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October 23rd, 2022 | Issue 153 |
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U.S. markets were once again pulled in both directions this week but ultimately look to finish the week with solid gains as all three major U.S. indices turned higher on Thursday and Friday. Growing bond yields, which have ballooned to an over 10-year high, are the main driver of pressure on shares this week, while positive corporate earnings are offering support. With the latest push-and-pull in the market elongating the market-wide accepted notion of a fallout from high inflation, investors are again asked to endure the uncertainty and find solace, or profits, where they may. The current situation applicably reminded me of the latest book featured in my book club: Endurance by Alfred Lansing. Released in 2015, this book tells the true story of explorer Ernest Shackleton and his 1914 expedition as a polar explorer looking to discover Antarctica. As the last uncharted sect of land on earth, Shackleton and his team ventured deep into the south Atlantic ocean, nearly 1,000 miles from the nearest point of civilization, in an attempt to chart this land. What ended up happening became a tremendous story of resilience and perseverance. When the large vessel was launched in 1912, it was considered one of the strongest wooden ships, if not the strongest wooden ship of the time. Starting in August 1914, the ship was en route to South America as a launching point for the voyage. By December 1914, the ship was leaving its last port of call, an Island off South Georgia (which lies approximately 1,000 km east of the Falkland Islands), with its sights set on Vahsel Bay (near Antarctica). It did not take long for the plan to go array as the ship became icebound by the end of January 1915. |
Among increasingly thick ice, the ship, which was immovable, left the sailors no other option but to wait for a crack in the ice. While several cracks appeared and offered hope, not all reached the boat, and often the advancement of the ship following an opening in the ice would not be farther than 200-400 yards. Several plans were discussed, like ramming the boat towards the cracking ice, but were ultimately put aside as the risk of totally wrecking the boat became overwhelming- with no ship, they had no chance of survival. With a ship, there still was a chance. While icebound, the sailors hunted penguins for food, fought off sea lions, and kept warm as best they could. The current state of the Endurance painted Shackleton as the anti-hero: a lofty goal gone bad, risking the lives of nearly 30 people and resulting in a tremendous money dump. How the journey ended, however, redefined the notion of a hero surviving the greatest odds. |
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Floating somewhat adrift through the half-cracked ice of "summer" in Antarctica, the ship reached a point of no return in October when it experienced severe cracks. The large vessel was crushed and sank, however, crew members were able to save three of the smaller boats on board and the crew continued to endure. By Spring 1916, the crew had successfully discovered Elephant Island, where they would work from in an attempt to be saved. Ultimately, Shakleton was able to bridge a connection back to civilization and the crew members were saved. The resilience of the crew was unlike anything recorded before and formed an all-time model of perseverance. They charted Antarctica, battled nearly every single odd, and made it out to the other end to tell the story. Endurance, the ship, was swallowed whole by the ice and reformed a new layer of ice right atop it as if there was never even a ship there. Even though the ship disappeared, the story of the Endurance never will. |
We rarely battle unbearable climate conditions from our trading desks, however, our journeys are never as smooth as planned. Shackleton had no idea the journey he had set forth on, even with the understanding of the gravity of the situation and hardships he had planned for. There is no way he would have known the journey would go as it did. U.S. recession fears have lingered since the start of summer and ballooning concerns over the growing levels of inflation have pretty much been an issue since 2021. When will the "seas' ' of the market settle or when will the recession finally "crack the ice" and swallow our ship whole is anyone's guess. We may not be able to plan for the exact moment everything will go bad, but we can prepare for it. And more so, when it is here, we must endure. And while I am not suggesting we start hunting for penguins because the price of food, and most things, have spiked, I am suggesting we ready ourselves for these types of worst-case scenarios when it has become apparent we are moving through thick ice. The market continues to find support here and there, but ultimately, investors are aware of the coming extreme inflationary pressures - if not full-on recession. One of the best ways to do this is to never trade alone. Just like those sailors had each other to build a community they could lean on and survive with, traders ought to build their own community and support each other. That is why I recommend being part of our YellowTunnel trading community, where you can discuss and dissect with me and 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: |
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. Click here for access to the Power Trading Live Strategy Roundtable Recorded every Thursday. 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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Just this week, Netflix, Inc. (NFLX) offered excellent earnings and has been one of the most surprising stocks to come out of the latest earnings season. I was reviewing market trends and saw that technology showed a lot of potential for growth. Furthermore, even well-known names that have performed poorly in the past are showing signs of improvement. This made Netflix even more alluring to me. NFLX is currently trading near $289, far below its 52-week high of $700. Just this past week, the symbol booked nearly 24% gains as a robust earnings report propelled shares impressively higher. Looking at the road ahead, tech is due for a bounce back with plenty of support around it. Earnings should set off a good rally for the sector, and this symbol, while adding political clarity, usually offers market-wide support. Going from an earnings rally to a midterm election rally and potentially a holiday rally thereafter make Netflix's path higher significantly easier. While this is just an educated assumption based on upcoming events, let's review the A.I. forecast and see if we can find more evidence to support this symbol. |
Looking at Netflix's 10-day forecast from the Stock Forecast Toolbox, we see several encouraging signs. First of all, the symbol is sporting a model grade "B" placing it in the top 25% of accuracy based on the toolbox's data universe. Although Vector begins in the red, we see a steady climb toward the positive before a resounding move toward gains, with vectors scores moving in tandem after a few down days... |
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With this Income Calendar — and my guidance — you'll know exactly when you can place your trades weeks ahead of time to maximize your trading for explosive trading performance. This is the peace of mind you need while the market rolls in the chaos… and today is the FINAL date to sign up to be eligible for your first monthly payment! |
(A portion of Yellow Tunnel sales will go to directly help the Ukrainian people) |
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CURRENT TRADING LANDSCAPE |
The current market direction appears to be moving higher at the moment. The bottom, for now, has been developed with overhead resistance levels in the SPY presently at $380 and then $390. The $SPY support is at $367 and then $357. |
This week was marked by several highs and lows, as investors were pulled in opposite directions by strong earnings reports and growing bond yields. The Beige Book, also released this week, provided the latest snapshot of economic conditions around the country. Corporate earnings are due to continue next week with several marquee names as well as GDP and PCE reports. Even though some companies are beginning to see a return to growth in their earnings, U.S. stocks remain under pressure as Treasury yields continue to rise. With all three indices fell on Thursday, they are still set to end the week higher. The Dow is up 3.6%, while the S&P 500 has risen 3.8%. And with a 4.8% gain, the Nasdaq is looking to finish this week stronger than it has in over four weeks. Key earnings that topped estimates and saw shares spike include Netflix, AT&T, and IBM. With most earnings thus far seeing positive reports, major U.S. indices were able to stop the latest slide in the market after developing a bottom. Not all earnings have been rosy, however, with Tesla, for example, missing targets and seeing shares slide following their latest report. In addition to the market support received from positive earnings, Wednesday's release of the latest Beige Book offered promising insight into the economy's current state. The Beige Book for this quarter revealed ongoing inflationary pressures in all 12 financial districts. However, on a positive note, there was "modest" growth reported for the U.S. economy as a whole. Several sectors even showed impressive growth that ultimately helped relieve the extreme pressure the market has seen from troubling inflation data. The recent upswing in bond rates has caused worry and instability among investors. When U.S. Treasury yields suddenly increased, it put extra strain on stocks before they managed to stabilize from this week's stronger-than-anticipated quarterly earnings reports. The 10-year yield rose quickly to 4.228%, the highest level since July 2008, which then led to more stock market volatility... |
Earnings season has shown us the market is able to endure growing pressure given the right circumstances. Positive reports have subverted the massive weight growing long-term bond yields have put on the market. As yields balloon to multi-year highs, U.S. markets were able to book gains behind strong earnings and encouraging economic reports. Looking at the market landscape in front of us, there are additional potential rallies to take advantage of despite the current bearish nature of the market. Booking these gains will require astute focus on where the market is leaving room for the upside. One particular sector that fits this bill perfectly is the technology sector. Google, Amazon, and Apple are set to release earnings next week, which if positive, could be a huge boost for the tech sector - if not the entire market. Seeing how the latest earnings have performed, along with what we saw in the Beige Book, I am optimistic we can mirror that performance in the upcoming weeks. Picking a specific symbol within the QQQ to build profits from is another venture I will be looking into in the coming weeks. One symbol, in particular, has caught my eye which is flashing encouraging signals based on technical levels and A.I. forecasts... |
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Market Volatility 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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