BLIND FAITH FEVER SPREADS – MONEY MOVING INTO HIGHLY RISKY MOMO STOCKS

By Nigam Arora & Dr. Natasha Arora

 

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

Blind Faith

Please click here for a chart of Nasdaq 100 ETF (QQQ).

Note the following:

  • Blind faith in the Fed is spreading.
  • Investors en masse see no need to control risk because they have blind faith that the Fed has their backs.
  • Since investors are believing that there is no need to control risk anymore, they are aggressively selling relatively safe stocks such as economy opening stock because these stocks have lower potential rewards compared to highly risky speculative momo stocks.
  • Investors have totally twisted the Fed’s statement and Powell’s news conference into an imagined scenario to justify taking higher risks and exiting safer investments.
  • The foregoing behavior is similar to the meme crowd behavior.  Pumpers in the meme crowd come up with a highly flawed but attractive story for some stocks and then the rest of the meme crowd copies their trades.  Meme crowd trades are limited to certain stocks.  However, the momo crowd is now spreading the same behavior to the entire market.
  • In our view, this is a very dangerous development.  Let us see if it continues after quadruple witching is over.  If it continues, the plan is to take more protective measures.
  • 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 VUD indicator is mixed in QQQ but it does not tell the whole story because QQQ has many solid companies.
  • The VUD indicators for ETFs representing Dow Jones Industrial Average (DJIA)  and S&P 500 (SPX) are mostly orange.

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 🔒l 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

🔒

Nibbling

🔒

Close

There appear to be **** 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.

This post was previously published  in The Arora Report  paid services.

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Nigam Arora

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

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.

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