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

Poor Jobs Data

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

Note the following:

• Non-farm Payrolls came at -140K vs. +112K consensus.  This is very poor data.
• Non-farm Private Payrolls came at -95K vs. +100K consensus.
• The momo crowd is excited on the poor jobs data as it strengthens the case for more borrowing and more stimulus.  This stock market is driven by excessive borrowing and excessive money printing.
• The chart shows that the stock market has now moved above the high of the  ‘outside day’ marked as ‘rarity.’  This is technically positive.
• The chart shows that after stagnating, RSI has moved higher. This is also technically positive.

Sentiment

Sentiment has reached the extreme positive zone. When sentiment reaches extreme it is negative.  As a note of caution, sentiment can easily move farther in the extreme zone.

Bitcoin

Bitcoin has moved to $41,281.  The expectation is that Democrats will borrow and send additional $2000 checks to everyone including to people whose incomes have gone up and who have suffered no loss.  Based on the past data, it is anticipated that a large part of this money will be used to buy Bitcoin and TSLA stock.

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 and 🔒 Bitcoin 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 up and bonds are ticking down.

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 $1887, silver futures are at $26.72, and oil futures are $51.70.

S&P 500 futures resistance levels are 3852 and 4000: support levels are 3800, 3630 and 3600.

DJIA futures are up 79 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 26% – 36% in cash or treasury bills or short-term bond funds or allocated to short-term tactical trades and short to medium-term hedges of 3% – 6% and short term hedges of 7% – 11%. 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.

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

The Allure

Please click here for a chart of Nasdaq 100 futures (NQ_F).

Note the following:

• The chart shows aggressive momo buying.
• 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 chart shows the VUD indicator was solid green during the initial phase of buying after the Capitol was secured.
• Since the early buying, the VUD indicator has been mixed. This indicates that not everyone has bought into the prevailing wisdom on Wall Street — events of yesterday mean nothing, the only thing that matters is more borrowing as a result of Democrats winning Georgia Senate seats.

Initial Claims

Initial Claims came at 787K vs. 752K consensus.

Bitcoin

Bitcoin futures jumped to $38,570 on more manipulation and the prospect of more borrowing by the government.

Investors need to understand that unlike stocks, Bitcoin is lightly regulated and there is no transparency to trading. A small group of players can easily manipulate the price to anything they like.

For those interested in Bitcoin, there are a number of alternates that trade like stocks. A trade was successfully completed with nice profits on EBON in ZYX Short.  Other signals may be given as appropriate.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is 🔒 gold and 🔒 Bitcoin 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 up and bonds are ticking down.

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 $1917, silver futures are at $27.23, and oil futures are $50.69.

S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.

DJIA futures are up 96 points.

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

Smart Money Sells Momo Stocks

Please click here for a chart of Nasdaq futures (NQ_F).

Note the following:

• The chart shows when a clear indication of a strong showing by Democrats in Georgia emerged.
• Smart money immediately and aggressively sold Nasdaq futures. Nasdaq futures are a proxy for momo stocks.
• The momo crowd has aggressively bought the dip in momo stocks. This is reflected in the VUD indicator.
• The VUD indicator is the most sensitive measure of net supply demand in real-time. The orange represents net supply and the green indicates net demand.
• Smart money is buying bank stocks, small-cap value stocks and marijuana stocks in the early trade.
• Democrats have won one Georgia seat.  The other seat is too close to call.   Our sources indicate that Democrats have an edge.
• Interest rates on benchmark 10-year Treasuries are crossing 1% for the first time in a while on the prospect of increased borrowing by Democrats.

ADP

ADP is the largest private payroll processor.  It uses its data to give an advanced glimpse of the official jobs report that will be released on Friday at 8:30 am ET.

ADP employment change came at -123K vs. -120K consensus.

PMI

Services and Composite PMIs will be released at 9:45 am ET.  They can potentially move the markets.

Bitcoin

Bitcoin crossed above $35,000 on the prospect of dollar debasement by Democrats.

Marijuana

Marijuana stocks are gapping up and being aggressively bought in anticipation of Democrats potentially winning the second seat.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 stocks in the early trade.  Smart money is 🔒 momo stocks but buying bank stocks, small-cap value stocks and marijuana stocks.

Gold

The momo crowd is 🔒 gold and 🔒 Bitcoin 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 up and bonds are ticking down.

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 $1940, silver futures are at $27.56, and oil futures are $49.96.

S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.

DJIA futures are up 42 points.

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

Raise Cash And Hedges

Investors should always give priority to return of capital over return on capital. It is time to raise cash and hedges. Please scroll down to ‘Protection Bands and What To Do Now?’ section.

A New Year Rarity

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

Note the following:

• The chart shows a New Year rarity.
• The chart shows that on the first trading day of the year, stocks opened higher but finished over 1% lower.
• The foregoing has happened only twice since 1983 — in 2000 and 2008.
• If the year 2021 turns out to be like the year 2000, the momo crowd of today will lose 90 to 95% of their portfolio value.
• If the year 2021 turns out to be like the year 2008, the momo crowd of today will lose 80 to 85% of their portfolio value.
• It is good to be aware but there is no reason to panic at this time. The reason is that unlike 2000 and 2008, interest rates are near zero, the Fed is excessively printing money and the government is excessively borrowing.  Contrary to many opinions, our call is that the behavior of the government has caused this stock market bubble. The probability is fairly high that the bubble will become bigger.
• The chart shows higher volume on stock market decline.  This is a negative.
• The chart shows RSI failed to get overbought before declining. This is a negative.

Watch Marijuana Stocks

Please start out by reading yesterday’s Morning Capsule about the Georgia election.  If Democrats win, marijuana stocks will likely fly.

We will shortly publish an update to the Marijuana Model Portfolio in ZYX Buy with 12 stocks.  We will also publish two ETFs to consider in ZYX Global Multi Asset Allocation.

Objection To Certification

January 6th is a big day.  Trump is mounting a big campaign to object to the certification of Biden as the next president.

The prevailing wisdom is that this is a futile effort.  However, keep in mind that Trump has always taken pride in surprising his opponents.  Could Trump have a surprise up his sleeve this time that may significantly move the stock market and gold?

Bitcoin To $146,000

After being a fringe, the establishment’s jumping on the Bitcoin bandwagon is now complete.  The countries most respected bank is projecting a long-term target for Bitcoin of $146,000.

ISM

ISM Manufacturing Index will be released at 10:00 am ET.  This number is often a market moving event.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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 🔒 buying 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 up and bonds are ticking down.

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 $1953, silver futures are at $27.65, and oil futures are $48.75.

S&P 500 futures resistance levels are 3800  and 4000: support levels are 3630, 3600 and 3520.

DJIA futures are down 41 points.

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

Georgia Election

Please click here for a chart of gold ETF (GLD).

Note the following:

• I am politically agnostic. My sole job is to help investors.  This post is about the impact of the Georgia election on investments and not about politics.
• The Georgia runoff election has the potential to have a major impact on the markets over the next year.
• If Democrats win, they will have control of the Senate — borrowing and spending will go through the roof.
• If Republicans win, Republicans will have control of the Senate — borrowing and spending will increase but not as much as if Democrats win.
• In practice, here is the difference between Democrats and Republicans. Democrats always want to borrow and spend.  Republicans want to borrow and spend when they are in power but oppose borrowing and spending when they are not in power.
• There are no good public polls.
• From private sources — Democrats are optimistic and Republicans are worried
• The election outcome will likely hinge on the turnout of the black vote in Atlanta vs. the turnout of Republicans who believe that the election is rigged.
• The chart shows that gold has broken above the resistance line with a strong gap up.
• Gold is indicating that Democrats will win and borrowing will go through the roof.
• RSI shows that gold is overbought but there is room to run more.  Keep in mind that due to the overbought condition, there can be significant pullback if Republicans win and there is no other news such as the dollar falling.
• The conventional wisdom has been that if Democrats win, the stock market will go down because of higher taxes.
• The momo crowd has departed from conventional wisdom. The momo crowd’s take is that the market will go up if Democrats win, perhaps after a brief pullback because of increased borrowing.  After all, the momo crowd has been buying the market on excessive borrowing and excessive money printing.
• Investors should pay attention to the ‘Protection Bands and What To Do Now?’ below.  There may be changes as more data becomes available.

Bitcoin

Bitcoin was manipulated to over $34,000.  So far Bitcoin has not been able to hold the gains.

New Year Money

Blind money flows into the stock market during the first two days of January.  Blind money is the money that investors send to the stock market without any analysis of any kind.  However do not get carried away, many hedge fund strategies are likely to sell into the strength.

Momo Crowd And Smart Money In Stocks  

The momo crowd is 🔒 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 up and bonds are ticking down.

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 $1944, silver futures are at 27.69, and oil futures are $48.74.

S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.

DJIA futures are up 101 points.