By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Revised CPI
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:
- The chart shows the revised CPI data brought in buyers to the stock market.
- The chart shows that volume continues to be low. This indicates that so far there is lack of conviction in the move. However, this can change very quickly.
- The stock market has been eagerly waiting for CPI revisions as there have been times in the past when such revisions caused major moves in the stock market.
- A year ago, when inflation appeared to be coming down, revisions completely changed the picture.
- As of this writing, the complete data is not yet available. Here are the details known so far:
- Q4 Core CPI is unchanged at 3.3% annualized.
- December CPI revised to 0.2% from 0.3%.
- December Core CPI is unchanged at 0.3%.
- Bond yields are slightly lower after the CPI revisions.
- The sum total of the revision data so far is positive for the stock market.
- As more data becomes available, it may move the stock market. CPI for January will be released next Tuesday at 8:30am ET.
- Adding to the AI frenzy is the news that OpenAI CEO Sam Altman wants to raise $5T – $7T for manufacturing AI chips. He appears to be trying to raise the money from oil rich nations.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), Nvidia (NVDA), Microsoft (MSFT), and Tesla (TSLA).
In the early trade, money flows are mixed in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
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 *** in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
OPEC+ oil production declined by 340,000 barrels per day according to a survey. This caused a big move. Also, hopes of a ceasefire between Hamas and Israel have diminished.
Yesterday saw a big move up in oil. Today, there is a slight pullback.
The momo crowd is *** oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
There are hopes that bitcoin whales will take advantage of the low liquidity over the weekend to drive bitcoin to $50,000. As a result, bitcoin is seeing aggressive buying.
Sentiment in bitcoin is very positive.
Bitcoin miners are being aggressively bought.
Markets
Our very, very short-term early stock market indicator is ***. Also remember, today is Friday. Short squeezes tend to take place on Fridays. 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 down, and bonds are ticking up.
The dollar is range bound.
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 $2044, silver futures are at $22.66, and oil futures are at $76.14.
S&P 500 futures are trading at 5034 as of this writing. S&P 500 futures resistance levels are 5210, 5400, and 5500: support levels are 5020, 4918, and 4852.
DJIA futures are up 27 points.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash or Treasury bills 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.
Traditional 60/40 Portfolio
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
To take a free 30-day trial to paid services to gain access to more opportunities, please click here.
This post was just published on ZYX Buy Change Alert.
Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE
TRIAL TO PAID SERVICES.
Please click here to take advantage of a FREE 30 day trial.
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.
