By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Consumer Buying Binge
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:
- The chart compares SPY with consumer discretionary ETF XLY and internet ETF FDN.
- The chart shows over the last month XLY beat FDN by 8.46%. This is a big difference resulting from the consumer buying binge.
- Expect the consumer buying binge to accelerate going into Christmas. This is positive for the stock market.
It is the first day of the month. Blind money pours into Wall Street on the first day of the month. Blind money is the money that gets invested without any analysis and irrespective of market conditions. Blind money is typically invested in the afternoon. Professionals are front running by buying ahead of the blind money so that they can sell to the blind money at higher prices.
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🔒 .
The momo crowd is🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
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 slightly 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 $1790, silver futures are at $24.04, and oil futures are $84.17.
S&P 500 futures resistance levels are 4713 and 4900: support levels are 4600, 4460, and 4318.
DJIA futures are up 103 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.
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This post was just published on ZYX Buy Change Alert.
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