Twin Cautions
Please click here for a chart of Gevo (GEVO).
Note the following:
- Prudent investors should observe two cautions.
- The momo crowd is aggressively buying as they are excited about Biden using executive orders to undo a large part of Trump’s legacy.
- The momo crowd has a short memory. Not long ago, the momo crowd was buying aggressively on Trump’s every word. The momo loved Trump. Now the momo loves Biden.
- Do you see the dichotomy? The momo crowd, the gurus and the media do not see one.
- It is important to focus on the real reasons behind the bubble getting bigger — excessive money printing and excessive borrowing.
- The Morning Capsule is about giving you the big picture. The chart of GEVO is not about GEVO but to illustrate the second caution.
- GEVO is a biofuel company with a fair value of less than $1.
- The chart shows that the stock was pumped using a misleading claim that Bill Gates was investing.
- The chart shows with the rectangle on the left-hand side the pump. The pump ran the stock up to over $11.60.
- The chart shows with a rectangle the zone where the sheep were sucked in at the top.
- The company took advantage of the pump to announce a direct offering.
- The direct offering was conducted at $8 — a steep discount to the market price of over $11.
- The pumpers kept the sheep from selling by spreading the falsehood to the sheep that the news was wrong and it was about an old shelf and no stock was being sold.
- The chart shows with a rectangle the lie.
- The chart shows with a rectangle the dump.
- The same pattern was followed with the lithium company LAC and the biotech BNGO. All of that and more in just one day.
- As tempting as it is for investors to experience FOMO (fear of missing out), it is better to have self-discipline.
- 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 tells the real story.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial) stock in the early trade. Smart money is 🔒.
Gold
The momo crowd is s🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
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 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 $1849, silver futures are at $25.43, and oil futures are $53.71.
S&P 500 futures resistance levels are 3860 and 4000: support levels are 3800, 3630 and 3600.
DJIA futures are up 109 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, on dips, 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, 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.
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