POWELL CHANGES COLORS — TIME TO CHANGE YOUR INVESTMENT POSTURE

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

Powell Changes Colors

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

Note the following:

Please start by reading the Morning Capsule and the Special Capsule. A signal was given in the Special Capsule to raise hedges.
The chart shows an early selloff as momo gurus were spooked in the premarket.
Yesterday momo gurus were urging their followers to aggressively buy the dip because the Fed would rush to help them and run stocks higher.
The reason momo gurus were spooked this morning was that the prepared text of Powell’s testimony did not include the Fed rushing in to help the momo crowd with more money printing.
The chart shows that the momo crowd, out of habit, ignored their gurus and bought the dip at the open.
The chart shows momo gurus got more spooked when Powell said the following:

Powell wants to retire ‘transitory’ from his inflation narrative. In plain English, Powell is admitting the failure of his policy and that his calls were wrong.

The FOMC will discuss accelerating taper in the next meeting. In plain English, this means that the Fed is thinking about reducing money printing faster than Wall Street expected.

The chart shows the selloff.
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 was orange during the selloff, it turned green when momo tried to buy the dip but it has turned orange again as of this writing. All-in-all, there is a net supply of stocks.
Out of an abundance of caution, there is a change in investing posture. Please read the ‘Buy Zones And Buy Now Ratings’ section below. The momo crowd is likely to keep on buying but the change in posture is just in case they get spooked.

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 buy 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.