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May 15th, 2022 | Issue 130 |
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Equity markets took it on the chin this past week with Friday's up session underscored by a much weaker than forecast consumer sentiment reading that raises the specter of the Fed dialing back the level of their hawkish monetary policy directives. Inflation remains stubbornly high as reported by both the CPI and PPI data showed. The USDA is forecasting a deficit for wheat crops for 2022 and 2023, prompting fears of shortages re-emerging. So, even if consumer spending pulls back, there are some embedded problems with sufficient supplies of food and energy that stokes concerns of stagflation overriding the economy going forward. There is also a growing concern that China's economy is slipping into a recession which could weigh on U.S. economic growth. The dollar is trading at new multi-year highs that will have some impact on earnings from U.S. multinational companies that do over 50% of their business outside the U.S. China is moving to enact measures to reinvigorate growth and time will tell if it is effective as they work through the Covid lockdowns. It is a lot to take in for traders, but uncertainty creates opportunity! To this point, I can't emphasize how vital it is for blog 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 AI platform is navigating us in and out of select trades. It's FREE and I want 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: https://discord.gg/YjBfkaqGGu 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 specified 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. |
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| Vlad Karpel
YellowTunnel and Tradespoon Founder |
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P.S. Please see below for access to the Power Trading Live Strategy Roundtable presentation I recorded on Thursday, May 12th. Click Here P.P.S. Join our Discord Community to participate in our Free Live Trading Room Sessions every Monday and Wednesday at 8:15 am cst. Click Here To Join |
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This week's pick, ProShares Short QQQ (PSQ), is the inverse ETF that is an easy way to short our Sector Spotlight security highlighted. Traders are getting an excellent oversold bounce in the Nasdaq 100 that should provide an attractive entry point for shorting the QQQ into strength. Due to the extreme oversold technical condition, the market could experience a 2–3-day rally after getting hammered so hard, but looking at the charts of Apple, Alphabet, Amazon, Microsoft, Meta Platforms and other top holdings, all I see are busted chart patterns where downside risk remains high. When we apply SH to our AI-driven Forecast Toolbox for the near term, we get a Model Grade "A" rating with a Predicted Resistance price target of $16.37 which is 19% higher than where PSQ currently trades. A move to $16.37 would be a new 52-week high and imply a new low for QQQ. Hence, with each oversold bounce, investors can leg into PSQ and protect their portfolios from material downside risk, or just put this trade on for potential short-term profits... |
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This juiced-up algorithm boasts an 85.26%+ success rate. They call it "Schwab on Steroids" |
Taking my AI to the next level |
I've rebuilt my algorithm from scratch. Improving it greatly over the last few market swings. Making it stronger - even during inflationary and uncertain times. And adding the one feature I always wanted to include: trade recommendations. Now, this "algorithm on steroids" doesn't just help me choose stocks…it actually picks the stocks for me, helps me set up the trades, and notifies me when to buy and when to sell. |
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CURRENT TRADING LANDSCAPE |
The closely watch Relative Strength Index (RSI) fell to 28.0 on Thursday, a lower level than in March 2020 (30.0) and in Q4 2018 (37.0), indicating an extreme oversold condition for the major indexes. This past week witnessed two 90%+ down days, meaning over 90% of all stocks were trading lower during two separated sessions. That's rare. The good news is the yield curve reverted back to where the 2/10 Treasury spread is back up to 31 basis points, implying a recession is not imminent. WTI crude is trading back above $109/bbl as of early Friday, which is sure to keep gasoline prices up heading into the summer driving season. As of Thursday's close, the $SPY closed lower 0.1%, at $392, intraday testing the 20% correction territory. The value/reflationary ($VTV) closed higher 0.17%, at $138, below the 200 DMA. The technology sector ($QQQ) closed lower 0.2%, at $291, testing the 50 percent retracement from the pandemic low to high. |
As per my opening comments, the market is struggling to find a tradeable bottom and with each rally attempt, fund managers are lightening up on growth stocks with some of the heavyweight mega-tech stocks breaking down after holding up fairly well throughout the current correction of the past four months. That has changed, and now the rolling correction is hitting up against the inner sanctum of the tech sector. Shares of Invesco QQQ Trust (QQQ) represent the majority of key stocks within the tech sector that matter most to the market. Technology represents roughly 19% of the total assets that make up the S&P 500 and the top ten holdings within QQQ account for just over 52% of fund assets. That's pretty concentrated not only for the Nasdaq but for the market as a whole. When we apply our proprietary AI platform to QQQ, we get a reading where the Predicted Resistance is up at around $299 whereas the Qs traded Friday, with Predicted Support down at $255, representing some meaningful downside. Bear market rallies can be violent, as we've seen on occasion this year, but they quickly shrivel with a resumption of the primary downtrend until valuations become more compelling in a slowing economy beset by high inflation... |
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Join Our Discord Community Participate in our Free Live Trading Room Sessions every Monday and Wednesday at 8:15 am cst. Click Here To Join |
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NOTE: We encourage all subscribers to view the instructional videos on how to best use your membership and invite our members to participate in live weekly strategy roundtable workshops that are also archived for your convenience so that they can to be viewed at a later time. |
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To effectively trade in today's rapidly moving equity markets, active day traders and swing traders must stay ahead of market changes due to inflation, global uncertainty, politics, as well as innovations and technological changes used by hedge fund traders and proprietary trading firms. With traders like you in mind, we designed this intensive roundtable where you will deepen your understanding of all aspects of stock and options trading in today's changing market. |
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DISCLAIMER: Vlad and his team may have a financial interest in the picks as they trade many of the same equities and options they pick. Vlad Karpel and YellowTunnel (Company) is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. All investing strategies are made available to the general public on a regular basis. We do not provide personalized financial advice or investment recommendations. As an investor, you know that any kind of investment opportunity has its risks. There is no such thing as low-risk stocks and we recommend you invest wisely and that only risk capital should be used to trade. Investing in Stocks and Options is highly speculative. No representation is being made that the use of this strategy or any system or trading methodology will generate profits. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed here and on our website. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE SUCCESS: It should not be assumed that the methods, techniques, or indicators developed at YellowTunnel will be profitable or that they will not result in losses. Nor should it be assumed that future picks will be profitable or will equal past performance. All of the content on our website and in our email alerts is for informational purposes only, and should not be construed as an offer, or solicitation of an offer, to buy or sell securities. Remember, you should always consult with a licensed securities professional before purchasing or selling securities of companies profiled or discussed on YellowTunnel.com. Performance results that are discussed above are from the Live Trading Room, multiple YellowTunnel tools were used to achieve these results. Trade % Gain/Loss is calculated by dividing the $ Gain/Loss by the Max Risk which is the posted Stop Loss for the trade. Yellow Tunnel's performance data represents the average return on all trading recommendations from January 1, 2020, to today. *Win rate percentage reflects the average that Yellow Tunnel's software helped me identify a profitable investment strategy.** Triple-digit returns are not typical and are not intended to reflect the likelihood of similar returns in the future. |
This email was sent to edwardlorilla1986.paxforex@blogger.com by info@yellowtunnel.com. Questions or inquiries regarding the website and/or service may be submitted via email to info@yellowtunnel.com. You may also complete our inquiry form located here. YellowTunnel LLC, 318 Half Day Rd., Suite #215, Buffalo Grove, Illinois 60089. Website: https://www.yellowtunnel.com Copyright © 2022 Yellow Tunnel LLC. All rights reserved. |
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