The stock market today is controlled by the momo (momentum) crowd. The only thing the momo crowd cares about is momentum. What if you are not a sheep in the momo crowd? What if you are a prudent investor? What should you do?
One of the best tools is to look at the X-rays of popular stocks in the form of segmented money flows. Money flows provide an edge to investors who want to beat the broader market and lower their risks. Let’s explore by looking at money flows with the help of a chart.
Please click here for the annotated chart of money flows in 11 popular technology stocks. As a group, these stocks have outperformed the Dow Jones Industrial Average DJIA, S&P 500 SPX, and Nasdaq 100 NDX.
Please observe the following from the chart:
• Momo crowd money flows are extremely positive in Amazon AMZN. In contrast, flows of the smart money (professional investors) are neutral, as shown on the chart.
• Momo crowd money flows are only mildly positive in Microsoft MSFT, even though the gurus are aggressively promoting it.
• Momo crowd money flows are very positive in Facebook FB, as shown on the chart. Smart money flows are mildly positive in Facebook.
• Smart money flows are mildly positive in Apple AAPL, but momo crowd money flows are extremely positive. Please see “Apple stock’s next milestone is $250 as the company makes a crucial transition.”
• Among semiconductor stocks, momo crowd money flows are extremely positive in AMD AMD, and positive in Nvidia NVDA; they are negative in Intel INTC.
• Momo crowd money flows are extremely positive in Tesla TSLA, as short-sellers are getting squeezed.
• Momo crowd money flows are positive in Alibaba BABA, considered the Amazon of China in spite of a bear market in Chinese stocks. We shared with our subscribers in the Morning Capsule that Chinese stocks staged the biggest rally in two years. However, this is likely a bear market rally from a very oversold condition.
• Momo crowd money flows are positive in Alphabet (Google) GOOG, GOOGL, but smart money flows are very positive….Read more at MarketWatch.
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