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

Very Worried

Please click here for a chart of  S&P 500 ETF (SPY) which represents the benchmark for the stock market index (SPX).

Note the following:

  • The top banking regulator is ‘very worried’ about the stock market bubble in the U. S.
  • You may be thinking how could it be because the Fed is inflating the bubble and the Fed is the top banking regulator in the U. S.
  • Top regulators typically make a policy of not commenting on other countries.  Yet, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission has chosen to say that he is ‘very worried’ about the risks from the bubble in the United States and European stock markets.  He thinks the bubble will burst ‘sooner or later’ because the U. S. and European markets are heading in the opposite direction to their economies.
  • Guo’s comments caused stocks in Asia to slip.
  • Guo’s comments are also stopping the rally in the U. S. stock market in the early trade.
  • Prudent investors should control FOMO (fear of missing out) and pay attention to the Protection Bands and What To Do Now? below.  Right now this is the best way to participate in the upside of the stock market and protect yourself at the same time.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial)  stocks in the early trade. Smart money is 🔒.

Gold

The momo crowd is 🔒 gold in the early trade.  Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒 oil in the early trade.  Smart money is 🔒.

For longer-term, please see oil ratings.

Markets

Our very, very short-term early stock market indicator is 🔒.  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 down and bonds are ticking up.

The dollar is stronger.

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 $1724, silver futures are at $26.34, and oil futures are $60.70.

S&P 500 futures resistance levels are 3950, 4000 and 4200: support levels are 3860, 3770 and 3630.

DJIA futures are down 28 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, on dips, 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, 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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