NASDAQ UP OVER 3% AS MISLEADING MOMO GURU NARRATIVE TAKES HOLD

Twitter
LinkedIn
Facebook

By Nigam Arora & Dr. Natasha Arora

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

Misleading Narrative Takes Hold

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 when ADP data and GDP data were released.  Please read the Morning Capsule for details.
  • The chart shows when JOLTS data was released.  JOLTS shows 10.334M job openings.
  • The chart shows when the text of Powell’s speech was released.
  • The chart shows that the stock market took off on Powell’s speech.  At the peak, NASDAQ was up over 3%.
  • Everything Powell said was already well known.  For this reason, in a rational market, there should have been no positive or negative reaction to Powell’s speech.
  • We previously shared with you that Powell was expected to say that it was time to slow down rate hikes.  This is exactly what Powell said.  However, in any logical objective analysis, this is not a reason to buy stocks.   As we have explained before, the Fed has already aggressively raised rates, and it is sensible to slow down because monetary policy works with a lag.
  • Momo gurus’ job is to run up the market.  The momo crowd wrongly believes that the job of their gurus is to provide objective analysis.  Since the momo crowd does not do any analysis and simply follows their gurus like sheep, momo gurus’ misleading narrative is taking hold and leading to aggressive buying by the momo crowd.
  • The momo crowd is most aggressively buying tech stocks and junk stocks.
  • Momo gurus’ narrative is highly misleading because it does not explain the rest of Powell’s speech, which was hawkish.
  • Here are the key points from Powell’s speech and Q&A.
    • Rates will rise to a “sufficiently restrictive level.”
    • The terminal rate will likely be higher than what was thought at the September FOMC meeting.
    • Lags in monetary policy mean that it is difficult to not overtighten.  Slowing rate hikes will allow time for inflation to come down.
    • The target for inflation is still 2%.
    • The possibility for a soft landing has narrowed.
    • The Fed needs to see more evidence that inflation is declining.  Inflation is currently still too high.
  • As we have previously shared with you, in The Arora Report analysis, there are two keys to the Fed policy.
    • How high do terminal rates go?
    • How long does the Fed keep rates near the high terminal rate?
  • Powell’s speech confirms The Arora Report forecast that was provided to you a while ago.  Here are the key parts of The Arora Report forecast:
    • Unless inflation data comes softer, the terminal rate is likely to be around 5%.
    • The Fed is likely to keep interest rates above 4% for a while.
    • There is only a narrow path to a soft landing.
    • The highest probability scenario is a recession.
  • The chart shows when the Beige Book was released, but it was ignored because of Powell’s speech.
  • 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 shows net demand for stocks since Powell’s speech.
See also  FED’S FAVORITE INFLATION GAUGE RISES BY MOST IN A YEAR, BITCOIN SOARS, PUTIN’S NUCLEAR THREAT

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 very 🔒.

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.

Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE THE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE TRIAL TO PAID SERVICES.

See also  NVIDIA TRACES A BEARISH PATTERN – ARORA SIGNAL TO HEDGE RIGHT AT THE TOP, CENTRAL BANKS BUY GOLD

Please click here to take advantage of a FREE 30 day trial.

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.

Subscribe to 'Generate Wealth'

Free Forever

More To Explore

30 Day Free Trial

Cancel within 30 days and you owe nothing

When you take a FREE 30 day trial, you get access to powerful techniques used by billionaires and hedge funds to grow richer. You can continue to use these powerful techniques to grow richer even if you cancel your subscription. You come out ahead by subscribing no matter how you look at it.

A fortune is to be made from AI stocks.
Get the list of 18 AI stocks to grab your share of the profits — no cost to you.

A fortune is to be made from AI stocks.

Get the list of 18 AI stocks to grab your share of the profits.

AI is a $1 Trillion Market

Making A Fortune
In Artificial Intelligence

Golden Age of Artificial Intelligence