MOMO CROWD RUNNING UP THE MARKET ON CONSUMER CONFIDENCE IS PLAIN WRONG

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

Consumer Confidence

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

Note the following:

• We have been sharing with you that seasonality is positive in the second half of December.
• In the Morning Capsule, we wrote:

The seasonality between here and the year end is positive.  Many investors are focused on the seasonality and are buying in the early trade.

• In the Morning Capsule, we also wrote:

Momo gurus are using the positives from Nike and FedEx earnings to add to their narrative to persuade their followers to buy stocks.

• Momo crowd buying intensified on consumer confidence shooting up.
• The chart shows when the latest consumer confidence data was released.
  • Consumer confidence came at 108.3 vs. 101.0 consensus.
  • This is especially good news leading into the holidays.
• EIA data also helped the stock market move up.  Please see the oil section below for details.
• The chart shows when the results of the Treasury auction were announced.
• The Treasury auction was good.  Here are the results:
  • $12B 20-year Treasury bond reopening
  • High yield: 3.935% (When-Issued: 3.948%)
  • Bid-to-cover: 2.68
  • Indirect bid: 72.3%
  • Direct bid: 19.0%
• Good Treasury auction results have kept yields from rising.  This in turn is helping the stock market to levitate.
• 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 green, indicating net demand for stocks.

Money Flows

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

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

Orders on close appear to be neutral.

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

EIA data showed a draw of 5.894M barrels vs. consensus of a draw of 1.65M barrels.  Previously, API data showed a draw of 3.069M barrels vs. consensus of a draw of 0.167M barrels.

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

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

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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.