MOMO BUYS STOCKS ON THE FIRST PUNCH BUT CANNOT OVERCOME SMART MONEY SELLING ON THE SECOND PUNCH

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By Nigam Arora & Dr. Natasha Arora

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

Double Punch

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 chart shows a double punch to the stock market today.
  • The first punch occurred when CPI showed inflation significantly hotter than the consensus.  For details, please read today’s Morning Capsule.  To see a 20-year chart of CPI please click here.
  • Smart money sold the first punch in the stock market as the chart shows.
  • To the momo crowd, every little dip in the stock market is a buying opportunity. Today was no different. The momo crowd bought the slight dip on the first punch and ran up the stock market.
  • The chart shows the second punch to the stock market came when the bond auction results were known.
  • The bond auction for $24 billion of 30-year debt being sold by the government was very weak.
    • The high yield was 2.000% compared to the when-issued yield of 1.976%
    • Bid-to-cover was 2.19.
    • The indirect bid was 61.1%.
    • The direct bid was 16.6%.
    • In plain English, the foregoing means that there was less demand compared to other recent auctions to lend money to the U. S. government for 30 years at a very low rate.
  • Smart money sold the second punch.
  • Momo bought the dip on the second punch.
  • 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 on the chart shows that momo buying in the stock market is having difficulty overcoming the smart money selling in the stock market.
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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 🔒.

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  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.

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