MOMO CROWD DOES NOT BELIEVE THE FED AND AGGRESSIVELY BUYS STOCKS

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

New Mantra

Please click here for a chart of Nasdaq 100 ETF (QQQ).

Note the following:

• In 1970, Marty Zweig coined the phrase “do not fight the Fed.”  Since then, until recently, it has been the maxim of Wall Street.
• The maxim of not fighting the Fed posed a problem for momo gurus in 2022.  Momo gurus’ job is to persuade investors to buy stocks.  How could they persuade the herd to buy stocks when the Fed was tightening monetary policy?  Momo gurus invented a new mantra, “do not believe the Fed.”
• The chart shows a dramatic drop in the stock market on comments from Fed officials, especially Bullard’s comments.  We wrote in the Morning Capsule:

St. Louis Fed President James Bullard says that the Fed funds rate may have to rise to 5% – 7% to control inflation.

• The chart shows that the momo crowd has been aggressively buying the dip.
• The buying is especially strong in semiconductor stocks after Micron (MU) guided lower and Nvidia (NVDA) reported as well as guided slightly worse than the already lowered consensus.
• Apparently, the momo crowd believes that the bottom is in for semiconductor stocks.
• Aggressive buying in semiconductor stocks lifted the entire market since semiconductors are the leading sector.
• 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 VUD indicator is mostly orange, indicating net supply of stocks.

Money Flows

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

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.

Close

There appear to be buy 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.

Gold

The momo crowd money flows in gold are 🔒 since the Morning Capsule.

Smart money flows are 🔒 in gold since the Morning Capsule.

Oil

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

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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.