By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Jobs Report
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- As we previously shared with you, the momo crowd was aggressively buying stocks ahead of the jobs report hoping for job destruction. We also shared with you that bond traders were making the opposite bet and projecting a better jobs report.
THIS CLASSIC MISTAKE WILL COST YOU DEARLY – HERE IS HOW TO AVOID THE PITFALL
- The jobs report is better than expected. Here are the details.
- Nonfarm Private Payrolls came at 381K vs. 275K consensus.
- Nonfarm Payrolls came at 372K vs 250K consensus.
- The unemployment rate came at 3.6% vs. 3.6% consensus.
- Average hourly earnings came at 0.3% vs. 0.3% consensus.
- Average work week came at 34.5 vs. 34.6 consensus.
- The chart shows that the market has moved up above the support/resistance zone.
- The chart shows the rally has been on low volume. This is a negative.
- The chart shows that RSI is rolling over without reaching an overbought level. This is a negative.
- There is nothing in this report that will deter the Fed from a 75 basis point rate hike.
- Now that momo gurus’ narrative of the last few days has proven to be wrong, expect them to come up with a new narrative to persuade investors to buy stocks and expect the momo crowd to follow.
- Important economic data such as CPI is ahead.
- Earnings season starts next week. In our analysis at The Arora Report, analysts’ estimates are too high.
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 🔒 stocks in the early trade.
Gold
The momo crowd is 🔒 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 has staged a big rally on the belief that whales will be successful in holding the recent lows.
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 $1736, silver futures are at $19.07, and oil futures are $103.45.
S&P 500 futures resistance levels are 3950, 4000, and 4200: support levels are 3860, 3770, and 3630. 3884
DJIA futures are down 58 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 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.
