By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Tail Risk
Please click here for a chart of Taiwan ETF (EWT).
Note the following:
- Ahead of Pelosi’s visit to Taiwan, Chinese jets have flown close to Taiwan. Pelosi will be on a military plane escorted by US fighter jets.
- China has threatened to shoot down Pelosi’s plane and take other military actions.
- In The Arora Report analysis, there is a medium risk of confrontation, but there is a low risk of escalation. The reason is that there is no significant increase in Chinese navy build up near Taiwan.
- The chart shows that the stock market in Taiwan has had only a slight pullback on tensions with China even after a strong recent rally. Since Taiwan is the epicenter of a potential conflict, only a slight pullback in Taiwanese market indicates that investors in Taiwan do not expect a conflict with China in the near term.
- The chart shows that The Arora Report rating on Taiwan has been mild sell.
- The chart shows the Arora buy zone has been nearby. The inference here is that a dip in the buy zone is likely to be a buying opportunity and the Arora rating may change from mild sell to mild buy. Of course, the situation can change very quickly. Therefore, before buying it is important to stay tuned to ZYX Emerging. ZYX Emerging has covered Taiwan for 15 years.
- Even though the risk of escalation is low, investors should be mindful of the tail risk to the stock market in general.
- This morning, after incessant buying over the last month, the momo crowd is selling stocks on the Taiwan risk.
- Money is also moving out of stocks into the safety of Treasury bonds on Taiwan risk.
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 🔒 stocks in the early trade.
Gold
On Taiwan risk, money is moving into gold.
Gold has broken above the psychological resistance of $1,800.
The momo crowd is 🔒 gold in the early trade on the Taiwan risk. 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
Bitcoin is seeing some selling along with speculative stocks.
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 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 $1804, silver futures are at $20.44, and oil futures are $94.31.
S&P 500 futures resistance levels are 4200, 4318 and 4400: support levels are 4000, 3950 and 3860.
DJIA futures are down 176 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 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 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.
