To gain an edge, this is what you need to know today.
Here Is What Is Ahead
Note the following:
- The chart shows the stock market is extended.
- The chart shows the two major support zones.
- The signal to increase cash was given not based on one day but looking forward to the entire third quarter.
- Jackson Hole Economic Symposium is scheduled for August 26 – 28. The symposium is sponsored by the Federal Reserve Bank of Kansas City. There is a tradition of the Fed announcing policy at this symposium.
- The prevailing wisdom is that the Fed may announce its plans for tapering at Jackson Hole.
- Since the market is driven by money printing, a reduction in money printing may have a negative impact on the stock market.
- The third quarter tends to be the weakest quarter of the year.
- September tends to be the weakest month of the year.
- Stock market crashes tend to occur in October.
- The earnings season is ahead.
- Consensus estimates of the earnings are based on estimates published by analysts. The market does not move based on consensus estimates that are widely published. The market moves based on whisper numbers. Whisper numbers are the ones that analysts share privately with their best clients.
- Whisper numbers are significantly higher than the consensus numbers for the upcoming earnings.
- Companies are likely to beat the consensus estimates. Will they beat the higher whisper numbers? This is a risk factor.
- Investors are conditioned that the market goes up on bad virus news. The worse the virus news, the more money printing by the Fed and more borrowing by Biden. This market is driven by money printing and borrowing.
- Going forward, the response to virus variants may not be positive like it has been in the past.
- The momo crowd believes that stocks only go higher and by their own buying they can push stocks higher and higher. If the momo crowd continues to be as aggressive as they have been, the traditional weakness because of the factors described above may be tempered.
- The market may start paying attention to antitrust moves against big tech stocks.
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 🔒.
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
The momo crowd is 🔒 oil in the early trade. Smart money is🔒.
For longer-term, please see oil ratings.
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 and bonds are range-bound.
The dollar is stronger.
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 $1803, silver futures are at $26.07, and oil futures are $73.43.
S&P 500 futures resistance levels are 4400 and 4460: support levels are 4318, 4200 and 4000.
DJIA futures are down 108 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.
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