INDUSTRIAL STOCKS HIT A NEW HIGH ON BELIEF OF NO RECESSION

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

Industrial Stocks Hit A New High

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 key feature of today’s trading is that industrial stocks, as represented by XLI, are hitting a new high on the belief that there will be no recession.
  • In The Arora Report analysis, the belief that there will be no recession is not based on sound analysis of the hard data but is instead, based on hope.  Our decades of experience tell us that hope is not a good investing strategy.  However, there is a silver lining here.  If both corporations and consumers believe that there will be no recession, they will continue to spend heavily.  Such heavy spending can become a self fulfilling prophecy resulting in no recession.
• The chart shows when the news came that Microsoft had beaten FTC in court for acquisition of video gaming company Activision (ATVI).  The news encouraged more buying in the overall market on the belief that now the floodgates will open for more buyouts.
  • In full disclosure, ZYX Buy has a position in ATVI from $58.33.  A new signal was given today when ATVI was trading at $92.09.
  • Stocks of video game makers such as EA and TTWO are jumping on the belief that now they will be bought out.  As a full disclosure, ZYX Buy Model Portfolio has EA from $20.74.  EA is trading at $137.03 as of this writing.
• The chart shows when the results of the Treasury auction were announced.  The auction was excellent.  This is further encouraging bulls.  Here are the results:
  • $40B 3-year Treasury note auction
  • High yield: 4.534% (When-Issued: 4.536%)
  • Bid-to-cover: 2.88
  • Indirect bid: 69.4%
  • Direct bid: 19.8%
• 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 is mostly green, indicating net demand for stocks.
• CPI will be released tomorrow at 8:30am ET.  Consensus is 0.3% for both headline and core CPI.
  • The momo crowd is hoping for a 100 point rally in the S&P 500 irrespective of what the CPI data is on the hope of no recession, AI frenzy, and fighting the Fed beliefs taking over.
  • In The Arora Report analysis, the momo crowd will likely succeed unless core CPI is worse than expectations and smart money decides to sell.

Potential After Hour Signals

Signals may be given after hours based on the news that will be released after hours.  The best trades often occur outside regular hours.  The reason is that almost all earnings are outside regular hours.

Buy signals will be in ZYX Buy.  Short signals will be in ZYX Short.

There are no stocks reporting earnings after hours today that may result in a signal.

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.

Close

Orders on close appear to be matched.

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

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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.