Stocks rise on triple witching, oil slump and Fed hopes
U.S. stocks are higher in early trade as triple witching approaches, oil falls and investors focus on rate-cut hopes. The piece also cites stronger AI-related money flows, softer housing data and mixed macro prints.
Triple Witching 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 that yesterday the stock market fell below the low band of zone 2 (support) before recovering to close at the low band of zone 2. The chart shows that this morning the stock market is jumping and has already reached the upper band of zone 2. The jump this morning is coming for three reasons: Triple witching is tomorrow.
In triple witching, stock index futures, options on indexes, and options on stocks expire on the same day. Triple witching appears to be to the upside. President Trump said he has directly spoken to Iranians. President Trump’s comment is bringing oil lower.
President Trump is expected to meet Gulf leaders in New York on Tuesday. Previously, momo gurus were urging their followers to buy stocks because they claimed to know that Fed Chair Warsh would go for a dovish rate hike. As usual, momo gurus were wrong. The rate hike was not dovish.
Yesterday, the stock market reacted negatively. Momo gurus are on the job with a new narrative to run up the stock market. The new narrative is that they know for sure that there will not be many rate hikes in the future. Buying is especially strong in AI stocks.
Of note is new data from CoreWeave Inc (CRWV) and Nebius Group NV (NBIS) that compute prices are going higher. In our analysis, higher prices may support current valuations. Initial jobless claims came at 196K vs. 209K consensus.
This shows the jobs picture remains well behaved. Housing Housing is becoming weaker as interest rates rise. 275M vs. 325M consensus.
394M vs. 410M consensus. K. In spite of the Fed and European Central Bank (ECB) raising rates, the Bank of England (BOE) decided to leave its key interest rate unchanged.
However, BOE is signaling that it is open to future rate hikes. K. 1% year-over-year vs. BOE target of 2%.
Eurozone Inflation in the eurozone came as expected. 4% month-over-month vs. 4% consensus. 2% month-over-month vs.
2% 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. com, Inc.
(AMZN), Alphabet Inc Class C (GOOG), Meta Platforms Inc (META), Microsoft Corp (MSFT), NVIDIA Corp (NVDA), and Tesla Inc (TSLA). In the early trade, money flows are positive in S&P 500 ETF (SPY) and Invesco QQQ Trust Series 1 (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 (USO). Bitcoin Bitcoin (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.
Disclaimer: This article is from an unpaid external contributor. It does not represent ’s reporting and has not been edited for content or accuracy.