By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
The End Game
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- In the middle of the fog of war, The Arora Report postulated that the most likely end game in Ukraine was the following:
- Ukraine does not join NATO.
- Russia gets as many additional concessions as possible.
- Putin gets an off ramp to declare victory.
- Please listen to the in-depth podcast for details.
- The news is that Russia is proposing a compromise – Ukraine agrees to not join NATO.
- We previously provided you with five scenarios along with probabilities.
- The highest probability scenario that an off ramp is found now has a probability of 85%.
- The chart shows that the stock market is gapping up well within the support/resistance zone.
- The market would have likely been up 1000 DJIA points on this news if it was not for the nervousness about the Fed decision.
- The Fed will announce its decision at 2pm ET.
- Powell’s press conference is at 2:30pm ET.
- Futures were ripping this morning, but as of this writing, they are pulling back on the rumor that Powell will talk about a 50 basis point rise in the future.
- If the interest rate rise is only 25 basis points and Powell’s comments are dovish, expect a rip roaring rally. On the flip side, if Powell’s comments are hawkish, depending on the level of hawkishness, a stock market drop to the lower support zone shown on the chart will be likely.
- There will be rumors throughout the day prior to the Fed announcement, but the fact is that nobody really knows at this time.
Hong Kong Stocks Surge 9.1% In One Day
Stocks in Hong Kong are surging 9.1% in one day – the biggest one day gain since 2008.
Shanghai composite is up 3.5%.
The trigger for the big move is the financial stability and development committee of the State Council said that it would take actions to boost the economy.
Retail Sales
The U.S. economy is 70% consumer based. Therefore, it is important for investors to pay attention to retail sales.
Retail Sales came at 0.3% vs. 0.4% consensus.
Retail Sales ex Autos came at 0.2% vs. 0.8% consensus. This is a weak number and raises the specter of stagflation.
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 🔒 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
Bitcoin is seeing 🔒 on positive Russia Ukraine news. The test for bitcoin will be how it reacts to the Fed decision.
Markets
Our very, very short-term early stock market indicator is 🔒 but will change quickly based on what the Fed says. 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 $1920, silver futures are at $25.12, and oil futures are $98.43.
S&P 500 futures resistance levels are 4318, 4400 and 4460: support levels are 4200, 4000 and 3950.
DJIA futures are up 298 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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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.
