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June 12th, 2022 | Issue 134 |
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The market woke up on the wrong side of the bed Friday after the latest inflation and consumer sentiment data greatly disappointed Wall Street. The CPI for May came in at 1.0%, above forecasts of 0.7% and Core CPI ex-food and energy registered a gain of 0.6% was above the 0.5% estimate. Prices were broadly higher across several parts of the economy, new and used cars, housing and especially food prices saw its largest 12-month increase going back to 1981. Add in gasoline now at $5/gallon on a national average and the message is clear – the Fed has a lot of work to do. The late selloff Thursday leading into the release of the data Friday smacks of the numbers getting leaked, which tends to be more commonplace these days. Regardless, the key takeaway is that the market had priced in two more half-point rate hikes for June and July, but now it is presumed there will be another rate hike at the September meeting, with November and December meetings also a possibility. Inflation and a strong dollar will likely result in a swath of lower earnings revisions that will further contract stock multiples on growth stocks with earnings. For stocks with high price-to-sales multiples with no earnings, there remains a significant downside risk. At this juncture, traders should be combing the market for deep value stocks with low P/E multiples, such as what I highlight further in today's column below. 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 9th. 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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Of the top holdings within the JETS ETF, Delta Airlines Inc. (DAL) shows up best within the sector. Delta is the largest U.S. airline by sales and has the strongest balance sheet among the major carriers. After posting a loss of -$4.08 per share in 2021, the company is forecast to earn $3.15 per share in 2022 and $6.34 per share in 2023 according to average estimates by the 19 analysts that cover the stock (www.yahoofinance.com) This soaring profit growth comes as a byproduct of an estimated rapid 59% rise in 2022 revenue to $47.5 billion. At the stock's current price of $35.50, the shares trade with a forward P/E of just 5.6x, fitting the very profile I outlined in my opening comments to seek out deep-value stocks that are being sold down in sympathy with the market... |
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Your Dynamic 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 narrative has taken a sudden turn from a soft landing later this year to that of "fire and ice" where red-hot inflation leads to a recession. Fear is greater than greed and stocks fall faster than they rise - they take the stairway up and the elevator down. A retest of the March lows for the major averages looks imminent. As of mid-Friday, the $SPY is trading down 2.6% to $390, right below the short-term support resistance - $399. The value/reflationary ($VTV) trades down 2.1%, at $137, below the 50 DMA. The technology sector ($QQQ) trades lower by 3%%, at $290, below the $50 MA. The $DXY trades higher, near the $104.2 level, trading below the December 2016 high. The TLT trades lower by 1.09%, at $113, and facing the key long-term support. The ten-year yield is higher at 3.18%. The $VIX trades higher, near the 29 level... |
Trying to pin the blame of inflation on any one factor does no one any good, but there is plenty of finger-pointing going around. What gets lost sometimes in the discussion is that consumer demand remains robust for goods and services in areas where discretionary spending isn't being compromised. Take travel for instance. The major airlines and hotel chains have broadly guided the Street higher on revenue and earnings for the summer travel season. Airports, hotels, amusement parks, beaches and rental cars are sold out through Labor Day. Although this reality runs counter to the market's negative reaction to the CPI data, most folks with summer travel plans aren't canceling their trips because of higher gas prices. Within the buoyant travel sector, the U.S. Global Jets ETF (JETS) offers traders a vehicle to trade the pullback in an industry that is seeing strong demand and some M&A activity as Frontier Airlines and JetBlue Airways Corp. (JBLU) are in a bidding war for Spirit Airlines Inc. (SAVE). More importantly, the biggest carriers are being quite vocal about the rapid recovery and healthy business conditions despite inflationary pressures. The biggest challenge being voiced is the shortage of workers and pilots needed to expand the number of flight offerings... |
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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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