By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know now.
Powell Not Extra Hawkish
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 chart shows when Powell spoke.
- In the Morning Capsule, we shared with you:
The Fed is playing whac-a-mole with the momo crowd.
- The chart shows that the mole has popped back up again.
- Powell said, “…restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.” In The Arora Report analysis, we read Powell’s statement as realistic and prudent. However, momo gurus have twisted it as a reason to buy stocks because Powell’s statements were not overly hawkish.
- The momo crowd is buying stocks because Powell was not extra hawkish.
- There is also buying by the momo crowd on hope strategy ahead of CPI. The momo crowd is hoping that CPI will be less than expected and as a result, the stock market will stage a big rally. This is keeping with the momo crowd’s pattern of buying ahead of key events, such as CPI. These events present risk that the momo crowd does not take into account.
- In The Arora Report analysis, CPI is potentially a binary event for the stock market. Please see the Morning Capsule for details.
- The chart shows when the Treasury auction results were announced. The Treasury auction was good. Here are the details:
- $40B 3-year Treasury note auction
- High yield: 3.977% (When-Issued: 4.000%)
- Bid-to-cover: 2.84
- Indirect bid: 69.5%
- Direct bid: 13.2%
- To learn how to interpret Treasury auctions, please listen to the podcast titled “Treasury Auction Data: Ignore The Most Popular.”
- 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 mixed, indicating a battle between the bulls and bears going into the CPI release.
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 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.
Orders on close are indeterminable.
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.
The momo crowd money flows in gold are 🔒 since the Morning Capsule.
Smart money flows are 🔒 in gold since the Morning Capsule.
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
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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