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June 20th, 2022 | Issue 135 |
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Selling pressure further accelerated this week after global central banks also raised short-term rates in lockstep with the Federal Reserve's decision to bump the Fed Funds Rate by 75 basis points. Stocks initially took the news well, seeing the Fed as being proactive, but negative sentiment swept through the balance of the week as the notion of the economy entering a recession has taken a firm hold on investor sentiment. In light of the downbeat mood, energy prices and bond yields have both declined, thereby providing potential building blocks for a market bottom to begin forming at current levels. Markets are pretty swift about self-correcting and when the pendulum swings quickly in the direction of the recession camp, then it is thought that inflation will invariably cool in the second half of the year. The bearishness has gotten pretty extreme with the Nasdaq now down nearly 35% from the high where the Invesco QQQ Trust (QQQ) is sitting just above its 200-week moving average right around $261 or about 10 points below where the QQQ trades Friday. While the intermediate-term trend is down, there is a real opportunity to profit from short-term oversold rallies, but knowing which sectors and stocks to work with is crucial in maximizing bear market rallies. 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, June 16th. 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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With the top ten holdings in QQQ, both classes of Alphabet Inc. (GOOG) account for almost 8% of assets, ranking it third behind Apple Inc. (AAPL) and Microsoft Corp. (MSFT). There are three reasons why GOOG makes for an attractive trade this week. First, the company posted a very solid quarter and provided good sales and profit guidance for the current quarter. Of the 38 analysts that cover GOOG on YahooFinance.com, the average earnings estimate for 2022 is $112 per share which is forecast to grow by 18% to $132 per share in 2023. Trading at 19 times this year's earnings estimate and 16 times next year, the stock is cheap relative to its growth. Secondly, the stock is looking like it is forming a quintessential double-bottom pattern on the that where there is key support at $2,000 going back to February 2021. Short of another pandemic, I don't see the stock trading back down to its 200-week moving average when factoring in its cheap valuation and robust earnings outlook. |
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Your Weekly Power Trader Charter Membership…. |
Give a Great Gift with a Historical 86% Win Rate: For the Next Four Sundays, While Watching Baseball, Golf…60 Minutes, You'll Receive My Best ETF Picks. |
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CURRENT TRADING LANDSCAPE |
The $SPY closed lower 3.3%, at $366, below the key long-term support - $380. The value/reflationary ($VTV) closed lower 2.7%, at $128, breaking below the 52-week low. The technology sector ($QQQ) closed lower 4.0%, at $271, trading below the 52 weeks low. The $DXY closed lower, near the $104 level, trading below the December 2016 high. The $TLT closed higher 0.8%, at $1101, and facing the key long-term support. The ten-year yield closed lower at 3.2%. The $VIX closed higher, near the 33 level. The $SPY short-term support level is at $364 followed by $350. The SPY overhead resistance is at $383 and then $396. I would be a seller into the rally and have a NEUTRAL portfolio at this time. Short-term the market is oversold and undergoing the bottoming process. "BUY" signal based on the Aggressive Power Trader Portfolio for tomorrow is at $354 level using SPY and the "SELL" signal is at $383 for short-term traders. If you are trading options consider selling premium with September and October expiration dates. |
As noted in my opening comments, the big-cap technology stocks led the market to new highs and have summarily been the weight on the market's decline. Valuations have been radically adjusted lower to where many of the leading tech stocks now trade at historically low P/E ratios that argue well for traders to consider getting long. Shares of the Invesco QQQ Trust (QQQ) make for an ideal trade to profit from an extreme oversold condition. The QQQ represents the Nasdaq 100 and is dominated by technology stocks that comprise roughly 51% of total assets... |
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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. |
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