Ceasefire Hopium

Please click here for an enlarged chart of SPDR S&P 500 ETF Trust (NYSE:SPY)which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

  • The chart shows the stock market continues to stay above zone 1 (support).
  • RSI on the chart shows the stock market can easily go either way.
  • On Sunday night, stock futures initially saw selling due to President Trump's ultimatum to bomb power plants and bridges in Iran if no deal is reached.
  • Asian stock markets opened higher on rumors of a ceasefire and the strength seeped into U.S. stock futures.
  • Oil futures continue to be the leading indicator.  Last night, oil futures also opened higher but have continued to pull back as ceasefire hopium builds.
  • In our analysis, as of this writing, the stock market has mostly bought into the prospect of a ceasefire and is ignoring the prospect of escalation.  
  • The jobs report was exceptionally strong.  Here is the data:
    • Non-farm payrolls came at 178K vs. 51K consensus.
    • Non-farm private payrolls came at 186K vs. 51K consensus.
    • Unemployment rate came at 4.3% vs. 4.4% consensus.
    • Average work week came at 34.2 vs. 34.3 consensus.
    • Average hourly earnings came at 0.2% vs. 0.3% consensus.
  • President Trump will hold a press conference with military leaders at 1pm ET.  The press conference may be market moving.  President Trump has extended his deadline for the Iran ultimatum until Tuesday.
  • ISM Non-Manufacturing Index will be released at 10am ET and may be market moving.
  • There is economic data ahead this week:
    • Durable orders will be released Tuesday at 8:30am ET.
    • FOMC minutes will be released on Wednesday at 2pm ET.
    • PCE, the Fed's favorite inflation gauge, as well as personal income and spending, initial jobless claims, and GDP will be released Thursday at 8:30am ET.
    • Consumer Price Index (CPI) will be released Friday at 8:30am ET, followed by University of Michigan Consumer Sentiment at 10am ET.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in 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 neutral in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG).

In the early trade, money flows are mixed in S&P 500 ETF (SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Bitcoin

Bitcoin (CRYPTO: BTC) is seeing buying.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.