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

Income Jumps

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

Note the following:

• Personal Income in March jumped an astounding 21.1%. Analysts were expecting 20.5%.  How was such an astounding feat accomplished?  It was due to the genius of our leaders led by President Biden to borrow heavily without any plan to pay it back and sending free money to not only people who needed it but a bulk of it to people who did not need it.
• Before you send us hate mail, claiming that most people needed the money, take a look at the data the government provided us this morning.   Personal Spending of Americans went up 4.2%.  If a bulk of the people receiving the free money needed it,  personal spending would have gone up closer to the 21.1% increase in personal income.
• What did people who did not need the money do with the free money?  They bought bitcoin, dogecoin, and other meme stocks such as GME, AMC, and MVIS.
• The chart shows the resistance level for QQQ.
• The chart shows a failure at the resistance level.
• The chart shows that the market is now back at the support level.
• On the positive side, over 80% of earnings reported so far are better than expected.
• Also on the positive side, the Federal Reserve continues to print $120 billion every month.
• The stock market looks forward.  Bulls are excited about Biden borrowing trillions of more dollars.
• Also on the positive side, economists are expecting a GDP rise of about 8%.  The innate capability of the American economy is for GDP to rise about 2%.  The rest of the rise, in large part, will be due to massive money printing and borrowing.
• In view of the foregoing, why does Nasdaq keep on failing at the resistance?

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

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 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 $1769, silver futures are at $26.22, and oil futures are $63.46.

S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.

DJIA futures are down 171 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.

MARKET LOVES BIDEN

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

Market Loves Biden

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

Note the following:

• Traditionally the stock market has not liked tax increases and big government.
• The expectation was that the stock market would act adversely to Biden’s speech due to tax increases, heavy spending, and the return of big government.
• The market is different from the historical markets – the market is loving Biden’s speech.
• It is important for investors to not get fixated on one opinion, pay attention to the hard data and stay flexible.
• The chart shows that Nasdaq is up against the resistance.
• Bulls will attempt to push the Nasdaq to a new high.

Jobless Claims

Initial Claims came at 553K vs. 530K consensus.

GDP

Q1 GDP Advance came at 6.4% vs. 6.5% consensus.

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 $1780, silver futures are at $26.40, and oil futures are $65.29.

S&P 500 futures resistance levels are 4318 and 4400: support levels are 4200, 4000, and 3950.

DJIA futures are up 149 points.

RECORD AD SPENDING TO CAPTURE THE BOOM, MORE BIDEN BORROWING, THE FED DAY

April 28, 2021

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

Capturing The Boom

Please click here for a chart of Alphabet (GOOG).

Note the following:

• The purpose of the Morning Capsule is to give the big picture.  The chart of GOOG is being used to illustrate the point.
• Companies want to capture the economic boom.  For this reason, they are stepping up advertising.
• GOOG is a big beneficiary of the economic boom.  GOOG earnings showed that digital advertising revenues smashed records.  Advertising on YouTube was especially strong.
• GOOG earnings were better than the lofty consensus numbers and very high whisper numbers.
• 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.
• Normally when there is such a large move in a stock, there is profit-taking which turns the VUD indicator solid orange.
• The chart shows when GOOG earnings were released.
• The chart shows that the VUD indicator has been mostly green indicating net demand even after the big rise.

Biden Borrowing

President Biden will unveil “American Families Plan” in an address to a joint session of Congress.  In keeping up with the prevailing wisdom that borrowing huge sums is a free lunch, the $1.8 trillion plan will be in part funded by more borrowing.

The Fed Day

FOMC statement will be released at 2:00 pm ET.  Powell press conference will start at 2:30.  The consensus is that the Fed will continue to claim that inflation will be transitory and the Fed will continue to print money in spite of the strong economy.

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.  The momo crowd is disappointed that gold did not break out above $1,800.  Smart money is 🔒.

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

Oil

API reported a build of 4.31M barrels vs. a consensus of 659K barrels.  This data is bearish.

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.

See also  HEDGES TURN VERY PROFITABLE, GOOD JOBS REPORT, CHINA RETALIATES

Interest rates are ticking up and bonds are ticking down.

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 $1765, silver futures are at $25.96, and oil futures are $63.52.

S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.

DJIA futures are down 59 points.

7 – 20% CORRECTION IF EARNINGS DO NOT MEET LOFTY EXPECTATIONS

April 27, 2021

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

Earnings

Please click here for a chart of  Tesla (TSLA).

Note the following:

• The Morning Capsule is about the big picture and not about an individual stock. The purpose of the Tesla chart is not to talk about TSLA but to illustrate the big picture.
• Tesla reported earnings better than the consensus and better than the whisper numbers.
• Tesla had its strongest order booking in the company’s history during the first quarter.  This is remarkable because the first quarter is usually weak.
• TSLA made more money from bitcoin and selling regulatory credits than selling cars.   TSLA had a pre-tax income of $533 million.  The income includes $101 million gain from selling bitcoin and $518 million regulatory credit.  If these two items were taken TSLA would have had a $86 million loss.
• The chart shows when the earnings were reported.
• The chart shows that after the earnings report the stock fell modestly.
• 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 the VUD indicator has been mixed since the earnings report.
• If TSLA had reported the same earnings any time in the past, based on historical data, the stock would have rocketed and the VUD indicator would have been solid green.  This indicates that as the market has risen to lofty levels, the momo crowd is exercising less control over the market.  This is of concern because the momo crowd has been running up the market.
• So far, four out of five companies have reported better than expected earnings.  Yet the market is not rocketing up.
• As the earnings season progresses, if earnings are less than expectations, the setup right now is such that it can easily lead to a 7 – 20% correction.
• Investors should remember that earnings are only one of the factors. The liquidity generated by money and excessive borrowing is still here to drive stocks higher irrespective of the earnings.
• Until more earnings are released and technically the market breaks out, investors should be careful especially with any new buying. Please pay attention to the ‘ Protection Bands and What To Do Now?’ below.

Fed Meeting

The Fed meeting starts today.

Copper

We have previously written about Dr. Copper as a barometer of economic activity especially in China and other emerging markets. Copper is showing significant strength.

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  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 $1764, silver futures are at $26.34, and oil futures are $62.60.

S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.

DJIA futures are down 28 points.

OPTIMISM OVER THE BUSIEST EARNINGS WEEK, FOREIGNERS RUSHING INTO INDIA

April 26, 2021

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

The Busiest Week

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

See also  HIGH BANDWIDTH MEMORY BENEFICIARY OF NVIDIA CHIPS BUT MICRON REVERSES, FEDEX HURTS SENTIMENT

Note the following:

• The chart shows that the market is consolidating around the breakout line. This indicates indecision.
• We have previously shared with you that over the coming days, the following will be the prime drivers of the market.
  • Earnings
  • Interest rates
  • Fed policy over tapering
  • Biden borrowing
• This is the busiest earnings week.
• Stocks will move based on the difference between actual reported numbers and projections compared to the whisper numbers.
• Whisper numbers have been moving higher and higher compared to the consensus numbers.
• Consensus numbers are the numbers that analysts publish and become available to the general public.
• Whisper numbers are the numbers that analysts closely guard and share privately with their best clients.

Bitcoin

When bitcoin fell below $50,000 last week, many trend following gurus were predicting a fall to $40,000.  As is often the case, instead of following the gurus, bitcoin did what normally happens in the markets.  Stops under $50,000 were taken out.  Once the stops were cleaned out, bitcoin started jumping.  Once the momentum started to the upside, FOMO (fear of missing out) caused heavy buying. Bitcoin has crossed $53,000 as of this writing.

To add to the legitimacy of bitcoin, JPMorgan (JPM), the most prestigious bank in the country, may offer an actively managed bitcoin fund.

India

India sets a new world record of 352,991 new daily  COVID cases and 2,812 virus deaths.  This is the fifth global record in a row.

India is running into severe oxygen shortages. India’s capital is under lockdown.

How does the stock market in India respond?  It just went up 1.1%.  The Indian market is apparently seeing significant buying from foreigners. The Fed and ECB have created more money than the economy can handle.  This money is looking for places to buy stock.  Foreigners are assuming that the crisis in India will be over soon and the Indian stock market that is already very high will go higher.

To see the buy zone, the best India ETF, and our ratings, please see ZYX Emerging or ZYX Allocation.

Durable Goods

Durable Goods Ex-transportation came at 1.6% vs. 1.6% consensus.

Headline Durable Goods came a 0.5% vs. 2.0% consensus.

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 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 $1776, silver futures are at $26.10, and oil futures are $61.30.

S&P 500 futures resistance levels are 4200, 4318 and 4400: support levels are 4000, 3950 and 3860.

DJIA futures are up 52 points.

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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.