SPOT ON ARORA CALL – THE KEY TO THE MARKET BREAKS DOWN LEADING STOCKS LOWER

To gain an edge, this is what you need to know now.

Market Key Breaks Down

Please click here for a chart of Apple (AAPL)

Note the following:

• The capsules are about the big picture and not about individual stocks.  In yesterday’s Morning Capsule and today’s Morning Capsule, we discussed AAPL stock to make the bigger point.  In yesterday’s Morning Capsule we wrote,

The Apple news triggered a set up for a 5% – 10% drop in the stock market.

• Yesterday’s Morning Capsule headline read “MORNING CAPSULE: UNPRECEDENTED BANK OF ENGLAND INTERVENTION RESCUES MOMO CROWD AFTER APPLE RUINS THE RALLY.”
• The headline of today’s Morning Capsule read “MORNING CAPSULE: CROSS CURRENTS AHEAD OF PCE AT MONTH END – APPLE STOCK BECOMES THE KEY TO THE MARKET.”
• We also wrote in the Morning Capsule,

The chart shows that AAPL stock is making a lower low.  This has negative implications.

•  The chart shows that today AAPL stock has broken down.
• The breakdown in AAPL stock, the key to the market at this time, has led the entire stock market lower.
• S&P 500 has made a new bear market low.
• The VUD indicator is the most sensitive measure of net supply demand in real-time. The orange represents net supply and the green represents net demand.
• The chart shows that the VUD indicator is mostly orange, indicating net supply of AAPL stock.
• Investors who are using AAPL stock as a money market fund alternative to park cash are getting burned.
  • We previously wrote that a change in the behavior of such investors is necessary to reach capitulation.
  • A capitulation will provide a great buying opportunity.   
  • Here is the key question for prudent investors: Will today’s breakdown in AAPL change such investors’ behavior or will they double up on quantity and run up AAPL stock again?
• All eyes are on PCE.  Please see the Morning Capsule for details.
• The sum total of the foregoing is summed up as action items in the “Buy Zones And Buy Now Ratings” section below and in the “Protection Bands And What To Do Now” section in the Morning Capsule.
  • To be consistently successful in the markets, it is important to remember that a deliberate decision to not buy is an important decision.

Money Flows

The momo crowd money flows since the Morning Capsule are 🔒 (To see the locked content, please take a 30 day free trial).

Smart money flows since the Morning Capsule are 🔒.

Short squeeze money flows are 🔒.

A Special Note To New Subscribers

Note the smart money behavior.  Smart money tends to sell into strength on strong up days.

New subscribers should consider adopting smart money’s way of investing and trading.

Sentiment

Sentiment is 🔒.

Sentiment is a contrary indicator at extremes.  In plain English, this means that when sentiment becomes extremely positive it is time to sell and when sentiment becomes extremely negative it is time to buy.

Close

Orders on close are indeterminable at this time.

There is merit to watching the pattern of market on close orders as they represent the day’s dominant net cumulative activity by many professionals and funds.

Gold

The momo crowd money flows in gold are 🔒 since the Morning Capsule.

Smart money flows are 🔒 in gold since the Morning Capsule.

Oil

The momo crowd money flows in oil are 🔒 since the Morning Capsule.

Smart money flows in oil are 🔒 since the Morning Capsule.

Buy Zones And Buy Now Ratings

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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.