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July 28th, 2024 | Issue 244 |
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This past week, the markets were on a rollercoaster, opening higher before dipping midweek and then recovering by the week's end. Investors are focused on inflation levels and the ongoing U.S. presidential election, even as upcoming Federal Reserve decisions seem predictable. In today's market, it's not just about interpreting economic indicators but also about managing our expectations. Finding the right balance between staying informed and being adaptable is key—it's a theme that applies just as much to investing as it does to life itself. After a busy trading week, I always look forward to the weekend to recharge. This summer, I've taken up pickleball—a surprisingly addictive mix of tennis, badminton, and ping-pong. It's been a great way to stay active and enjoy the warm weather. My kids have also gotten into the game, and playing together has been a fun way to spend time outdoors. These moments remind me of the importance of stepping back from the daily grind and finding balance, even when the markets are unpredictable. This balance between activity and reflection is crucial, especially when facing the unexpected. Speaking of unpredictability, a recent market event caught many investors off guard: the sell-off of Nvidia (NVDA) shares. Insiders have sold an eye-popping $796 million worth of stock in 2024 alone. This massive sell-off raises questions about Nvidia's valuation, even though the company is a leader in AI and semiconductor technology and has been a favorite among retail investors. The fact that insiders are selling suggests they might think the stock has reached or is nearing its peak valuation, causing many investors to reassess their positions in tech stocks. This reassessment speaks to the heart of investment strategy: understanding when to hold and when to recalibrate in response to new information. Nvidia's story is a microcosm of broader market dynamics. The company's remarkable growth in AI and semiconductors has fueled a meteoric rise in its stock price, attracting significant interest from retail and institutional investors alike. However, insider selling serves as a reminder of the inherent risks in assuming that growth will continue indefinitely. It highlights the need for vigilance and a deeper understanding of the factors driving stock performance. Investors are now confronted with the challenge of distinguishing between short-term fluctuations and long-term trends—a task made more complex by the rapid pace of technological advancement. The ripple effects of Nvidia's insider selling have extended beyond the company itself. Concerns about overvaluation and profit-taking have contributed to a broader market pullback, with many investors rethinking their tech-heavy portfolios. This pullback isn't happening in isolation; it's intertwined with broader market volatility driven by inflation, interest rate concerns, and global economic uncertainty. These interconnected factors underscore the importance of a comprehensive approach to portfolio management, one that considers both macroeconomic trends and individual company performance. Our AI models have been invaluable in identifying these market dynamics, helping us spot trade opportunities and assess risks effectively. By analyzing insider activity, market sentiment, and economic indicators, we can better anticipate shifts in investor behavior and make informed decisions. This is where the true value of AI shines, providing us with insights that go beyond traditional analysis. By harnessing these insights, we can navigate the complex landscape of modern markets with greater confidence and precision. As we navigate these uncertain times, it's crucial to stay adaptable and focused on data-driven insights. Whether it's on the pickleball court or in the markets, being ready to pivot and adjust our strategies will help us seize opportunities and manage risks effectively. Let's keep a close eye on developments and remain ready to take advantage of the opportunities they present. Just like in pickleball, the ability to anticipate and react quickly can make all the difference in achieving success. |
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WE ARE NOW ON THE X PLATFORM Every day, I highlight our best strategies and potential trading setups via the X platform. Check it out! Click Here>> |
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They Call it Schwab on Steroids. I'm Vlad Karpel. I built AI-powered trading software that was so successful, Charles Schwab bought it for $1 billion. Now, I've created a new AI tool to help pick stocks, even during inflation and global uncertainty.
This algorithm boasts an 85% success rate and has made impressive picks recently:
• 43% in 2 days trading Applied Materials ($AMAT)
• 55% in 7 days trading UnitedHealth Group ($UNH)
• 70% in 2 days trading Synchrony Financials ($SYF)
• 97% in 3 days trading SLV ($SLV)
I call it "Schwab on Steroids" or "Inflation Buster." Click HERE to learn more. |
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Chief Investment Officer/Founder |
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TRADE IDEA OF THE WEEK A Strategic Buy in a Tumultuous Market |
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In light of recent market conditions, the ProShares Short QQQ ETF (PSQ) is emerging as a strategic trade of the week. This ETF is designed to reflect the inverse performance of the NASDAQ-100 Index, making it a useful tool for investors looking to capitalize on declines in a sector that has been under significant pressure. |
The current trading landscape highlights several reasons why PSQ is a strong buy right now. The technology sector, a major component of the NASDAQ-100, has been facing substantial volatility. Earnings reports from key players like Tesla and Alphabet have disappointed, causing sharp declines in their stock prices and dragging the NASDAQ-100 lower. With tech stocks in correction territory and showing no immediate signs of recovery, PSQ could benefit from continued weakness in this sector. Economic indicators further support PSQ's potential as a strategic investment. The GDP report for the second quarter showed robust growth of 2.8%, but it was bolstered by increased inventories, which might mask underlying economic weaknesses. Additionally, while the PCE price index has shown a decrease in inflation, the overall economic environment remains uncertain. These conditions create a backdrop where the NASDAQ-100 could face continued pressure, making PSQ a relevant hedge. Investor sentiment is also shifting. There is a noticeable rotation into smaller stocks and away from high-growth tech names. This shift reflects concerns over overvaluation in the tech sector and suggests that PSQ, with its inverse exposure, could perform well as tech stocks face ongoing declines. The upcoming week's earnings reports from major tech companies, including Microsoft, Meta Platforms, Apple, and Amazon, are likely to be pivotal. Given the recent disappointments from Alphabet and Tesla, any negative surprises could exacerbate the pressure on the NASDAQ-100, further enhancing PSQ's appeal. Support from my A.I. models reinforces the case for PSQ. The models indicate that, given the current market conditions, PSQ is well-positioned to capitalize on expected declines in the NASDAQ-100. With a focus on mitigating risk and taking advantage of market volatility, PSQ represents a strategic opportunity for investors navigating this tumultuous period. Just take a look at the 10-day Predicted Data for PDQ: |
This week, I'll be adding ProShares Short QQQ ETF (PSQ) to my portfolio! |
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| Vlad Karpel
YellowTunnel and Tradespoon Founder |
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P.S. Click here for access to the latest Power Trading Live Strategy Roundtable Recording. |
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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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