By Nigam Arora & Dr. Natasha Arora

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

Confirmation

Please click here for a chart of copper ETF (CPER).

Note the following:

  • Investors are looking for confirmation of the stock market rally.
  • A popular method of confirmation is the copper to gold ratio.
  • The lower pane of the chart shows the copper to gold ratio.
  • Here is the theory behind this confirmation indicator.
    • Copper is known as Dr. Copper because it usually moves up on economic strength.
    • Gold is a safe haven.
    • Copper is an industrial metal but gold is a financial metal.
    • A rising copper to gold ratio indicates the economy is getting stronger and there is less need for a safe haven.
  • The chart shows that the copper to gold ratio broke above the high from May 2021.
  • At this time, the confirmation is not clear for the following reasons.
    • The chart shows that the copper to gold ratio has pulled back to the breakout line instead of going straight up.  This ratio will have to go higher for confirmation.
    • Copper itself did not break above the May high. Ideally, copper will have to break above the May high to confirm.
  • We have been writing that there was a flaw in the analysis by the analysts to run up the stock market based on the first handful of earnings.  Now more earnings are being released.  Two of the most important earnings of this week are NFLX and TSLA.
    • NFLX earnings were released yesterday after the close.  The earnings were good but below whisper numbers.  The guidance was not good.  After trading above $660, the stock has pulled back to $626 as of this writing in the premarket.  As full disclosure, a short sell signal was given in ZYX Short at $660 and the trade is now nicely profitable.
    • Tesla earnings will be released after the market close today.

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 and bonds are range-bound. The 10-year yield is at 1.63% as of this writing.

The dollar is slightly 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 $1788, silver futures are at $24.17, and oil futures are at $81.37.

S&P 500 futures resistance levels are 4600 and 4900: support levels are 4460, 4400, and 4318.

DJIA futures are down 3 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.

To take a free 30-day trial to paid services to gain access to more opportunities, please click here.

This post was just published on ZYX Buy Change Alert.

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Nigam Arora

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

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.