By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Watch Semiconductors
Please click here for a chart of semiconductor ETF SMH.
Note the following:
- Watch semiconductors as an early indication of a potential market move.
- The chart shows that semiconductors have pulled back to the top of the support zone.
- Technically, the support zone shown on the chart is a good place for semiconductors to bounce. If semiconductors bounce, the market is likely to follow. On the other hand, if semiconductors break the support zone, it will likely be an early indication of a market downturn
- The RSI on the chart shows that semiconductors can go either way.
- There are four crosscurrents.
- Officially, China is reporting only two new Covid deaths. However, there are unofficial reports from crematoriums of a very large number of deaths. This is causing uncertainty in China’s opening. Remember China has 1.4 billion people. There are reports that hospitals are being ordered to report the cause of death based on underlying conditions and not on Covid when a Covid positive person dies.
- Last week was a $4 trillion options expiration. Options expiration was to the downside. Typically, when a large option expiration is to the downside, the market moves up on Monday and Tuesday following provided there are no other crosscurrents.
- The seasonality is positive.
- The Arora Report has been sharing with you our analysis for a long time that Wall Street’s estimates for 2023 are too high. Now more and more strategists are coming around to this view.
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 🔒 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 🔒 in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin is range bound
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 up, and bonds are ticking down.
The dollar is range bound
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 $1801, silver futures are at $23.43, and oil futures are at $75.53.
S&P 500 futures resistance levels are 3950, 4000, and 4200: support levels are 3860, 3770, and 3630.
DJIA futures are down 16 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 good, very long term, existing positions. Based on individual risk preference, consider holding 🔒 in cash or treasury bills 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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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.
