By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know now.
13 Yield Curves Invert
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:
- Please start by reading the Morning Capsule regarding the jobs report.
- The reaction of the bond market to the jobs report is a critical data point for investors.
- In the wake of a strong jobs report, 13 yield curves have inverted.
- Most notable is that the yield on 30-Year Treasury is 2.446%, and the yield on 3-Year Treasury is 2.623%. A simple way to look at this is that investors want less yield for lending money to the U.S. government for 30 years than they want for lending money to the U.S. government for three years. You do not need to be a genius to know that there is more risk in lending for 30 years vs. lending for three years. Some prescient investors may be able to accurately see scenarios three years from now, but who can clearly see scenarios 30 years from now?
- The foregoing tells us that investors believe inflation will settle down in about three years. Then the Fed will be back to its shenanigans of low rates and potentially printing money again.
- Investors, if you are interested in learning the reason behind the above aberrant behavior, listen to the in-depth podcast “The Dirty Secret of the President and the Fed Chair.”
- The chart shows when the jobs report was released.
- The chart shows selling in stocks after the jobs report.
- In the Morning Capsule we shared with you:
On the first two days of the quarter, blind money flows into Wall Street. Blind money is the money that comes into Wall Street at the beginning of each month and each quarter without any analysis irrespective of market conditions. Most of this money is invested in the afternoon.
- The chart shows that blind money buying is lifting the stock market in the afternoon.
- 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 has been mostly orange but has turned green on blind money buying.
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
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.
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
🔒
Nibbling
🔒
This post was published yesterday in The Arora Report paid services. Since then the Morning Capsule has had an update in the paid services.
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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.
