To gain an edge, this is what you need to know today.
Tepid Reaction
Please click here for a chart of S&P 500 ETF (SPY) which represents stock market benchmark index (SPX).
Note the following:
- Many investors watch the news that moves the markets.
- Intelligent investors go one step further — they know that often the reaction to the news in the stock market is more important than the news for analyzing their investments.
- There are two pieces of good news. Pfizer (PFE) and BioNTech (BNTX) have announced that their vaccine is 95% effective. This is much better than the data previously disclosed and slightly better than the data from Moderna (MRNA).
- Vaccines are often less effective in older people. For example, those over 65 are given a stronger dose of flu vaccine. One concern about the coronavirus vaccines has been if they would work for older adults. PFE vaccine is 94% effective in older adults. However, as of this writing, we do not have access to the data to verify this claim.
- There is good news on Boeing (BA) 737 Max plane. The FAA is ungrounding the plane. BA is a member of Dow Jones Industrial Average (DJIA). BA stock is up strongly. (Those holding SPR from an earlier signal have about doubled their money in a month; SPR is a manufacturer of fuselage, propulsion and wing systems — the signal was given in anticipation of the news that is being released today. SPR is now reaching the prior target zone but the target is now being raised.)
- As of this writing, the reaction to double good news is tepid.
- The chart shows vaccine high.
- The chart shows that the market is staying above the magnet line but below the vaccine high line.
- In theory, the market should break the vaccine high line decisively based on the recent behavior of the momo crowd. The market may yet do so later in the day or in the week.
- If the market does not break decisively above the vaccine high, this will be a concern and may lead to a very, very short term sell signal.
Housing Starts
Housing Starts came at $1.53M vs. $1.44M consensus.
Housing Permits came at $1.55M vs. $1.55M consensus. Housing permits are a leading indicator.
The data shows that the housing market is still red hot.
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 in the early trade. Smart money is🔒.
For longer-term, please see gold and silver ratings.
Oil
API data showed a build in crude inventories of 4.174M barrels vs. consensus of 1.95M barrels. API data is bearish but there is buying in the oil market in anticipation of OPEC action.
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 down and bonds are ticking up.
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 $1877, silver futures are at $24.48, and oil futures are $42.16.
S&P 500 futures resistance levels are 3630, 3800 and 4000: support levels are3600, 3520 and 3460.
DJIA futures are up 106 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 🔒 in cash or treasury bills or short-term bond funds 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, 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.
This post was just published on ZYX Buy Change Alert.
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