TURN AROUND IN TARGET, TAIWAN SEMICONDUCTOR, AND APPLE ENCOURAGES HEAVY BUYING

To gain an edge, this is what you need to know now.

Reduce Hedges

Consider reducing short term hedges to 2% – 6% from 3% – 9%.

Turn Around

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:

Please start by reading the Morning Capsule regarding warnings related to Target (TGT) and Taiwan Semiconductor (TSM).
The market started lower because of the dire warning from China and the second warning in three weeks from TGT.
Yesterday, hot money was buying Apple stock (AAPL) ahead of the WWDC event hoping for an unveiling of the new headset. The headset from AAPL is the next big thing. AAPL did not unveil the headset. The disappointment led hot money to sell early on.
After the down market opened, three new narratives developed.
- The industry wide inventory problem, including at TGT, is only temporary, so ignore the inventory buildup.
- A Chinese invasion of Taiwan is not going to happen tomorrow, so ignore the grave situation.
- Ignore the lack of headset unveiling by AAPL because the headset will be unveiled at some point in the future.
As the three new narratives developed, they encouraged strong buying in stocks across the board. The chart shows strong buying after the new narrative development.
The chart shows that when consolidation turned out to be shallow, it led to another leg up.
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 is solid green, indicating a strong net demand for stocks.

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.

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.

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.

Buy Zones And Buy Now Ratings

🔒

Nibbling

🔒

This post was published yesterday in The Arora Report paid services. Since then the Morning Capsule has had an update in the paid services.

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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.