By Nigam Arora
To gain an edge, this is what you need to know today.
Next Wave Of Disruptive Technology
Please click here for a chart of Advanced Micro Devices stock (AMD).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of AMD is being used to illustrate the point.
- The chart shows AMD stock has fallen below zone 1 (resistance).
- The chart shows AMD stock is no longer on the steep upward sloping trendline.
- RSI on the chart shows AMD is oversold. Oversold stocks tend to bounce.
- AMD is teaming up with International Business Machines (IBM) to advance quantum computing. AMD is a leader in AI accelerators and high performance computing. IBM is a leader in developing quantum computers. Working together, AMD and IBM could produce fault tolerant quantum computers with real time error correction. The collaboration could result in open source, scalable platforms which would reshape the future of computing.
- In The Arora Report analysis, over the next few years most revenues will be derived from hybrid computing that combines traditional computing with quantum computing. Combining AMD’s high performing CPUs, GPUs, and FPGAs with IBM’s quantum computers will give both companies an edge.
- A fortune is to be made in quantum computing. However, right now hype in the media is far ahead of reality. For those serious about profiting from quantum computing developments, there is a multipart series on quantum computing in Arora Ambassador Club.
- Nvidia’s (NVDA) Jetson AGX Thor developer kit leverages Nvidia’s Blackwell GPUs for next generation physical AI. Nvidia announced general availability of this technology, which can be used in robots for manufacturing, healthcare, retail, agriculture, and transportation.
- We previously shared with you The Arora Report analysis that Nvidia has a path to become an $8T company – the path is not through AI like ChatGPT but through robotics.
- Infineon (IFNNY), a major German semiconductor company, is collaborating with Nvidia to advance humanoid robots that can not only move but can act, sense, and connect securely and safely.
- Durable goods came warmer than expected. Here are the details:
- Durable goods came at -2.8% vs. -3.5% consensus.
- Durable goods ex-transportation came at 1.1% vs. 0.1% consensus.
- Consumer confidence will be released at 10am ET and may be market moving.
- As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Nvidia (NVDA).
In the early trade, money flows are neutral in Apple (AAPL) and Microsoft (MSFT).
In the early trade, money flows are negative in Amazon (AMZN), Alphabet (GOOG), Meta (META), and Tesla (TSLA).
In the early trade, money flows are negative in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
Momo Crowd And Smart Money In Stocks
The momo crowd is *** (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is *** in the early trade.
Note for new members: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling. Over a long period of time, investors come out ahead by adopting smart money’s ways. The exception is in a raging bull market – for very short term trades, consider following the momo crowd and not smart money. Smart money is an important indicator but is only one of hundreds of indicators that go into determining the Arora Protection Band and signals. Please click here and here to understand how signals are generated.
Very Very Short-Term Indicator
The Arora Report’s proprietary very, very short-term early stock market indicator is ***. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Gold
The momo crowd is *** gold in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is *** oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
As a member of The Arora Report you already knew that bitcoin (BTC.USD) whales were taking advantage of retail investor euphoria to sell bitcoin. Whales have continued to sell bitcoin, which has spilled into whales selling other cryptos to retail investors.
For those who want to understand how whales behave in bitcoin, there is a multipart podcast series available in Arora Ambassador Club.
Markets
Interest rates are ticking up, and bonds are ticking down.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
S&P 500 futures are trading at 6450 as of this writing. S&P 500 futures resistance levels are 6500, 6700, and 7000: support levels are 6256, 6131, and 6017.
DJIA futures are down 30 points.
Gold futures are at $3419, silver futures are at $38.41, and oil futures are at $63.72.
Arora Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror. The proprietary Arora Protection Band from The Arora Report is very popular. The Arora Protection Band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash, Treasury bills, short term fixed income, or allocated to short-term tactical trades; and short to medium-term hedges of ***, and short term hedges of ***. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
A protection band of 0% would be very bullish and would indicate full investment with 0% in cash. A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
Traditional 60/40 Portfolio
Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
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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.
