KUO SPOILS MOMO CROWD’S RALLY ATTEMPT AHEAD OF POWELL

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By Nigam Arora & Dr. Natasha Arora

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

Kuo Apple Comment

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

Note the following:

  • The all important Powell speech is tomorrow.
  • As is their pattern, the momo gurus have been promoting a narrative ahead of Powell’s speech to run up the stock market.  Their narrative is that Powell would talk about slowing interest rate hikes.  This narrative influences the momo crowd to buy stocks but not prudent investors.  Prudent investors know that the Fed has already raised rates by a large amount and monetary policy works with a lag; it is natural for the Fed to slow down to see the impact of what it has already done.
  • In The Arora Report analysis, the key is the terminal rate and how long the Fed keeps rates near the terminal rate.  Momo gurus’ narrative is not a fundamental reason to buy strategic positions in stocks for the long term, but if momo gurus’ narrative starts working, it may be a reason for a short term tactical trade.  
  • The chart shows the momo crowd’s rally attempts.
  • Apple (AAPL) has a very heavy weight in indexes.  For this reason, moves in Apple stock disproportionately impact indexes.
  • The chart shows a rally when the news came that the lockdown of iPhone city in China would be lifted.
  • The chart shows when consumer confidence was released.  Consumer confidence came at 100.2 vs. 100 consensus.
  • The stock market was on its way to stage a major rally when Ming-Chi Kuo spoiled the party.  Kuo is perhaps the smartest Apple analyst out there.  He has extensive contacts in China.  It is always important to listen to Kuo.  Kuo said that iPhone production is likely to fall short by 15M – 20M units.
  • The chart shows that the stock market dropped on Kuo comments.
  • Bulls contend that the drop in iPhone production is no big deal because the sales are only deferred.  Bears contend that some sales will be lost.
  • 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 the battle between bulls and bears ahead of Powell’s speech.
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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.

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.

Gold

The momo crowd money flows in gold are 🔒 since the Morning Capsule.

Smart money flows are 🔒 in gold since the Morning Capsule.

Oil

To understand the oil movement, please start by reading the Morning Capsule.  Oil gave up some of its earlier gains on a report that OPEC+ will likely not cut production.

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

🔒

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

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.

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