By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know now.
Nascent Rally
Please click here for a chart of Nasdaq 100 ETF (QQQ).
Note the following:
- The chart shows that the nascent rally was in full bloom when Peloton news hit.
- The news is that Peloton is stopping production of bikes and treadmills as inventory piles up.
- Peloton by itself is not a systematically important stock. However, PTON is an indication of excesses in this stock market. PTON has fallen from $166.57 to $24.06 as of this writing. At $166.57, almost every analyst had a strong buy on this stock. Now, many in the momo crowd are still holding PTON with massive losses.
- There are many popular stocks in this market that have not yet fallen like PTON but their fundamentals are highly questionable.
- The news from PTON highlighted the risk and triggered selling.
- The selling in the afternoon is exaggerated related to options expiration tomorrow.
- After option expiration related selling is done, simple mechanics of the market can easily result in a substantial rally. This is the reason to not short sell the market at this time. It is also not advisable to take large new short positions at this time due to the potential of a rally.
- 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 that the net supply of stocks during the afternoon sell off far exceeds the net demand for stocks during the morning rally.
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 sell 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 had an update in the paid services.
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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 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.
