companies have reported second-quarter earnings with the majority beating estimates. The reaction by stocks to the upbeat earnings parade has been mixed.
CURRENT TRADING LANDSCAPE
The $SPY continued to rebound and is on its way to test the all-time highs. The bank stocks and the rest of the reflationary stocks started to resume their downward momentum. The technology stocks outperformed the market.
The $DXY has broken above $90.60 resistance and has confirmed its breakout. The next level of resistance is at $93. The $TLT continued to trade higher and has more room for the upside (lower yield.)
The question is "Is this the beginning of the next leg up in the market?" or "Is this just a short-term rebound from record oversold levels in the reflationary stocks?"
Based on the steep correction in the reflationary stocks, strong dollar, and overbought technology stocks, the market will continue the correction in July/August. The $SPY short-term support level is at $425, followed by $416. The SPY overhead resistance is at $438. I expect the next stage of correction to resume this week or next.
I would consider rebalancing the portfolio at this point to be more market-neutral. The second wave of the sell will continue for the next 2-4 weeks. Market corrections are never a one-way trade.
Based on our models, the $SPY can pull back 5-10% from the all-time highs in the next 2-4 weeks. If you are trading options consider selling premium with October and November expiration dates.
"BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $428 level using SPY and the "SELL" signal is at $435 for short-term traders.
Based on our models, the market (SPY) will trade in the range between $400 and $440 for the next 2-4 weeks.
NEW WEEKLY DYNAMIC POWER TRADER SERVICE
We recently launched our new Dynamic 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.
What makes this new service so special is that 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 positions for 2-5 days by using options (selling OTM BULLISH PUT 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 color 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.
I want to show you how this AI-powered algorithm has helped me bank winning trade after winning trade --- through good markets and bad.
Introducing the Dynamic Power Trader.
You open it up, set up your trades, and then move on with your week.
That’s because I built a proprietary algorithm that pinpoints winning stocks no matter what the market does. CLICK HERE to trade along with me. I also have skin in the game and put my money where my mouth is.
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Founder & Chief Investment Officer
Within the broader reflation trade, the top-performing sector year-to-date has been the energy stocks. As the price of crude traded up to $80/bbl before consolidating, shares of the oil and gas, drilling, servicing, transport, refining, and pipeline companies all participated in a broad and powerful rally. This move higher caught much of Wall Street off guard and flat-footed as most fund managers had little if any weighting in energy.
The Energy Select Sector SPDR ETF (XLE) is the most widely held and traded ETF for taking advantage of a sector move. The top 10 holdings make up better than 76% of total assets, providing for a decisive concentration on the most powerful stocks in the sector where institutional participation is highest.
Part of the narrative as to why oil prices have shot higher and are staying elevated is that demand for crude products is outstripping supply due to much tighter regulations about developing and getting fossil fuels to end markets. Renewable energy sources are not sufficient to pick up the slack, at least not yet, so the shortfall is forcing up prices for crude, natural gas, and refined products.
For traders wondering if the pullback in energy is complete, we can turn to our AI tools to gain some insight. When we apply our Seasonal Chart to XLE, we see that for the next 20-day period, the trend is still lower, but then turns decidedly higher over the next 30, 40, and 50-day periods. We could see the 20-day indicator flip to a “Higher” reading any day now, and traders that act on this opportunity should consider joining Weekly Power Trader to follow this trade when we put it out to our subscribers.
At Weekly Power Trader, we apply our custom proprietary AI algorithms to all market trends and scenarios where even when it appears the conventional thinking is in the right position, it can turn adversely against the herd mentality in a hurry, just as has happened recently.
TRADE OF THE WEEK
The top holding in XLE is none other than ExxonMobil Corp. (XOM), America’s largest fully integrated energy company. People mostly know XOM from visiting their service stations, but ExxonMobil just happens to be the second-largest natural gas company in the world behind Russian behemoth Gazprom.
Since trading up to a 2021 high of $64.92 in late June, shares of XOM have retreated to as low as $55 recently where buyers are emerging. From the 5-day chart below, we can see how the stock to trying to put in a trading bottom and looking like a bullish setup in the works.
Our AI-driven Forecast Toolbox gives XOM a Model Grade “A” rating with a Predicted Resistance price target of $85.46 over the next six months. That’s about 30 points of upside, making for a significant trading vehicle as long as our AI models are bullish on the stock and the sector.
To this point, we’ll be looking to greenlight this trading opportunity in the days ahead and want to encourage all readers of this blog to sign up to get in on this big breakout that should produce multiple trading opportunities for us.
This is what our precision AI platform does for our members. It identifies, clarifies, and verifies high-quality trades like XOM. 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. The two platforms work 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 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. My track record speaks for itself from a standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain.
Considering the choppy landscape of late, we’re taking advantage by shorting some stocks and ETFs for quick profits. We’re striving to help our members to ring the register all the time and this is why serious traders don’t trade without market-proven AI tools to help them.
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 86.55% of all trades that we made with an average profit of 36.19% 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 86% of all trades are profitable to come alongside the Yellow Tunnel community and make one of our services your go-to AI trading platform for no-excuses performance.
Our AI platform crunches and analyzes thousands of proprietary performance indicators to help identify the next big trades to supercharge 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, proprietary platform, that can help you make 2021 the best year on record for your trading portfolio.