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July 31th, 2022 | Issue 141 |
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This week, the Fed announced its latest interest rate hike, mega-cap stocks like Google and Amazon reported earnings, and the latest GDP data was released. Also, this week I took my six-year-old son fishing. We went up to Michigan, about a three-hour drive, and got ourselves a boat to go out on the lake. Ever since I took him fishing on our last vacation, he has not stopped talking about going fishing again, so I figured what time was better than now. I remember going fishing with my father. It certainly left an impression on me, even after all these years, I remember it fondly. A special memory I get to share with him. And just as he hoped to brighten my youth and create a memory with his son, I hope for the same. I surely will remember this summer as the one I showed my son how to fish and I hope to experience this, as well as many other activities and memories, for years to come with him. Just like I will remember fishing with my son in regards to that relationship - as a trader, it is important to know what will leave a meaningful imprint on the market. As I stated, it was a news-heavy week: FOMC, GDP, and Q2 earnings. Inflation concerns fluctuate weekly and while the market's reaction to these headlines and reports is important, it is also important to separate the news from the noise. When we look back on 2022, what will we remember as the pivotal moments of the market? Parsing through these events can be overwhelming at times, especially if you are going through each of them alone. That is why I recommend being part of a trading community where you can discuss and dissect 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: |
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How To Trade a Bear Market Strategy Roundtable On Wednesday, markets responded positively to the latest FOMC decision. The Federal Open Market Committee voted to raise the federal funds target rate by another 75 basis points, bringing the range to 2.25% to 2.50%. The immediate question is now how quickly the Fed will raise rates in the future. The Fed also said that it expects "permanent adjustments in the target range" to be appropriate. Then, the release of data on second-quarter GDP, which revealed that the United States economy had shrunk by 0.9% between April and June, surprisingly helped boost stock prices Thursday. The results were the second-consecutive quarter of decline, following a -1.6% first-quarter performance in 2022, traditionally an indicator of recession. The GDP report raised some concerns about a recession, however, the market kept moving higher through Thursday and Friday. |
Next week, earnings will continue pouring in with a focus on retail and economic reports to watch out for, including July employment and manufacturing data. Q2 corporate reports we will see include PayPal, Caterpillar, Starbucks, BP, Uber, Toyota, CVS, Moderna, Alibaba, Berkshire Hathaway, and DraftKings. With another news heavey week, I will be keeping an eye on volatility as we parse through the latest data. The market will likely continue to respond with an added focus on inflation and it will be as important as ever to separate the news from the noise. 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 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 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. |
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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, July 28th. Click Here P.P.S. Join our Discord Community to participate in our Free Live Market Volatility Trading Room Session every Monday and Wednesday at 8:15 am CST. Click Here To Join |
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This week's choice is ProShares Short S&P 500 ETF (SH), an inverse ETF that is a simple way to short the S&P. Traders should be able to get a great trade on this inverse ETF, which should provide some stability following another big Fed rate increase and as we make our way through the end of the current earning season. |
The SPY inverse ETF YTD Daily Total Return is currently at 15.5% and the ETF enables investors to make a single-day wager against the S&P 500. The end goal of this leveraged and inverse product, like most leveraged and inverse products, is to provide one day's worth of inversion exposure to the underlying index—a cap-weighted basket of 500 large-cap U.S. firms chosen by the S&P Index Committee—with over $2.6 billion in assets. The current overbought nature of the market provides a good spot for this ETF to work as a hedge and our A.I. arsenal is signaling just the same... |
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My Exclusive Offer To Trade With Me |
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| The Weekly Power Trader algorithm is an improved version of an algorithm that helped me bank an average gain on the risk taken of 37.09% per trade - that's not cherry-picking the winners, either. |
That includes every market hit since January 2020 and I expect to do even better since last week's Fed interest announcement. |
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This is the exact type of system that the big-time traders subscribe to. |
Get unlimited access to the Weekly Power Trader system for just $9! |
Get unlimited access to the Weekly Power Trader system for just $9 – before prices are jacked-up! If you sign up today, you'll not only be able to access our Live trading room and trading resources that come with the product, but you'll also get instant access and be able to follow all of our stock, option and ETF trade recommendations as they happen. And you can get the first 30 days for just $9. You might be tempted to think that you'll get a "limited" membership with a few sample trades or that we don't make that many trades in an average month. For just $9, you get a full month of trades! Remember: the trades I made had an average return of 37.09% with an 85% win rate on our collective trade recommendations! Best of all, if you click here, you won't have to risk a penny… |
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CURRENT TRADING LANDSCAPE |
As of Friday, the 5-day chart shows the $SPY was trading 3.41% higher, just over $409. The S&P 500 held onto its gains on Friday as the latest GDP report appeared to have little impact on the market. Oil and gold traded higher to end the week. European markets saw solid movement higher while Asian markets closed in the red to finish the week. The $DXY marginally fell on Friday, near the $106 level, whereas the $TLT rose throughout the week and continued to do so on Friday, near the $118 mark. Looking at these levels and the movement of the market following this week's announcements, I still do not believe this is the restart of the bull market but rather an impressive rally in a bear market.
In my opinion, the short-term rally will continue into August, and the bear market will resume its downward trend in the September-October time frame...
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With the FOMC decision behind us, I am looking ahead to see where the next market-moving news will come from. Outside of GDP and FOMC news, mega-cap tech earnings dominated the week but dwindled significantly in the upcoming week. While we will still see plenty of earnings next week, the mega-capsmegacaps, which traditionally are indicators of the rest of the market, are done reporting. Having the likes of Apple, Amazon, Google, and such behind us means the market will not be supported by rosey guidance of the major tech players and will deal with the remaining economic and earnings reports. These will likely move the market but not as significantly as mega-capsmegacaps. So, with this in mind and the latest GDP and inflation reporting, I am focusing on a sector that I think could produce some good profits. I believe the market is overbought at the moment and the rally will likely continue into August. However, downward momentum could resume as early as September. The tech sector has withstood the latest troublesome inflation reports and recession concerns. However, as we move further from the latest Fed decision and earnings season, both of which supported the market, I believe this sector is a prime candidate for a great hedge... |
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Market Collapse LIVE Trading Room Sessions Join Our Discord Community 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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