OPTIMISM OVER THE BUSIEST EARNINGS WEEK, FOREIGNERS RUSHING INTO INDIA

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The Busiest Week  

Please click here for a chart of  Nasdaq 100 ETF ().

Note the following:  –

  • The chart shows that the market is consolidating around the breakout line. This indicates indecision.
  • We have previously shared with you that over the coming days, the following will be the prime drivers of the market.
    • Earnings
    • Interest rates
    • Fed policy over tapering
    • Biden borrowing
  • This is the busiest earnings week.
  • Stocks will move based on the difference between actual reported numbers and projections compared to the whisper numbers.
  • Whisper numbers have been moving higher and higher compared to the consensus numbers.
  • Consensus numbers are the numbers that analysts publish and become available to the general public.
  • Whisper numbers are the numbers that analysts closely guard and share privately with their best clients.

Bitcoin

When bitcoin fell below $50,000 last week, many trend following gurus were predicting a fall to $40,000.  As is often the case, instead of following the gurus, bitcoin did what normally happens in the markets.  Stops under $50,000 were taken out.  Once the stops were cleaned out, bitcoin started jumping.  Once the momentum started to the upside, FOMO (fear of missing out) caused heavy buying. Bitcoin has crossed $53,000 as of this writing.

To add to the legitimacy of bitcoin, JPMorgan (JPM), the most prestigious bank in the country, may offer an actively managed bitcoin fund.

India

India sets a new world record of 352,991 new daily  COVID cases and 2,812 virus deaths.  This is the fifth global record in a row.

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India is running into severe oxygen shortages. India’s capital is under lockdown.

How does the stock market in India respond?  It just went up 1.1%.  The Indian market is apparently seeing significant buying from foreigners. The Fed and ECB have created more money than the economy can handle.  This money is looking for places to buy stock.  Foreigners are assuming that the crisis in India will be over soon and the Indian stock market that is already very high will go higher.

To see the buy zone, the best India ETF, and our ratings, please see ZYX Emerging or ZYX Allocation.

Durable Goods

Durable Goods Ex-transportation came at 1.6% vs. 1.6% consensus.

Headline Durable Goods came a 0.5% vs. 2.0% consensus.

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 🔒.

Gold

The momo crowd is 🔒 gold in the early trade.  Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒 oil in the early trade.  Smart money is 🔒.

For longer-term, please see oil ratings.

Markets

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 are ticking up and bonds are ticking down.

The dollar is stronger.

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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 $1776, silver futures are at $26.10, and oil futures are $61.30.

S&P 500 futures resistance levels are 4200, 4318 and 4400: support levels are 4000, 3950 and 3860.

DJIA futures are up 52 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, on dips, 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, 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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This post was just published on ZYX Buy Change Alert.

 

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