STOCK MARKET EXCITED BY AI NEWS AND COOLER PRODUCER INFLATION

Editor’s Note:

This is the Afternoon Capsule that was provided before big bank earnings were released.  Bank earnings were released this morning.  To see the latest, please see the Morning Capsule that is available to paying subscribers.  The Morning Capsule is issued every morning before the market open.

To gain an edge, this is what you need to know now.

AI Excitement

Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

• The chart shows when PPI and jobless claims were released.  PPI came cooler than expected and initial jobless claims data showed the strength in the employment picture is waning.  Please read the Morning Capsule for details.
• The chart shows there has been steady and persistent buying since the release of economic data this morning.
• Investors are excited that inflation is coming down.  Investors are also excited about the prospects of artificial intelligence.
  • Especially helping today, Amazon (AMZN) announced CodeWhisperer, an AI coding companion that helps developers write AI code without the need to leave their IDE to research.
  • Amazon is also announcing Bedrock.  Bedrock facilitates building generative AI apps with pre-trained models from companies such as Stability AI, Anthropic, and AI21 Labs.
  • Amazon has also launched an AI accelerator and is working with Nvidia (NVDA) to build infrastructure for training AI models.
  • At The Arora Report, we will be carefully analyzing how customers respond to Bedrock vs. Microsoft’s (MSFT) ChatGPT vs. Google’s (GOOG) Bard.
    • Right now customers are flocking to Microsoft’s Azure to take advantage of ChatGPT.
• In the Morning Capsule, we shared with you:

This is exactly what the Fed has been trying to achieve.  The Fed is succeeding.  In the long term, this is a positive for the stock market.

• The momentum from momo crowd buying further fueled the stock market rally, pushing the S&P 500 through the resistance zone.
• Momo gurus used the breakout as another reason to persuade their followers to continue to buy stocks.
• The chart shows when the Treasury auction results were released.  The auction was good.  Here are the results:
  • $18B 30-year Treasury bond reopening
  • High yield: 3.661% (When-Issued: 3.661%)
  • Bid-to-cover: 2.36
  • Indirect bid: 69.1%
  • Direct bid: 19.8%
• There is aggressive buying of 0DTE options.  Most of the buying is on the call side.  This is further pushing the stock market to the upside.  It is important for all investors, including long term investors, to understand the impact of 0DTE on the stock market.  Please listen to the podcast title “Market Mechanics: Understand Zero-Day Options To Gain An Edge.”
• The VUD indicator is the most sensitive measure of net supply demand in real-time. The orange represents net supply and the green represents net demand.
• The VUD indicator is mostly green, indicating net demand for stocks.
• Several big banks will report earnings Friday morning.
• As we have been sharing with you, in The Arora Report analysis, Wall Street earnings estimates are too high.

Money Flows

The momo crowd money flows since the Morning Capsule are 🔒 (To see the locked content, please take a 30 day free trial).

Smart money flows since the Morning Capsule are 🔒.

Short squeeze money flows are 🔒.

A Special Note To New Subscribers

Note the smart money behavior.  Smart money tends to sell into strength on strong up days.

New subscribers should consider adopting smart money’s way of investing and trading.

Sentiment

Sentiment is 🔒.

Sentiment is a contrary indicator at extremes.  In plain English, this means that when sentiment becomes extremely positive it is time to sell and when sentiment becomes extremely negative it is time to buy.

Close

There appear to be buy on close orders.

There is merit to watching the pattern of market on close orders as they represent the day’s dominant net cumulative activity by many professionals and funds.

Gold

The momo crowd money flows in gold are 🔒 since the Morning Capsule.

Smart money flows are 🔒 in gold since the Morning Capsule.

Oil

The momo crowd money flows in oil are 🔒 since the Morning Capsule.

Smart money flows in oil are 🔒 since the Morning Capsule.

Buy Zones And Buy Now Ratings

Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE THE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE TRIAL TO PAID SERVICES.

Please click here to take advantage of a FREE 30 day trial.

Nigam Arora

Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.

Dr. Natasha Arora

Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.