By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Shenzhen Lockdown
Please click here for a chart of S&P 500 futures (ES_F).
Note the following:
- The chart shows a rally on the progress in Ukraine.
- You may recall that we reported the positive development in Ukraine before many were talking about it.
- Russian and Ukrainian officials are now giving a positive assessment of their talks. For those who want the next-level information, an in-depth podcast titled The End Game in Ukraine is now live. The podcast walks you through in detail the most important aspects and opportunities for investors.
- The rally shown on the chart would have been much stronger if it was not for scary headlines about Ukraine in the media and the media ignoring the positive developments.
- The chart shows that the rally on Ukraine has been cut short by the Shenzhen lockdown. For those not familiar with China, Shenzhen is the tech hub of China. As an example, Foxconn, the company that manufactures iPhones for AAPL is halting operations in Shenzhen. Shenzhen has a large population of 17.5 million. The lockdown is due to the spread of coronavirus.
- The virus is also spreading in Jilin and 24 million inhabitants have been locked in.
- There is panic selling in Chinese stocks. The selling has similarities to selling in the U. S. in March 2020.
- 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 as the positive news from Ukraine collides with negative news from China.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial) in the early trade. Smart money is 🔒 in the early trade.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒 in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒 oil in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin is moving up on Elon Musk saying that he is not selling his crypto holdings.
Markets
Our very, very short-term early stock market indicator is 🔒but can quickly become negative if the situation in China worsens. 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 are ticking up and bonds are ticking down. The 10-year Treasury yield has risen to 2.078% as of this writing on fears of stagflation ahead of the Fed decision on Wednesday.
The dollar is weaker.
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 $1963, silver futures are at $25.49, and oil futures are at $104.67.
S&P 500 futures resistance levels are 4318, 4400, and 4460: support levels are 4200, 4000, and 3950.
DJIA futures are up 231 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.
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This post was just published on ZYX Buy Change Alert.
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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.
