By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Arora Buy Signal
Please click here for a chart of Nasdaq 100 ETF (QQQ).
Note the following:
- The chart shows when the Arora buy signal was given to deploy cash and reduce hedges.
- The chart shows that there is a 13.73% gain since the Arora buy signal 13 days ago.
- There are only 13 parallels with this rally pattern in the last 50 years.
- The chart shows that QQQ is comfortably above the support zone.
- The chart shows that QQQ is still below the resistance zone even after this strong rally.
- The chart shows that RSI is overbought and turning over.
- The chart shows that volume continues to be high.
- There may be buying related to rebalancing going into the end of the quarter.
- Blind money will also flow into the market on April 1 and April 4.
- April tends to be a seasonally strong month.
- The mother of all numbers, the jobs report, will be released on Friday at 8:30am ET.
- The market is positioned for a strong jobs report. For the next level information in positioning, please listen to the podcast “Market Mechanics: Positioning.”
- If the jobs report is stronger than expectations, in theory there will be a sell off as it will increase the probability of a 50 basis point interest rate increase.
- If the jobs report is very weak, the market may interpret this as an incentive for the Fed to be less hawkish. In such an event, expect a rip roaring rally in stocks, bonds, and gold.
- Considering the extent of the move since the Arora buy signal, it is prudent to increase short term hedges by 2% between now and Friday. Please see the Protection Bands And What To Do Now section below.
- Hedges have become inexpensive now. It is prudent to buy hedges when they are inexpensive.
ADP Data
ADP is the largest private payroll processor in the country. It uses data to give a glimpse of the employment picture in advance of the official jobs report.
ADP came at 455K vs. 440K consensus.
GDP
Q4 GDP – Third Estimate came at 6.9% vs. 7.1% consensus.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is 🔒 stocks in the early trade.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Microstrategy (MSTR) has borrowed $205M to buy more bitcoins. The loan is a three year term loan from Silver Gate Bank, and it is collateralized by $820M of bitcoins.
Markets
Our very, very short-term early stock market indicator is 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking up, and bonds are ticking down.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $1928, silver futures are at $25.05, and oil futures are $106.95.
S&P 500 futures resistance levels are 4713, 4770 and 4826: support levels are 4600, 4460 and 4400.
DJIA futures are down 95 points.
Protection Bands And What To Do Now?
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding 🔒 in cash or treasury bills or short-term bond funds or allocated to short-term tactical trades, and short to medium-term hedges of 🔒, and short term hedges of 🔒. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
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This post was just published on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
