By Nigam Arora
To gain an edge, this is what you need to know today.
NAND Mania
Please click here for a chart of Chevron (CVX).
Note the following:
- The chart shows that on the morning of January 5th, Chevron (CVX) traded as high as $172 in the premarket. In the overnight trading on Sunday, Chevron traded even higher. The chart shows that as of this writing, Chevron has pulled back to $157.64. Earlier, Chevron stock was even lower. As the chart shows, Chevron stock has moved up on the news that Chevron is teaming up with a private equity firm to buy the international assets of Lukoil, a big Russian oil producer.
- The chart shows a big spike up at the premarket open on January 5th.
- The buying in Chevron was the result of heavy pumping by momo gurus over the weekend, urging their followers to load up on Chevron in the overnight trading.
- The chart shows that The Arora Report’s proprietary VUD indicator was warning against buying Chevron. The chart shows the VUD indicator was consistently orange. The proprietary VUD indicator is the most sensitive real time indicator of supply and demand. Green indicates net demand, and orange indicates net supply.
- On January 5th 2026, the Morning Capsule identified Chevron as a winner from developments in Venezuela, we wrote:
Chevron is the only major U.S. oil company operating in Venezuela and controls about 25% of Venezuela’s oil production.
- The Arora Report gave signals on several stocks and an ETF on Venezuela development, but did not give a signal on Chevron, and we wrote:
Unlike the momo crowd, prudent investors should control the FOMO (fear of missing out) emotion. Prudent investors should focus on signals when they are given by the proven ZYX Change Method with a long track record. Prudent investors should also consider buying in the Arora buy zones and also have access to proper position sizes, stop zones, and target zones. New signals will be given as appropriate.
- We received many inquiries from members as to why The Arora Report did not give a buy signal on Chevron. Some of the reasons were already explained in the January 5th Morning Capsule. Prudent investors should note that, as important as it is to buy the right positions, it is also important not to buy the wrong position into euphoria, where the ZYX Change Method indicates the high probability of a fade. Now, with the benefit of hindsight, The Arora Report call to not buy Chevron on the morning of January 5th has proven spot on.
- A NAND memory mania has been triggered by Nvidia (NVDA). Nvidia CEO Jensen Huang said, “With existing high-bandwidth memory (HBM), it’s far from sufficient to support GPUs, and the memory bottleneck is only getting worse,” and explained the concept of a ‘new memory storage platform.’ The new concept uses NAND memory. The market interpreted this as using solid-state disk drives (SSD). A buying mania is occurring in the stocks of Micron Technology (MU), SanDisk (SNDK), Western Digital (WDC), and Seagate Technology (STX). MU is long from an average of $21.77 in ZYX Buy. It is trading at $338.92 as of this writing. This represents a gain of 1456%.
- There are many implications for investors of the Rubin platform architecture. For those wanting next-level information for investors on this subject, in due course, there will be podcasts in Arora Ambassador club.
- In the stock market, the Dow Jones Industrial Average (DJIA) has just experienced the biggest gain in 23 years in the first three days of a new year. For the last three days, the rise in DJIA has been 2.9%. The last time it gained more was 5.2% in 2003.
- ADP is the largest private payroll processor in the United States. ADP uses its data to give an advance glimpse of jobs picture ahead of the official Jobs Report that will be released on Friday. ADP employment change came in at 41K vs 45K consensus.
- The Supreme Court may potentially announce a decision on tariffs on Friday. The decision if announced, will likely be market moving, especially if the Supreme Court rules against President Trump. The consensus in the stock market is that the Supreme Court will find a way to support President Trump.
- Venezuela will sell 50M barrels of oil to the United States and its allies. Normally, this oil would have gone to China. The most important point here is that the sale will occur in dollars. Venezuela was selling to China in yuans. For the dollar to remain king dollar, it is extremely important that oil keeps on trading in dollars.
- 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
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are neutral in Tesla (TSLA), NVDA, Alphabet (GOOG), and Amazon (AMZN).
In the early trade, money flows are negative in Apple (AAPL), Meta (META), and Microsoft (MSFT).
In the early trade, money flows are mixed in S&P 500 ETF (SPY) and in 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 *** in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is range bound.
Markets
Interest rates are ticking down, and bonds are ticking up.
The dollar is range bound.
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 6988 as of this writing. S&P 500 futures resistance levels are 7200 and 7000: support levels are 6780, 6500, and 6256.
DJIA futures are up 72 points.
Gold futures are at $4459, silver futures are at $77.34, and oil futures are at $56.95.
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.
