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Stock Market Mechanics
Please click here for a chart of S&P 500 ETF (SPY) which represents stock market benchmark index (SPX).
Note the following:
- Real bad headlines are expected about the virus over the weekend.
- The buying today is not just the momo crowd but also a short squeeze.
- The momo crowd is buying in anticipation of more bad virus news. The momo crowd is a believer in the theory that the worse the virus gets, the higher the stock market will go.
- In this morning’s Morning Capsule we wrote:
Remember it is Friday. Short squeezes tend to start on Fridays.
- The chart shows the time when the attempt to sell the market was rejected.
- After the rejection of the selloff, short sellers started buying to cover in earnest.
- The zone encased by the rectangle on the chart shows the short squeeze.
- The behavior shown on the chart is common on Fridays.
- The foregoing is an example of the mechanics of the stock market. It is important for investors to understand the mechanics of the stock market. There are many different mechanics — we highlight those for you as they occur. This is the best way to learn.
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 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.
The momo crowd money flows in gold are 🔒 since the Morning Capsule.
Smart money flows are 🔒 in gold since the Morning Capsule.
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
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.
This post was published yesterday in The Arora Report paid services. Since then the Morning Capsule has an update in the paid services.
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