POWELL’S TESTIMONY CONFIRMS INVESTORS’ FEARS, BUT THEY DON’T WANT TO BELIEVE IT

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

Powell’s Testimony

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:

• Yesterday, we shared with you that investors were “buying the news” of Powell being hawkish on the first day of his congressional testimony.
• The chart shows that investors started the day optimistic and hoping that buying would continue during the second day of Powell’s testimony.
• The chart shows that investors’ hopes did not come true and there was a downdraft as Powell stayed hawkish.
• Here are the important points:
  • Powell is unconditionally committed to fighting inflation.
  • Rate cuts are not in the near future.
  • To the Fed, a shallow recession is better than sustained inflation.
  • The Fed does not have the market’s back.
• The price action shows that investors do not want to believe Powell.  If investors believe Powell’s testimony, the stock market would have experienced a significant drop. The sum total of Powell’s testimony is not fully discounted in the stock market.
• 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 solid orange, indicating a net supply of stocks.  When the price is holding up but the VUD indicator is solid orange, this indicates that buyers are very aggressive and willing to buy at higher prices, whereas sellers are very careful and they want to sell only at higher prices.

Money Flows

The momo crowd money flows since the Morning Capsule are very 🔒 (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 🔒 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

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

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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.