$PSQ: Hot inflation to sink stocks further

see the trade of the week inside... You receive this email, because you signed up to get email from YellowTunnel newsletter on 08/07/23.  If you no longer wish to receive any emails from YellowTunnel, please use the "Unsubscribe" link towards the bottom of this email. [Image] February 18h, 2024 | Issue 222   Hello Greetings, YellowTunnel Community!  In this week’s Power Trading Market newsletter, we’ll be dissecting the latest key inflation data, the tail end of earnings seasons, and a captivating event that unfolded during Lyft's recent earnings announcement – a roller coaster ride fueled by a fascinating phenomenon called a gamma squeeze.  Lyft, the ride-hailing giant, unveils its earnings report. But here's the twist – a typographical error in the press release mistakenly inflates the reported margins by a whopping 450 basis points. Instead of the expected 50 basis points, the figure erroneously reads as 500. The market reacts with lightning speed. Lyft's stock catapults an astonishing 60% in after-hours trading, coming to an abrupt halt at the $20 mark. As the $20 strike price had a very large open interest before the earnings announcement, it is easy to see why exactly the rally stopped where it did. [My proprietary A.I. algorithmic trading system has an 84.85% win rate as of today>>]( Now, let's delve into the intricacies of a gamma squeeze. This phenomenon occurs when heavy trading activity in options contracts, particularly call options, compels market makers to adjust their hedging positions. Essentially, as demand for options surges, market makers must buy or sell the underlying stock to offset their exposure. This process amplifies price movements, leading to what we call a gamma squeeze. In the case of Lyft, the surge in call buying before earnings created the perfect breeding ground for a gamma squeeze. But why is this significant? Well, let's break it down further. When investors rush to buy call options, open interest – the total number of outstanding options contracts – spikes. This surge in open interest signals heightened bullish sentiment. However, it also puts market makers in a precarious position. Should the stock price move against them, they may be forced to rapidly adjust their positions, exacerbating price swings.  So, what's the key takeaway from all this? It underscores the importance of monitoring options market activity, particularly ahead of major events like earnings releases. By analyzing trends in options trading, investors can gain valuable insights into market sentiment and anticipate potential price movements.  As always, stay tuned for more insightful analysis and updates in the dynamic world of finance. Happy investing! If you like this blog, share it with your friends, frenemies, and perfect strangers.  ([they can subscribe here](   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>>Â]( (Advertisement) MY CRASH-PROOF ALGORITHM IS FLASHING BIG A.I. BUY SIGNALS, BUT TIMING IS OF THE ESSENCE! My proprietary A.I. algorithmic trading system has an 84.85% win rate as of today... Dear Subscriber,  The disruption and impact of AI will affect just about every white-collar job.  Some companies will soar, while others will flop.  Certain Magnificent 7 stocks, such as Apple, Meta, Microsoft, and Nvidia…appear to be leaders in the A.I. arena, but can they continue to generate the same huge returns as in previous years?  There’s a new breed of A.I. companies we’re reviewing, such as Snowflake, Datadog…Marvell (not Marvel, although it may become a trader's superhero).   Can they capture the next stock wave? [Click here to find out more >>]( Vlad Karpel Chief Investment Officer/Founder (A portion of Yellow Tunnel sales will go to directly help the Ukrainian people)   TRADE IDEA OF THE WEEK $PSQ: Hot Inflation to Sink Stocks Further In light of the current market conditions, the ProShares Short QQQ ETF ($PSQ) emerges as a compelling trade opportunity. As inflationary pressures continue to weigh on investor sentiment and economic outlook, stocks are poised for further declines. The ProShares Short QQQ ETF offers a strategic hedge against these downside risks, providing investors with inverse exposure to the Nasdaq-100 Index. Amidst concerns about rising interest rates and tightening monetary policy, technology stocks, which dominate the Nasdaq-100 Index, are particularly vulnerable to market corrections. By purchasing $PSQ, investors can capitalize on potential declines in technology stocks, thus safeguarding their portfolios against market downturns. What’s even better is that my A.I. strongly agrees! Just take a look at the 10-day predicted data for PSQ: Looking ahead, the upcoming week presents an opportune time to initiate positions in $PSQ. With the economic landscape characterized by heightened volatility and inflationary pressures, adding inverse ETFs like $PSQ to your portfolio can provide valuable protection against downside risks. Leveraging the insights from the current market conditions and the latest artificial intelligence (A.I.) data, buying $PSQ in the upcoming week could prove to be a prudent move for investors seeking to navigate turbulent market conditions with confidence.  This week, I’ll be adding ProShares Short QQQ ETF (PSQ) to my portfolio! [Click here to read more about this week’s Power Trade pick…]( [Image] To great returns, [Image] Vlad Karpel YellowTunnel and Tradespoon Founder P.S. [Click here]( for access to the Power Trading Live Strategy Roundtable  Recorded every Thursday. 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. 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