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

Jobs Report

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:

• Stock futures were running up ahead of the jobs report on buying by the momo crowd. The momo crowd was hoping for a weak jobs report.
• The jobs report came mixed, causing stock futures to pull back from their highs.
• Here are the details of the jobs report.
  • Non-farm payrolls came at 431K vs. 475K consensus.
  • Non-farm private payrolls came at 426K vs. 450K consensus.
  • Average work week came at 34.6 vs. 34.7 consensus.
  • Average hourly earnings came at 0.4% vs. 0.4% consensus.
  • Unemployment rate came at 3.6% vs. 3.7% consensus.
• In our analysis, this jobs report is not going to change the Fed’s trajectory.  
• 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.  Market professionals know this and they front run.
• The chart shows that the stock market is in no man’s land in between the resistance zone and the support zone.
• RSI shows that the market can go either way.

Eurozone Inflation

The Eurozone hit a recent record by coming at 7.5% on an annual basis.

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

There is disappointment in the gold market that the jobs report was not weak.

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

Oil is falling below the psychological support of $100. The momo crowd 🔒 yesterday on the SPR release news, initially causing a major rally. Smart money 🔒 the rally, driving oil lower.

The momo crowd is 🔒 oil in the early trade. Smart money is 🔒 oil in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin is consolidating recent gains. The potential new buying by Terra is keeping any heavy selling at bay. Terra is buying bitcoins to hold as a reserve for Terra stable coin UST.  The reserve will help Terra handle the supply contraction of UST.  Terra is aiming to be the largest single-wallet holder of bitcoin.

Markets

Our very, very short-term early stock market indicator is 🔒 but precarious depending upon the move in bonds. 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 stronger.

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 $1929, silver futures are at $24.67, and oil futures are $99.21.

S&P 500 futures resistance levels are 4600, 4713 and 4770: support levels are 4460, 4400 and 4318.

DJIA futures are up 117 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.

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

The Largest Ever Oil Release

Please click here for a chart of oil futures

Note the following:

• Biden is set to announce the largest ever oil release from SPR (Strategic Petroleum Reserve).
• The chart shows when the word leaked out about the potential oil release.
• 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 chart shows that there is net supply in oil futures.
• Biden plans to release up to 180M barrels over six months. This is the largest ever release.
• Estimates are that the impact of sanctions is a loss of about 3M bpd of Russian oil.
• India and China are more than happy to buy Russian oil at a deep discount in spite of the sanctions.
• After India and China buying, the loss of Russian oil may be only about 2M bpd barrels.
• The SPR release will amount to about 1M bpd.
• OPEC+ has just agreed to increase its output by 432K bpd.
• As a full disclosure, ZYX Short took a short position in oil and in an oil stock DVN ahead of the SPR release leak.
• The chart shows that even after the news, WTI oil is staying above $100. This indicates that the oil bulls think that the largest ever release may not have a significant impact as the demand for oil continues to surge.
• If the yield curve is right, demand for oil may not surge as much as the market anticipates.
• Smart money looks at all sides of an issue such as oil and prepares for several high probability scenarios. In contrast, the momo crowd starts with the prevailing belief that oil is going up and looks only at arguments that support their belief while ignoring arguments against their belief. Expect the momo crowd to aggressively buy this dip.  
• The sum total of the foregoing and all of the other inputs in ten categories to the ZYX Asset Allocation Model is captured in the Protection Bands And What To Do Now section below in an actionable form.   
• There are significant cross currents in the stock market today due to the quarter end.

Jobless Claims

Initial claims came at 202K vs. 200K consensus.

Personal Spending

Personal spending came at 0.2% vs. 0.5% consensus.

PCE Prices

PCE prices came at 0.6% vs. 0.6% consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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

Terra is in the process of buying up to $10B of bitcoins. It has already bought $1.47B of bitcoins. In view of Terra buying plans, selling in bitcoin has totally dried up.

Markets

Our very, very short-term early stock market indicator is 🔒 due to quarter end cross currents. 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 stronger.

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 $1941, silver futures are at $25.18, and oil futures are $103.42.

S&P 500 futures resistance levels are 4713, 4770 and 4826: support levels are 4460, 4400 and 4318.

DJIA futures are down 55 points.

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

Arora Buy Signal

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

Note the following:

• The chart shows when the Arora buy signal was given to deploy cash and  reduce  hedges.
• The chart shows that there is a 13.73% gain since the Arora buy signal 13 days ago.
• There are only 13 parallels with this rally pattern in the last 50 years.
• The chart shows that QQQ is comfortably above the support zone.
• The chart shows that QQQ is still below the resistance zone even after this strong rally.
• The chart shows that RSI is overbought and turning over.
• The chart shows that volume continues to be high.
• There may be buying related to rebalancing going into the end of the quarter.
• Blind money will also flow into the market on April 1 and April 4.
• April tends to be a seasonally strong month.
• The mother of all numbers, the jobs report, will be released on Friday at 8:30am ET.
• The market is positioned for a strong jobs report. For the next level information in positioning, please listen to the podcast “Market Mechanics: Positioning.”
  • If the jobs report is stronger than expectations, in theory there will be a sell off as it will increase the probability of a 50 basis point interest rate increase.
  • If the jobs report is very weak, the market may interpret this as an incentive for the Fed to be less hawkish. In such an event, expect a rip roaring rally in stocks, bonds, and gold.
• Considering the extent of the move since the Arora buy signal, it is prudent to increase short term hedges by 2% between now and Friday.  Please see the Protection Bands And What To Do Now section below.
• Hedges have become inexpensive now. It is prudent to buy hedges when they are inexpensive.

ADP Data

ADP is the largest private payroll processor in the country. It uses data to give a glimpse of the employment picture in advance of the official jobs report.

ADP came at 455K vs. 440K consensus.

GDP

Q4 GDP – Third Estimate came at 6.9% vs. 7.1% consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 stocks in the early trade. Smart money is 🔒 stocks 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

MicroStrategy (MSTR) has borrowed $205M to buy more bitcoins. The loan is a three year term loan from Silver Gate Bank, and it is collateralized by $820M of bitcoins.

Markets

Our very, very short-term early stock market indicator is 🔒. 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 $1928, silver futures are at $25.05, and oil futures are $106.95.

S&P 500 futures resistance levels are 4713, 4770 and 4826: support levels are 4600, 4460 and 4400.

DJIA futures are down 95 points.

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

Hard Landing And Big Market Moves

Please click here for a chart of the yield curve.

Note the following:

• The chart shows that the yield curve is close to inversion.
• The yield curve is the gold standard for predicting recessions.
• Opinions are a dime a dozen.  We have always encouraged you to pay more attention to the hard data and less attention to opinions.  There are exceptions – when Bill Dudley speaks, you should listen.  Bill Dudley is the former president of the New York Fed and an extremely intelligent person.  Bill Dudley says a “hard landing is inevitable.”  He explains that this is due to the Fed falling behind the curve.
• At this time, the yield curve is the most important indicator for long term investors.  For this reason, we have been highlighting the yield curve and explaining its various aspects in the capsules and will continue to do so.  For those interested in next level information, the podcast titled “Yield Curve: Flaws in 100% Accurate Indicator” is now live.
• There is progress in peace talks between Russia and Ukraine in the Istanbul meeting.
  • Russia says it will  reduce  military activity in Kyiv and Chernihiv.
  • Ukrainian sources are confirming that the foregoing is actually happening on the ground.
• Both Russia and Ukraine are inching towards a framework.  Interestingly, the framework that they are inching towards is exactly the highest probability scenario we described in the Morning Capsule dated March 7.
• Major moves are happening in several markets such as wheat, oil, steel, nickel, aluminum, and palladium.  These moves are following the path we previously outlined in the in-depth podcast “The End Game in Ukraine.”  We are receiving a large number of emails this morning from subscribers to ZYX Buy about these market moves.  A trade on inverse oil ETF SCO was given in ZYX Buy this morning.  Most of these trades are in ZYX Short.  So far, most of the trades in ZYX Short based on Russia have been highly profitable.

Home Price Index

S&P Case-Shiller Home Price Index came at 19.1% vs. 18.7% consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 stocks in the early trade.  Smart money is 🔒 in the early trade.

Gold

Gold is experiencing 🔒 on peace talks.

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

Oil is experiencing 🔒 on peace talks.

The momo crowd is 🔒 in the early trade.  Smart money is 🔒 in the early trade.

For longer-term, please see oil ratings.

Bitcoin

There is buying in bitcoin on peace talks.  Bitcoin is a risk asset, not a hedge.  Peace talks mean a ‘risk on’ environment.

Markets

Our very, very short-term early stock market indicator is 🔒.  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 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 $1898, silver futures are at $24.41, and oil futures are $101.26.

S&P 500 futures resistance levels are 4713, 4770 and 4826: support levels are 4460, 4400 and 4318.

DJIA futures are up 275 points.

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

Highly Flawed

Please click here for a chart of two yield curves.

Note the following:

• The yield curve is one of the most important indicators for investors at this time. 
• Please start out by reading the Morning Capsule dated March 23.
• The chart compares 10-Year Constant Maturity Treasury minus 2-Year Constant Maturity Treasury to 10-Year Constant Maturity Treasury minus 3-Month Constant Maturity Treasury.
• The chart shows that the former is in a downtrend but the latter is in an uptrend.
• Please click here for a chart going back to 1976 of the difference between the yield on 10-year Treasury and 2-year Treasury.  This is the standard yield curve.
  • The chart shows that this yield curve is close to inversion.
  • The chart shows that this yield curve has been 100% accurate in predicting recessions.
• We have previously mentioned that Wall Street’s new favorite yield curve is the difference between 10-year Treasury and 3-month Treasury – the red line on the chart.
• The reason for the new favorite is that this does not indicate any recession ahead, and this helps Wall Street make a bullish case.
• The fact, not an opinion, is that the 10-year minus 3-month curve is highly flawed.
  • The 3-month Treasury yield is directly tied to the Fed’s funds rate.
  • The Fed’s funds rate was 0.00 – 0.25% until March 16.
  • On March 16, the Fed raised it to 0.25 – 0.5%.
  • The Fed has told us that they are planning on seven rate increases this year.
  • In our analysis at The Arora Report, the terminal Fed funds rate is 3 – 3.25%.
  • As the Fed funds rate rises, the yield curve of 10-year minus 3-month will fall.
  • Without the foregoing adjustment, looking at the yield curve of 10-year minus 3-month and drawing a bullish conclusion is highly flawed.
• The yield curve between 30-year Treasuries and 5-year Treasuries has inverted for the first time since 2006. Remember that it was followed by the 2008 stock market crash.
• There is a lot of confusion about the yield curve and its importance to your investments.  So far, no one in the media is telling the correct story.  No wonder we have been getting a lot of emails requesting a podcast on the yield curve and its impact.  We appreciate all of your very intelligent questions.  In response to your requests, we are working on an in-depth podcast titled “Yield Curve: Flaws in 100% Accurate Indicator.”

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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 🔒 oil in the early trade.

For longer-term, please see oil ratings.

Bitcoin

On March 22, we wrote

Bitcoin is forming a triangle formation. A break to the upside above $43,500 has the potential for a substantial rally.

So far, that call has worked.  Bitcoin is trading at $47,185 as of this writing.

Bitcoin has erased its losses for the year.

Markets

Our very, very short-term early stock market indicator is 🔒.  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 and bonds are range bound.

The dollar is stronger.

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 $1939, silver futures are at $25.24, and oil futures are $107.80.

S&P 500 futures resistance levels are 4600, 4713 and 4770: support levels are 4460, 4400 and 4318.

DJIA futures are down 32 points.