BIDEN STOCK MARKET RALLY — FED READY TO PRINT MORE MONEY

The Chart

Please click here for a chart of S&P 500 ETF (SPY) which represents stock market benchmark index (SPX).

Note the following:

• The chart shows the big stock market rally in the morning to celebrate the potential Biden victory.
• The rally was in line with the move up earlier in futures.
• Before going further, take another look at the magnet that traders are drawn to shown in the chart here.  For details read the Morning Capsule.
• The VUD indicator is the most sensitive measure of net supply demand of stocks in real-time. The orange indicates net supply and the green indicates net demand.
• The chart shows that VUD indicator was solid orange in the morning.  This indicates that there was net supply of stocks as there were many skeptics of this stock market rally on Wall Street anointing Biden as the president and proclaiming the Senate as red while many uncertainties remain.
• In the middle of the day, there was an attempt at a market pullback.  The momo crowd bought the slight pullback aggressively.
• The chart shows that the pullback did not materialize.
• The chart shows that when the pullback did not materialize, sellers threw in the towel.
• When sellers threw in the towel, net demand for stocks increased rapidly as shown by the solid green VUD indicator.
• The chart shows the Fed statement at 2:00 pm ET.
• The Fed held to its existing policy and changed seven words in its statement.  This change does not seem to have much significance.
• During its press conference, Powell indicated that the Fed is ready to do more.
• The chart shows a move up in the market on the prospect of more money printing.
• The chart shows that when the up move did not cause a breakout, the VUD indicator again turned orange as sellers came back.
• Typically the foregoing behavior of the VUD indicator takes place near the end of a move at least in the very, very short term. Please do not confuse ‘typically’ with always.

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.

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.

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Nibbling

🔒

Close

There appear to be buy on close orders.

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.