By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Running On 50 bps Rumor
Please click here for a chart of gold ETF (GLD).
Note the following:
- The chart shows when gold broke out back in March.
- The chart shows a new breakout in gold. Gold is hitting an all time high.
- The chart shows that the breakout is on higher volume. This shows conviction.
- RSI on the chart shows that gold is approaching the overbought level but is not yet there.
- The chart shows the support zone. How gold reacts if it pulls back into the support zone will be a tell.
- Long time members of The Arora Report have very large gains in gold. The Arora Report’s track record on gold is unmatched. The Arora Report gave a signal to back up the truck and buy gold when gold was in the $600 range. When gold reached $1904 in 2011, The Arora Report gave a signal to sell half of gold holdings and put a stop on the remaining gold at $1757. Gold topped out on the same day that The Arora Report gave a sell signal and fell to about $1000. During the fall in gold, members of The Arora Report made a lot of money by short selling gold. The Arora Report signals caught the bottom in gold and have since been mostly bullish.
- Due to positioning, gold can go much higher. Positioning is an important Wall Street mechanic. Learning about Wall Street’s mechanics gives investors several big edges. For investors, it is often difficult to learn about Wall Street mechanics because Wall Street professionals keep the nuances close to the chest due to their very high value. Members of The Arora Report can easily learn Wall Street mechanics by listening to podcasts in Arora Ambassador Club. There are also several podcasts on gold in the club. To get on the waitlist, please click here to fill out the form.
- Gold ETF GLD is in the ZYX Allocation Model Portfolio. Silver ETF SLV and gold miner NEM are in ZYX Buy Core Model Portfolio.
- In The Arora Report analysis, the latest breakout in gold is due to a rumor of a 50 bps interest rate cut taking hold. If the Fed does not cut by 50 basis points, there may be a pullback in gold. A pullback will be a buying opportunity.
- The same 50 bps cut rumor drove stocks, especially AI stocks, higher yesterday.
- Among earnings of note, Adobe (ADBE) earnings were below whisper numbers as it is taking longer for Adobe’s AI products to gain traction compared to expectations in the market. Also of note are earnings from RH (RH), the high end home furnishing company. RH earnings show that the consumer at the high end is resilient and spending.
- 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) and Alphabet (GOOG).
In the early trade, money flows are neutral in Amazon (AMZN) and Nvidia (NVDA).
In the early trade, money flows are negative in Microsoft (MSFT), Meta (META), and Tesla (TSLA).
In the early trade, money flows are positive 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.
Gold
The momo crowd is *** gold in the early trade. Smart money is *** gold 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 *** oil in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is range bound.
Markets
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.
Interest rates are ticking down, and bonds are ticking up.
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.
Gold futures are at $2594, silver futures are at $30.54, and oil futures are at $70.06.
S&P 500 futures are trading at 5613 as of this writing. S&P 500 futures resistance levels are 5622, 5748, and 5926: support levels are 5500, 5400, and 5256.
DJIA futures are up 106 points.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash or Treasury bills 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.
