By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Doctor Copper
Please click here for a chart of copper ETF (CPER).
Note the following:
- Copper is known as Doctor Copper because historically copper has been a good indicator of the global economy. However, this time it is different because the move in copper is due to President Trump’s policies.
- The chart is a monthly chart to give you a long term perspective.
- The chart shows that copper is hitting a new high.
- The up move over the last month is due to the threat of US tariffs.
- President Trump instructed the Commerce Department to look into copper tariffs on February 25th and produce a report within 270 days. It appears now that the Commerce Department is ready with the report.
- In The Arora Report analysis, copper tariffs may come within weeks, much earlier than expected.
- Copper futures on Comex hit a record of $5.37 per pound.
- Copper is important because the demand has been rising due to its use in AI data centers, electric vehicles, and more power production.
- In anticipation of tariffs, copper traders are importing huge amounts of copper into the United States.
- The largest publicly traded copper producer by market cap is Freeport-McMoRan Inc (FCX). FCX is in the ZYX Buy Core Model Portfolio. In the Portfolio that surrounds the ZYX Buy Core Model Portfolio, there is another copper position in First Quantum Minerals Ltd (FQVLF). FQVLF is also a buyout target. Earlier this morning, The Arora Report gave a new signal on copper producer Taseko Mines Ltd (TGB) due to its Florence Copper Project in Arizona; as of December 2024, the project was 56% complete. Being in the United States, Florence Copper Project will benefit from tariffs. The signal was given in ZYX Buy.
- Another big use of copper is in housing. If there is a recession, copper demand from housing will fall.
- Prudent investors should take a global perspective. China is the biggest consumer of copper.
- Consumer confidence fell to a four year low. Consumer confidence came in at 92.9 vs 93.5 consensus. As a reference, consumer confidence was 100.1 in February. A number below 80 is an indication of a recession.
- Durable orders data is strong.
- Durable orders came in at 0.9% vs -1.2% consensus.
- Durable orders – ex transport came at 0.7% vs 0.1% consensus.
- Market mechanics continue to be in control of the stock market. Please see the prior Morning Capsule for details.
- 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 Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT).
In the early trade, money flows are negative in Meta (META), Nvidia (NVDA), Alphabet (GOOG), and Tesla (TSLA).
In the early trade, money flows are neutral in S&P 500 ETF (SPY) and negative 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.
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 *** gold in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
Oil inventory data from API came at a draw of 4.6M barrels vs a consensus of a draw of 2.5M barrels. This data is bullish in the short term and bringing in buying. However, prudent investors should note that there is a counter balance — the US and Russia have reached a deal on a ceasefire in the Black Sea. The US is also likely to work to reduce or eliminate sanctions on Russian oil.
There are signals in oil in inverse oil ETF (SCO) in ZYX Buy and oil ETF (USO) in ZYX Short.
EIA oil inventory data is considered more authoritative. This data will be released at 10:30am ET.
The momo crowd is *** oil in the early trade. Smart money is *** oil in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is range bound.
Markets
Interest rates are ticking up, and bonds are ticking down.
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 5830 as of this writing. S&P 500 futures resistance levels are 5926, 6017, and 6131: support levels are 5748, 5622, 5500.
DJIA futures are up 58 points.
Gold futures are at $3030, silver futures are at $34.37, and oil futures are at $69.57.
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.
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This post was just published on ZYX Buy Change Alert.
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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.
