ISM PRICES INDEX ADDS FUEL TO THE FIRE OF AGGRESSIVE STOCK BUYING

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By Nigam Arora & Dr. Natasha Arora

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

ISM Prices Index

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 momo crowd continues to be in the mode of aggressively buying stocks.  The news and the data do not matter because the momo gurus are experts at twisting things to persuade investors to buy stocks.
  • The chart shows that the day started out with buying in stocks in celebration of Pelosi safely leaving Taiwan.
  • China is conducting extensive live fire drills all the way up to 12 miles from Taiwan.  So far, the market is ignoring these drills.
  • In the Morning Capsule we wrote,

ISM Non-Manufacturing Index will be released at 10am ET.  The consensus is 53.8%.  This is often market moving data.

  • The chart shows when ISM Services Index was released.  The chart shows a strong rally after the release of the data.  ISM Index came at 56.7%.  This is a very strong number.  The market could have interpreted this very strong number to support what Fed officials have been telling us – the Fed continues to raise rates to fight inflation contrary to the momo gurus’ narrative that the Fed will not fight inflation and cut rates.
    • The market chose to focus on the Prices Index that is part of the data release.
    • The Prices Index decreased to 72.3%.  It is down for the third consecutive month.
  • 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 net demand for stocks.
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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 extremely 🔒.

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

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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