LEADING INDICATORS DETERIORATE BUT MARKET MECHANICS RULE THE PRICE ACTION

By?Nigam Arora?& Dr. Natasha Arora

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

Leading Indicators Deteriorate

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

Note the following:

• The chart shows that the stock market opened lower.
• In the Morning Capsule, we shared with you that there was selling due to lower than expected Tesla (TSLA) gross margins, Fed speak, and delayed reaction to the Beige Book.
• The chart shows that the momo crowd aggressively bought the dip.
• The chart shows when leading economic indicators were released.??Leading economic indicators came at -1.2% vs. -0.4% consensus. The interpretation is that the economy is likely to become worse than expected by a majority of analysts.??
• In theory, the stock market should have fallen on worse than expected leading economic indicators, but as the chart shows, the momentum from momo crowd buying was so strong that the stock market continued higher.
• Aggressive 0DTE call buying also contributed to the stock market going higher.
• Option expiration is Friday.?Option expiration appears to be on the downside.?As the momentum turned down on option related activity, 0DTE option buying turned to the put side, exaggerating the move lower.
• Just like Wednesday, the main driving force after the market opened today has been market mechanics.?To gain an edge, all investors, including long term investors, should understand market mechanics.?Please listen to the podcasts titled “Market Mechanics: Positioning” and “Market Mechanics: Understand Zero-Day Options To Gain An Edge.”
• 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 mixed.

See also??WEEKLY STOCK MARKET DIGEST: HOPE SPRINGS ETERNAL FOR A WEAK JOBS REPORT ON A HOLIDAY

Money Flows

The momo crowd money flows since the Morning Capsule are ?? (To see the locked content, please take a 30 day free trial).

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

There appear to be sell on close orders.

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

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

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

Buy Zones And Buy Now Ratings

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Nibbling

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This post was published yesterday in?The Arora Report paid services.?Since then the Morning Capsule has had an update in the paid services.

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See also??STOCK MARKET BUYING AS CLASSIC RATE CUT SIGNAL TRIGGERED

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