By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Nuclear War Threat
Not long ago, Russia’s actions in Ukraine were unthinkable. Similarly now, a nuclear war between Russia and the United States is unthinkable. However, investors need to pay attention that Russia’s Foreign Minister Sergei Lavrov is warning of a serious risk of nuclear war, and he wants to talk to the United States to resolve the issue. This is a major escalation. Right now, Wall Street is oblivious.
It is important for investors to not become overly aggressive and take note of the “Protection Bands And What To Do Now” section below.
Positive Positioning
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:
- What happens next in the market in the short term will come down to big tech earnings.
- Big tech earnings are ahead.
- MSFT reports today after the close.
- GOOG reports today after the close.
- FB reports Wednesday after the close.
- AMZN reports Thursday after the close.
- AAPL reports Thursday after the close.
- In addition to the earnings themselves, Wall Street’s positioning ahead of the earnings is very important. Paying attention to the positioning gives you a big edge. For those interested in next-level information on positioning, please listen to the podcast “Market Mechanics: Positioning.”
- Wall Street is positioned positively for big tech earnings.
- There are several scenarios. The most important scenario in view of the positive positioning is that a disappointment in earnings has the potential to cause significant selling in the stock market.
- On the other hand if earnings are positive, Wall Street will gain more confidence in their positioning and start aggressively buying.
- The chart shows the lower support zone.
- In view of the positive positioning, if there is a disappointment in earnings, this lower support zone will act like a magnet.
- The chart shows that yesterday’s rally, driven in part by short squeeze, carried the market into the support zone.
- The chart shows that this morning the stock market is pulling back, but it is still in the support zone.
Durable Goods
Durable Goods came at 0.8% vs. 1.1% consensus.
Durable Goods ex-transportation came at 1.1% vs. 0.5% 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 🔒 in the early trade.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin is range bound.
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 down, and bonds are ticking up.
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 $1902, silver futures are at $23.58, and oil futures are $99.24.
S&P 500 futures resistance levels are 4318, 4400 and 4460: support levels are 4200, 4000 and 3950.
DJIA futures are down 182 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 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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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.
