MOTHER OF ALL NUMBERS AHEAD – STOCK MARKET POSITIONED TO PROFIT FROM BAD NEWS

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

Pay Attention To Positioning

Please click here for a chart of semiconductor ETF (SMH).

Note the following:

• The jobs report is known as the mother of all numbers because of the attention investors and Federal Reserve pay to this report.
• The report will be released tomorrow at 8:30 am ET.  We have been sharing with you that it is important for investors to pay attention to stock market positioning. When events happen contrary to the positioning, violent moves in the stock market occur.
• The stock market is positioned for bad news tomorrow – a headline number much weaker than the consensus.  The consensus is 800K new jobs created.
• The thinking is that if the number is weak, it will give Powell a fig leaf to continue money printing at the rate of $120 billion a month without a taper.  Of course, you already know that part of the air that is inflating the stock market is money printing.
• If the jobs report is strong, such as a million new jobs created, the Fed will find itself boxed to announce a taper at the upcoming FOMC meeting September 21 – 22.
• There are always cross currents in the stock market. Signs of caution among non-momo investors are everywhere.
• The chart shows a sign of caution.  We have been sharing with you that semiconductors are a leading sector and often give a good indication for the future of the stock market.
• The chart shows the breakout.
• In contrast to Nasdaq 100 (QQQ), the chart shows that the breakout in semiconductors appears to be failing going into the jobs report.

Jobless Claims

The Jobless Claims report is a leading indicator and carries heavy weight in our models.  Please see 10 crucial inputs to ZYX Asset Allocation Model.

Initial Jobless Claims came at 340K vs. 348K 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 🔒.

Gold

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

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

Oil

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

For longer-term, please see oil ratings.

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 $1814, silver futures are at $24.16, and oil futures are at $69.20.

S&P 500 futures resistance levels are 4600 and 4900: support levels are 4460, 4400, and 4318.

DJIA futures are up 113 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.