GOLD AT AN INFLECTION POINT – IGNORE PERMABULLS AND CRYPTO BROS, STOCK BULLS DISBELIEVE NEW DATA

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By Nigam Arora & Dr. Natasha Arora

To gain an edge, this is what you need to know today.

Inflection Point

Please click here for a chart of gold ETF (GLD).

Note the following:

  • The chart shows that gold has staged a strong rally.
  • The chart shows Arora signals including the famous signal to sell half of the gold position on the exact day gold topped in 2011.  Long time members of The Arora Report have made a fortune from our gold and silver calls.
  • Perma gold bulls, also known as gold bugs, are coming out of the woodwork proclaiming that this is it for the big gold move they have been waiting for.
  • Prudent investors should consider ignoring perma gold bulls.  Perma gold bulls tend to strongly believe in conspiracy theories of central banks colluding with large commercial banks to keep gold and silver low.  Many times the prominent perma gold bulls have a vested interest because they are in the business of selling gold and silver to the masses.
  • In The Arora Report analysis, here are the key data points investors should focus on:
    • Gold has traced a 10 year cup as shown on the chart.
    • Now, gold is in the process of tracing a multi-year handle.
    • Cup and handle patterns tend to break to the upside.
    • When an upside break occurs from a long pattern, it can be extremely powerful, leading to large gains.
    • As shown on the chart, gold is now in the resistance zone.
    • The chart shows that the prior three attempts to break out of this resistance zone failed.  Will the fourth time be a charm?
    • Thank you for your requests for a new podcast on gold.  The evidence from our decades of experience with thousands of investors is clear.  Those who take time in advance to prepare tend to generate significantly higher profits than those who do not.  We will start work on the podcast to help members prepare in case there is a breakout.  The podcast will be in Arora Ambassador Club.
  • Crypto bros are predicting that this gold up move will fail.  Crypto bros have a strong interest in promoting gold as antiquated, and they want to sell the masses on the idea that crypto is the new gold.
  • You can access world famous Arora ratings on gold and silver from the top menu.  These ratings are used by private investors, hedge funds, bullion dealers, and major jewelers.  At times, Arora gold calls have impacted gold prices.  Click here to see an article in Business Standard, the Wall Street Journal of India, for the article “Arora Report Creates Ripples In Bullion Market.”
  • The gold ETF GLD buy zone is in the ZYX Allocation Core Model Portfolio. The buy zones for silver ETF SLV and gold miner NEM are in the ZYX Buy Core Model Portfolio. NEM was the best performing stock in the S&P 500 yesterday.
  • In the stock and bond markets, permabulls are disbelieving the new data just released.  The new data is the GDP – Second Estimate.  GDP came at 5.2% vs. 4.9% consensus.
  • In The Arora Report analysis, as hard as they may try, here is a question that permabulls are unable to answer.  Why is the Fed going to cut rates with the economy growing at 5.2%?  Permabulls are convinced of a Fed rate cut in Q1 of 2024.  With the economy growing at 5.2%, there is no logical reason for the Fed to cut rates.  The only reason for the Fed to cut rates will be if the economy quickly falls off the cliff.
  • Prudent investors need to keep in mind that permabulls do not need to do a 360 degree analysis because their job is to push the stock market as high as they can.  Before you send us emails, the long standing Arora Report position is to ignore both permabulls and permabears.  Instead, prudent investors should connect the data points.
  • The Fed’s Beige Book will be released at 2pm ET.
  • 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.
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Magnificent Seven Money Flows

In the early trade, money flows are positive in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).

In the early trade, money flows are positive 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.

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

OPEC+ meeting is ahead.

API crude inventories came at a draw of 0.817M barrels vs. a consensus of a draw of 2M 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 with a positive bias.

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 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.

Gold futures are at $2061, silver futures are at $25.40, and oil futures are at $77.54.

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S&P 500 futures are trading at 4584 as of this writing.  S&P 500 futures resistance levels are 4600, 4713, and 4770: support levels are 4460, 4400, and 4318.

DJIA futures are up 98 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.

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.

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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 seven 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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This post was just published on ZYX Buy Change Alert.

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Nigam Arora

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

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.

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