Benzinga - by The Arora Report, Benzinga Contributor.
To gain an edge, this is what you need to know today.
Contrasting Moves Please click here for a chart of SPDR S&P 500 ETF Trust (ARCA:SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows that the stock market pulled back to the top band of the top support zone on rising yields.
- This morning the stock market is moving up, bouncing from the support zone on news from the Middle East.
- Prudent investors should notice a statement by Iran’s Foreign Minister Hossein Amirabdollahian in Beirut, Lebanon. He warned that there was a “real possibility” of opening other fronts if Israel continues to intensify the war in Gaza.
- Prudent investors should also pay attention to a statement by Ali Barakeh, a senior Hamas official, that Iran and Hezbollah “will join the battle if Gaza is subjected to a war of annihilation.”
- Of special interest is that the momo crowd aggressively bought stocks on these two statements, while smart money is buying safe havens of dollar, Treasuries, gold, and silver.
- Israel has ordered 1.1M Palestinians living in northern Gaza to evacuate within 24 hours and move to southern Gaza.
- The problem is that Gaza is one of the most densely populated places on Earth. It is very small - only 140 square miles. It appears that there is simply not enough space in southern Gaza for 1.1M more people.
- The United Nations is warning that the evacuation order is “impossible and could result in devastating humanitarian consequences.”
- The momo crowd is aggressively buying stocks on the Israeli evacuation order. Smart money is buying safe havens of dollar, Treasuries, gold, and silver.
- Bank earnings this morning from JPMorgan Chase & Co (NYSE: JPM), Wells Fargo & Co (NYSE: WFC), Citigroup Inc (NYSE: C), and PNC Financial Services Group Inc (NYSE: PNC) are better than expected. Earnings from UnitedHealth Group Inc (NYSE: UNH), the largest healthcare insurer, are also better than expected.
- Prudent investors should note that Jamie Dimon, the CEO of JPM and the most respected banker in the world, is saying in the JPM earnings report that “now may be the most dangerous time the world has seen in decades.”
- In view of the news from the Middle East and Jamie Dimon’s statement, investors should pay attention to money flows in the Magnificent Seven stocks and indexes. Please see the section below.
- In The Arora Report analysis, it is important that investors pay attention to not only what is happening but how the market is responding. Stocks are being bought on trust in market mechanics pushing the stock market higher.
- Some of the buying in the stock market is being triggered by Danish company Novo Nordisk A/S (NYSE: NVO) raising its growth targets due to the popularity of weight loss drugs Ozempic and Wegovy. Eli Lilly And Co (NYSE: LLY) stock is also moving up in sympathy.
- 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.
In the early trade, money flows are positive in SPDR S&P 500 ETF Trust and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).
Momo Crowd And Smart Money In Stocks The momo crowd is aggressively buying stocks in the early trade. Smart money is