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

Engineering Silver Short Squeeze

Please click here for a chart of silver ETF (SLV).

Note the following:

• The new momo crowd is hard at work trying to engineer a short squeeze in silver.
• Silver is a small market and for this reason, it is easy to squeeze.
• There is precedence — back in 1980 silver spiked when the Hunt brothers cornered the silver market only to subsequently crash.  There were also attempts to corner the silver market in 2011 — silver first ran and then crashed.Our long time subscribers would remember making a fortune from the Arora calls on silver in 2011.  Our call was to back up the truck and buy silver when it was in the $16 range.  In ZYX Global there was a 20% allocation of the total portfolio to silver — the largest amount ever.  Silver ran to $50.  The Arora Report issued a sell signal right at the very top on the exact day when silver topped.  Further, The Arora Report issued a signal at the same time to short sell silver or buy leveraged inverse ETF ZSL and gave a target of $34 in two weeks.  Silver fell to $34 in two weeks.
• There is unprecedented buying in silver options. Buying includes options that expire today.
• The chemical symbol for silver is AG.  AG is also the ticker symbol of a silver mining company.  Since the momo crowd does not do research and just buys on hype, there is significant buying in AG from people who think they are buying silver even though AG is identified as a silver company on WSB.
• The chart shows that significant resistance is nearby in silver ETF SLV.
• RSI on the chart shows that RSI on silver is overbought but it has room to run.
• The chart shows heavy volume.  Heavy volume is the result of market makers buying SLV to hedge the options they are selling to the new momo crowd.

Robinhood

Robinhood has received a $1 billion bailout from its existing shareholders.  Robinhood has also drawn on its bank credit lines.  Robinhood has been asked to post additional collateral.

Meme stocks such as GME, AMC, NOK, BB and BBBY are moving higher as Robinhood is lifting restrictions on these stocks after the outrage by the new momo crowd and politicians.  Meme stocks are those favored by the new momo crowd.

Crypto

The new momo crowd is buying Dogecoin (DOGE.X) — it has moved up 345%.

Elon Musk’s tweet is running up bitcoin.

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 🔒.

The momo crowd is 🔒 silver in the early trade.  Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

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 up and bonds are ticking down.

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 $1876, silver futures are at $27.62, and oil futures are $52.87.

S&P 500 futures resistance levels are 3800, 3860 and 3920: support levels are 3630, 3600 and 3520.

DJIA futures are down 166 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.

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

Fortunes Are To Be Made

Please click here for a chart of American Airlines (AAL).

Note the following:

• Money printing, excessive government borrowing, the new momo, short squeezes, pumps and dumps, regulators behind the curve — this will end badly.
• Even though we can confidently say this will end badly, our call has been and continues to be that the bubble will get bigger.
• Fortunes are to be made.
• Investors need to be adaptive. Please click here to see how the model at The Arora Report is adaptive, ie., automatically changes with market conditions.
• The Morning Capsule is about the big picture. Individual stocks are used only to illustrate the point.
• The chart shows when the earnings of American Airlines were released.
• There was nothing spectacular about the earnings.
• The chart shows the new momo crowd bought the news as the stock was pumped on the media.  The momo crowd does very little analysis and mostly buys based on pumps in the media.
• The chart shows the momo crowd buying led to a short squeeze.
• The chart shows the digestion period.
• 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 stayed solid green indicating excellent net demand for the stock.

GDP

Q4 GDP came at 4.0% vs. 4.4% consensus.  Investors should note that GDP is a lagging indicator even though the stock market puts great reliance on it.

Jobless Claims

Initial Jobless Claims came at 847K vs. 875K consensus.   This is a leading indicator and carries heavy weight in our models.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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

The momo 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 up and bonds are ticking down.

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 $1842, silver futures are at $25.47, and oil futures are $53.07.

S&P 500 futures resistance levels are 3800, 3860 and 3920: support levels are 3630, 3600 and 3520.

DJIA futures are up 204 points.

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

$3 Trillion Buying Power

Please click here for a chart of GameStop (GME) short squeeze

Note the following:

• All investors should pay serious attention to the new momo crowd.
• Prudent investors should consider not just dismissing the new momo crowd simply because of their odd behavior.
• The new momo crowd is intelligent, strategic and well organized.  At the same time, the new momo crowd is reckless, fearless and not fully informed.
• A unique characteristic of the new momo crowd is that they are not afraid of extreme volatility.
• The poster child of the new momo crowd’s success is GME.
• Take a look at the chart of GME. Pay special attention to the scale on the right-hand side.  In a very short time, the stock went from under $100 to over $360.
• 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 chart shows that even when Wall Street deployed its full force to crush the new momo crowd, the VUD indicator stayed solid green. The new momo crowd buying totally overwhelmed selling by the establishment.
• When it is all said and done, stocks move not based on analysis but based on supply and demand.
• The new momo crowd has amassed, in our estimate buying power of about $3 trillion using options. Nobody should ignore such massive buying power.
• Several favorites of the old momo crowd are being liquidated as those investors are getting margin calls because they short sold favorites of the new momo crowd.
• Now there is a new battle between the old momo crowd and the new momo crowd.

The Fed

The Fed will announce its policy decision at 2:00 pm ET.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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

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 bonds are ticking up.

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 $1839, silver futures are at $25.13, and oil futures are $52.46.

S&P 500 futures resistance levels are 3860, 3920 and 4000: support levels are 3630, 3600 and 3520.

DJIA futures are down 339 points.

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

Post-Election February

Please click here for a chart of  S&P 500 ETF (SPY) which represents the benchmark for the stock market index (SPX).

Note the following:

• In post-election years, February tends to be a weak month. In February 2001, Nasdaq fell 22.4%. Since 1950, Nasdaq has fallen on the average 3.3% and S&P 500 has fallen 1.6%.
• The chart shows that so far in earnings season, S&P 500 has drifted up. Major earnings are ahead this week.
• After a big win with GME, the momo crowd is dreaming bigger.  They are casting a wider net to run up stocks just because they can.
• The Federal Reserve is meeting today and tomorrow.  The market tends to run up prior to and during the Fed meeting on expectations of the Fed further spiking the punch bowl.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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

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 up and bonds are ticking down.

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 $1855, silver futures are at $25.56, and oil futures are $53.02.

S&P 500 futures resistance levels are 3860, 3920 and 4000: support levels are 3800, 3630 and 3600.

DJIA futures are up 96 points.

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

The Coup

Please click here for a chart of  GameStop (GME).

Note the following:

• The Morning Capsule is about the big picture and not about individual stocks.
• At times, the best way to illustrate the big picture is with a particular stock.  This is one of those times.
• The momo crowd has engineered a big coup with significant implications for prudent investors.
• The coup is engineering a short squeeze in the open in the stock of GME.
• There have always been people who have manipulated stocks.
• There have always been short squeezes. In our over 30 years in the markets, the engineering of this short squeeze is extraordinary in that it is being organized in the open right in front of the regulators under the guise of free speech.
• The chart shows three legs of the short squeeze.
• The chart shows that the short squeeze is occurring on heavy volume.
• A major contributor to the short squeeze is gamma squeeze. When there is an inordinate amount of buying in call options in a stock, the market makers rapidly buy the stock to hedge their risk.  This leads to gamma squeeze.  The important point to note is that it is easy for the momo crowd to cause a gamma squeeze with relatively little capital.
• Our older subscribers may remember Blockbuster.  Blockbuster was in the business of renting videos on tapes and disks.  Blockbuster flourished before consumers were able to download videos and streaming video became a reality.
• Blockbuster went out of business even though Blockbuster tried numerous strategies for ancillary products and services.
• GME is in the business of selling video games on disks primarily through brick and mortar stores.  Now consumers are able to download games and play games online.  Similar to Blockbuster, GME is trying various strategies with new services and products. This is what momo crowd is hanging its hat on.  However, there is no way to save the business of selling video games on disks from physical stores.
• There are serious implications both positive and negative for prudent investors of what is happening.  We will address that in the future.
• If nothing changes, investors will need to change the way they invest and trade.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 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

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 slightly 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 1863, silver futures are at $25.69, and oil futures are $52.13.

S&P 500 futures resistance levels are 3860  and 4000: support levels are 3800, 3630 and 3600.

DJIA futures are down 159 points.