FED PIVOTS — THREE RATE RISES IN 2022

Fed Pivots

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

Note the following:

• The Fed has pivoted to control inflation.  Here are the key points:
  • The Fed has doubled the size of taper as expected.
  • At the new rate of taper, money printing should stop by mid-March.
  • The Fed is signaling three rate rises in 2022.
• The most important data point going forward is the terminal rate.  The Fed is silent on this subject.  Due to the importance of the terminal rate, we will start addressing it in Morning Capsules as appropriate.  For those wanting more detailed information on terminal rate, we are also starting work on a podcast.
• On December 13th, in the Morning Capsule, we shared with you that momo gurus had a new narrative to accomplish their goal of persuading their followers to keep on buying as the gurus’ livelihoods depend on the momo crowd continuing to buy.   Here was part of the new narrative.

The Fed’s decision on Wednesday will be a clearing event and that is the main reason to buy stocks now.

• The chart shows when the Fed decision was announced.
• The chart shows aggressive buying by the momo crowd leading to the Fed decision and afterward.
• 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 was green leading to and after the Fed decision.  This indicates strong net demand for stocks after the Fed decision and almost complete control of the stock market by the momo crowd.

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.

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.

🔒

Nibbling

🔒

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.

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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.