HONG KONG STOCKS JUMP 4.5% CAUSING U.S. YIELDS TO RISE PUTTING PRESSURE ON U.S. STOCKS

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By Nigam Arora & Dr. Natasha Arora

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

Yields Rise

Please click here for a chart of China large cap ETF (FXI).

Note the following:

  • Stocks in Hong Kong jumped 4.51% as many Chinese cities loosened COVID  restrictions over the weekend.
  • The chart shows that the 30% rally over two weeks is now extending.
  • The chart shows  is now at the bottom of the resistance zone. For this reason, the move up from here will be more difficult.
  • The price action on the chart shows a positive pattern.
  • The chart shows RSI divergence.  This is a negative.
  • Buy zones on China related ETFs ASHR, FXI, KWEB, and  are in ZYX Emerging.
  • The move up in Chinese stocks on the prospect of China reopening is causing yields to slightly rise in the early trade in the U.S.  
  • Rising yields are putting pressure on U.S. stocks in the early trade.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial) in the early trade.  Smart money is 🔒 in the early trade.

Gold

The momo crowd is 🔒 in the early trade.  Smart money is 🔒 in the early trade.

For longer-term, please see gold and silver ratings.

Oil

OPEC+ left its production unchanged.  The price caps on Russian oil are now in effect.  Russia is declaring that it will not sell oil to any country imposing price caps.  

As a result of the foregoing, oil is rallying.

See also  SMART MONEY SELLS ON MOMO CROWD MISINTERPRETING RETAIL SALES AND PPI DATA

The momo crowd is 🔒 in the early trade.  Smart money is 🔒 in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin is seeing buying.  It appears that whales are succeeding temporarily to convince mom and pop that the bottom is in.

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 up, and bonds are ticking down.

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 $1806, silver futures are at $23.07, and oil futures are at $82.38.

S&P 500 futures resistance levels are 4200, 4318 and 4400: support levels are 4000, 3950 and 3860.

 futures are down 240 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.

See also  WEEKLY STOCK MARKET DIGEST: FED’S FAVORITE INFLATION GAUGE RISES THE LEAST SINCE 2021, ALLIANCE AGAINST CHINA

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

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.

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