Benzinga - by The Arora Report, Benzinga Contributor.
To gain an edge, this is what you need to know today.
Look Ahead Please click here for a chart of VanEck Semiconductor ETF (NASDAQ: SMH).
Note the following:
- Semiconductors are the leading sector. Advances in semiconductors are also at the core of the artificial intelligence revolution. Therefore prudent investors always pay attention to semiconductors.
- The chart shows a decisive up move in semiconductors after the breakout.
- RSI on the chart shows semiconductors are very overbought. Overbought markets tend to be vulnerable to the downside.
- Market mechanics are very powerful and have been the primary force driving the stock market higher. The chart of semiconductors illustrates the sharp move up since the end of October. The easiest way to learn about market mechanics is to listen to the podcasts in Arora Ambassador Club. Due to their high value, Wall Street professionals keep market mechanics secret. There is very little credible and useful information available publicly.
- Market mechanics that have been driving the stock market higher are going to end no later than December 29, 2023.
- The smartest of smart money recognizes that these market mechanics are going to end, so they start acting before the market mechanics end. Momo crowd is always oblivious, and the smartest of smart money simply takes advantage of the momo crowd.
- New market mechanics will start on January 2, 2024.
- Here are some of the steps that may need to be taken prior to the end of the year or immediately after the new year starts.
- Raising hedges
- Raising cash
- Taking profits on tactical positions
- This is simply a heads up. We will provide more guidance as more data becomes available.
- In The Arora Report analysis, the start of the new year will likely be the same as every other new year after a strong year for the stock market — if the stock market starts going down, everyone will jump on the selling bandwagon; if the stock market starts going up, everyone will buy. If the stock market starts going down, there will be additional selling pressure from selling by those who want to sell stocks but are postponing the selling to 2024 for tax reasons.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Building permits came at 1.46M vs. 1.46M consensus.
Magnificent Seven Money Flows In the early trade, money flows are positive in Apple Inc (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class C (NASDAQ: GOOG), Meta Platforms Inc (NASDAQ: META), Microsoft Corp (NASDAQ: MSFT), NVIDIA Corp (NASDAQ: NVDA), and Tesla Inc (NASDAQ: TSLA).
In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (ARCA:SPY) and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).
Momo Crowd And Smart Money In Stocks The momo crowd is buying stocks in the early trade. Smart money is