By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Consumer Price Index
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:
- CPI data is giving ammunition to both bulls and bears. Here are the details:
- Headline CPI came at -0.1% month-over-month vs. 0.0% consensus.
- Core CPI came at 0.3% month-over-month vs. 0.3% consensus.
- Stock market bulls are encouraged because for the first time in a while, the headline CPI is a negative number.
- Stock market bears are encouraged because core service inflation is not coming down.
- Philly Fed President Harker is out saying that a 25 basis point rise in Fed funds at the next meeting is appropriate.
- There is more Fed speak ahead including St. Louis Fed’s Bullard and Richmond Fed’s Barkin.
- Biden will speak about inflation at 10am ET. It goes without saying that Biden will paint a positive picture of the economy and progress on inflation. Momo crowd buying may become aggressive on Biden’s speech.
- Investors need to keep in mind that there has already been a significant rally in anticipation of softer CPI.
- What happens next will depend on if a short squeeze starts. If a short squeeze starts, expect further a rally in the stock market. If a short squeeze does not start, expect a pullback in the stock market.
- In The Arora Report analysis, bringing inflation down to about 4% is relatively easy based on the Fed’s actions. However, the Fed’s target is 2%. Bringing inflation down from 4% to 2% is likely to be much more difficult.
Initial jobless claims came at 205K vs. 210K consensus. This indicates that the jobs picture is staying very strong.
The earnings floodgate will open tomorrow with bank earnings. Banks scheduled to report earnings tomorrow include BAC, C, JPM, and WFC.
Softer Semiconductor Demand
TSM is the largest contract semiconductor manufacturer in the world. Many semiconductors in Apple’s iPhones are manufactured by TSM. For this reason, it is important to pay attention to what TSM says about semiconductor demand. TSM expects softer semiconductor demand due to a slowing economy. TSM expects first quarter revenue to drop by 5%.
Alphabet’s health science unit Verily Life Sciences has laid off about 15% of its workforce. This indicates that layoffs are beginning to spread to healthtech.
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 futures briefly crossed above $1900 but are pulling back as of this writing.
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.
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see oil ratings.
Bitcoin is above $18,000. It appears that whales are manipulating bitcoin higher to suck in retail investors.
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 $1893, silver futures are at $24.15, and oil futures are at $78.85.
S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 3950, 3860, and 3770.
DJIA futures are up 68 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 good, very long term, 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.