Massive Short Squeeze

Please click here for a 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 moved from below zone 1 (resistance) to near the top band of zone 1 in one day on a massive short squeeze.
  • The chart shows volume was low yesterday on the big move up.
  • RSI on the chart shows the stock market is extremely overbought.
  • The short squeeze was triggered by President Trump's statement that Iran was calling to make a deal.
  • Producer Price Index (PPI) came cooler than expected.  The consensus was based on a spike in energy prices due to the Iran war, but the spike in energy prices has been offset by declining prices in food and trade margins.  Here are the details:
    • Headline PPI came at 0.5% vs. 1.2% consensus.
    • Core PPI came at 0.1% vs. 0.4% consensus.
  • Even though the stock market keeps running up, JPMorgan Chase & Co (NYSE:JPM) is warning of growing risks.  When JPMorgan warns, investors should listen because JPMorgan has a pulse on the economy and has more data than anyone else.
  • Two big banks, JPMorgan and Wells Fargo & Co (NYSE:WFC) reported earnings less than whisper numbers, while Citigroup Inc (NYSE:C) reported earnings better than whisper numbers.  As full disclosure, we are long JPM from an average of $34.14 and long Citigroup from an average of $33.80.
  • Fuel cell technology to power AI data centers has received a vote of confidence.  Oracle Corp (NYSE:ORCL) will buy up to 2.8 gigawatts of Bloom Energy's fuel cell systems to power its AI data centers.  As full disclosure, we are long BE from an average of $118.50.
  • United Airlines Holdings Inc (NASDAQ:UAL) is exploring a merger with American Airlines Group Inc (NASDAQ:AAL). In the past, such a merger would face a major regulatory hurdle, but the Trump administration may be open to it. If it takes place, the merger will form the largest airline in the world.

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 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 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.