Market Positioning

Please click here for an enlarged chart of VanEck Oil Services ETF (NYSE:OIH).

Note the following:

  • The chart shows the rise in OIH on the Iran war.
  • Oil service stocks are the main beneficiaries, not only from the rise in oil but also from the destruction of energy infrastructure.  Ultimately, destroyed energy infrastructure will be rebuilt, benefiting oil service stocks.
  • As full disclosure, OIH is in our portfolio.
  • The chart shows recent partial profit taking signals near the recent high.
  • The chart shows a pullback in OIH.  This pullback in OIH indicates that the stock market is now positioned for the resolution of the Iran war, not an escalation.
  • Including many other factors, in addition to OIH, in our analysis, right now the stock market positioning is bullish.  
  • This morning, bullish positioning is confronting President Trump's post ahead of the 8pm ET deadline for Iran to reach a deal.  President Trump posted, "A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will. However, now that we have Complete and Total Regime Change, where different, smarter, and less radicalized minds prevail, maybe something revolutionary wonderful can happen, WHO KNOWS? We will find out tonight, one of the most important moments in the long and complex history of the World. 47 years of extortion, corruption, and death, will finally end. God Bless the Great People of Iran!"
  • Only President Trump and perhaps his inner circle know what is going to happen next.  If there is a de-escalation, the stock market will rally.  On the other hand, if there is escalation, due to positive positioning, the stock market can move significantly to the  downside.  In our analysis, the stock market is not prepared for the downside.  
  • Any of the following three scenarios occur:
    • If President Trump escalates and Iran is able to retaliate in a meaningful way, there is significant downside risk to this market. 
    • If President Trump escalates and Iran is not able to retaliate, the stock market will likely go up. 
    • If there is a deal reached without escalation, the stock market will likely go up.  
  • Durable orders data is mixed.  Here are the details:
    • Durable orders came in at -1.4% vs 0.5% consensus.
    • Durable orders ex-transportation came at 0.8% vs 0.5% consensus.

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 negative 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 negative in SPDR S&P 500 ETF Trust (NYSE: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 range bound.

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.