POSITIVE FACTORS CONVERGE TO INFLATE THE STOCK MARKET BUBBLE

By Nigam Arora & Dr. Natasha Arora

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

Inflating The Bubble

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

Note the following:

  • Several positive factors are converging to inflate the stock market bubble.
    • The jobs report showed that employment was much stronger than the consensus and wages are rising fast.
    • Yesterday we shared with you that unit labor cost was rising even faster.
    • Yesterday we also shared with you that productivity was falling.
    • This morning we shared with you the great news from Pfizer () that their antiviral is 89% effective against COVID.
    • In our living memory, any other Fed would be tightening the policy significantly under these circumstances. However, this Fed is in la-la land. The Fed is still printing money and keeping Fed funds near-zero — exactly the same policies that were put in place when the economy was locked down, there was no vaccine and there were no antivirals.
    • The excess liquidity from the Fed is coming into the stock market and running it up.
    • After Democrats underperformed in the election this week, we wrote:

One camp believes that Democrats underperformed because they were not able to deliver even more free money than they have already delivered.

The other camp believes that Democrats underperformed because the public sees the harm from too much free money being delivered by Democrats.

    • The lesson many Democrats claim to have learned from the election losses is that they need to borrow more and provide more free money.
  • The chart shows strong buying out of the gate.
  • 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 in the morning but the magnitude was small.
  • The chart shows the VUD indicator turned orange with good magnitude during a sell-off attempt.
  • As of this writing, the sell-off attempt has stalled.

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.

Buy Zones And Buy Now Ratings

🔒

Nibbling

🔒

Close

There appear to be sell 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.

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

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

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.

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