By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Hard Landing And Big Market Moves
Please click here for a chart of the yield curve.
Note the following:
- The chart shows that the yield curve is close to inversion.
- The yield curve is the gold standard for predicting recessions.
- Opinions are a dime a dozen. We have always encouraged you to pay more attention to the hard data and less attention to opinions. There are exceptions – when Bill Dudley speaks, you should listen. Bill Dudley is the former president of the New York Fed and an extremely intelligent person. Bill Dudley says a “hard landing is inevitable.” He explains that this is due to the Fed falling behind the curve.
- At this time, the yield curve is the most important indicator for long term investors. For this reason, we have been highlighting the yield curve and explaining its various aspects in the capsules and will continue to do so. For those interested in next level information, the podcast titled “Yield Curve: Flaws in 100% Accurate Indicator” is now live.
- There is progress in peace talks between Russia and Ukraine in the Istanbul meeting.
- Russia says it will reduce military activity in Kyiv and Chernihiv.
- Ukrainian sources are confirming that the foregoing is actually happening on the ground.
- Both Russia and Ukraine are inching towards a framework. Interestingly, the framework that they are inching towards is exactly the highest probability scenario we described in the Morning Capsule dated March 7.
- Major moves are happening in several markets such as wheat, oil, steel, nickel, aluminum, and palladium. These moves are following the path we previously outlined in the in-depth podcast “The End Game in Ukraine.” We are receiving a large number of emails this morning from subscribers to ZYX Buy about these market moves. A trade on inverse oil ETF SCO was given in ZYX Buy this morning. Most of these trades are in ZYX Short. So far, most of the trades in ZYX Short based on Russia have been highly profitable.
Home Price Index
S&P Case-Shiller Home Price Index came at 19.1% vs. 18.7% consensus.
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
Gold is 🔒 on peace talks.
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.
Oil
Oil is 🔒 on peace talks.
The momo crowd is 🔒 in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see oil ratings.
Bitcoin
There is 🔒 in bitcoin on peace talks. Bitcoin is a risk asset, not a hedge. Peace talks mean a ‘risk on’ environment.
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 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 $1898, silver futures are at $24.41, and oil futures are $101.26.
S&P 500 futures resistance levels are 4713, 4770 and 4826: support levels are 4460, 4400 and 4318.
DJIA futures are up 275 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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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.
