By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know now.
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.
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.
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.
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
This post was published yesterday in The Arora Report paid services. Since then the Morning Capsule has had an update in the paid services.
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