By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
AI Model Competition
Please click here for a chart of ASML stock (ASML).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of semiconductor manufacturing equipment company ASML stock is being used to illustrate the point.
- The chart shows the gap up in ASML stock on release of earnings. ASML surged as it reported earnings and booking orders double expectations on AI related demand.
- RSI on the chart shows that ASML has bounced back from oversold conditions.
- The chart illustrates a very important point that we have been impressing upon investors regarding AI – a fortune is to be made in AI; it will not be in a straight line, and at times will be treacherous. The chart shows that in the AI frenzy, the stock has traded as high as $1105.46. Even though ASML is reporting record revenues on AI demand and the stock is up $36 as of this writing, the gap up is a mere blip on the chart.
- ASML is important because ASML has a near monopoly on extreme ultraviolet lithography equipment. Without ASML equipment, advanced Nvidia (NVDA) chips could not be produced and there would be no AI. A more diversified semiconductor equipment manufacturer is Applied Materials (AMAT). AMAT is in the ZYX Buy Core Model Portfolio, long from $16. This represents a gain of 1007% for long time members of The Arora Report.
- We have been awaiting an opportunity to add ASML to the portfolio. A signal will be given when the stringent criteria of the ZYX Change Method are met.
- OpenAI’s data may have been used to train DeepSeek without authorization. Microsoft (MSFT) and Open AI are investigating.
- Data from Meta’s AI model also appears to have been used in DeepSeek.
- For those wanting next level information for investors about the impact of DeepSeek, we are starting work on a podcast. The podcast will be in Arora Ambassador Club. The get on the waitlist to join Arora Ambassador Club, please click here to fill out the form.
- Chinese e-commerce giant Alibaba (BABA) has introduced an AI model that is better than both OpenAI’s model and DeepSeek’s model.
- In a boost for Elon Musk, Apple (AAPL) is working with T-Mobile (TMUS) to provide Starlink on iPhones. T-Mobile is also reporting blowout earnings, the best ever to start a new year. TMUS is in the ZYX Buy Core Model Portfolio. TMUS came to the portfolio at an average price of $12.54 when Arora Portfolio company MetroPCS was bought out and the Arora call was to hold TMUS stock. To date, 201 Arora Portfolio companies have been bought out. Long time members of The Arora Report have a 1791% gain on TMUS.
- The FOMC rate announcement will be made at 2pm ET, followed by Powell’s press conference at 2:30pm ET.
- In The Arora Report analysis, the data does not support a rate cut. We will be carefully listening to Powell’s press conference for clues on what the Fed may do in the March 18 – 19 meeting.
- Prudent investors need to know that bond traders are putting on big positions betting that a big bond rally is about to start. If bond traders are right, a bond rally will be positive for stocks. However, keep in mind that in The Arora Report analysis, a big bond rally is not the highest probability scenario.
- Important earnings ahead today include Microsoft, Meta (META), and Tesla (TSLA). We will be carefully listening to the conference calls for clarity on capital expenditure plans after DeepSeek.
- In The Arora Report analysis, today may be a high volume day in the markets, which can bring volatility.
- The data indicates that consumer confidence is beginning to pullback.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band. The 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 Amazon (AMZN), Alphabet (GOOG), and META.
In the early trade, money flows are negative in AAPL, NVDA, MSFT, and TSLA.
In the early trade, money flows are neutral 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.
Very Very Short-Term Indicator
Our 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 *** in gold in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
API crude inventories came at a build of 2.86M barrels vs. a consensus of a build of 3.7M barrels.
The momo crowd is *** oil 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 stronger.
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 6086 as of this writing. S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are down 52 points.
Gold futures are at $2774, silver futures are at $31.15, and oil futures are at $73.25.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror. The proprietary protection band from The Arora Report is very popular. The 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.

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.