GOLD BREAKS OUT, DISTURBING IPHONE DECLINE, HIGH DEMAND FOR NVIDIA RTX 50, AMAZON OFFERS DEEPSEEK

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By Nigam Arora & Dr. Natasha Arora

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

Gold Breaks Out

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

Note the following:

  • The chart shows gold is breaking out.
  • By giving hundreds of millions of dollars to politicians, crypto lobbyists in the U.S. have succeeded at persuading a leading senator and advisors to the president to advocate that the U.S. government sell the gold stored at Fort Knox.  Central banks of countries such as China are buying gold.  For those who want next level information on gold, there are several podcasts in Arora Ambassador Club.
  • The chart shows unprecedentedly accurate calls by The Arora Report on gold.
    • As shown on the chart, when gold was in the $600 range, the Arora call was to back up the truck and buy gold.
    • As shown on the chart, on the exact day gold topped out in 2011, only hours before the top, The Arora Report call was to sell half of the gold holdings at $1904 with a stop on the remaining at $1757.  The chart shows the gold subsequently lost half of its value.
    • As shown on the chart in 2016, The Arora Report call was credited with the major drop in gold prices.  Business Standard which is like the Wall Street Journal of India wrote, “Arora report creates ripples in bullion market.”
  • Gold is in the ZYX Allocation Model Portfolio.
  • Arora gold ratings have just been updated.  You can access these ratings from the main menu.  These ratings are used by individual investors, money managers, hedge funds, bullion dealers, and jewelers all across the globe.
  • The immediate trigger for a breakout was what we shared in yesterday’s Morning Capsule.  We wrote:

With quantitative tightening, the Bank of Japan (BOJ) has shrunk its balance sheet by $500B.  This move is causing the dollar to weaken.

  • If the dollar drops, gold can fly.
  • President Trump is threatening to impose 25% tariffs on Mexico and Canada tomorrow.  ETFs of interest are EWW and EWC.
  • If Trump actually imposes the tariffs, it will help gold move higher.  On the other hand if Trump backs off, gold’s breakout may fail.
  • The drop in iPhone sales is disturbing.  iPhone sales fell 11% in China.  Overall, iPhone revenues came at $69.1B vs. $71B consensus.  Apple’s (AAPL) CEO did exactly what CEOs do when things go wrong – Apple declared that it had the best quarter ever.  A combination of Apple’s positive spin, a fear that sales could have been even worse , and extreme positive sentiment in the market is driving AAPL stock about 4% higher in the early trade.
  • In addition to AI, gaming is still an important business for Nvidia (NVDA).  The demand for new RTX 50 series GPUs is unprecedented.  At many outlets, the entire RTX 50 series was sold out in minutes.
  • Retail investors are extremely aggressively buying NVDA stock.
  • Institutions who have been selling NVDA stock have stopped selling NVDA stock this morning after a report that Nvidia’s CEO Jensen Huang will meet with President Trump today at the White House.
  • A new signal on NVDA stock from The Arora Report is ahead.
  • The U.S. government is investigating if DeepSeek improperly obtained Nvidia GPUs from Singapore.  How does Amazon (AMZN) respond?  Amazon is now offering DeepSeek to its customers.  Yesterday, we shared with you that Microsoft (MSFT) was starting to offer DeepSeek to its customers.  Even employees at the Pentagon appeared to have been downloading DeepSeek in large numbers before the practice was stopped.  The foregoing shortsighted behavior illustrates why it is so easy for China to keep on marching towards its goal of replacing the U.S. as the next superpower.
  • PCE is the Fed’s favorite inflation gauge.  PCE data came inline with expectations.  Here are the details:
    • Headline PCE came at 0.3% vs. 0.3% consensus.
    • Core PCE came at 0.2% vs. 0.2% consensus.
  • The U.S. economy is 70% consumer based.  For this reason, prudent investors pay attention to personal income and personal spending.  The data indicates that U.S. consumers continue to splurge.  Here are the details:
    • Personal spending came at 0.7% vs. 0.5% consensus.
    • Personal income came at 0.4% vs. 0.4% consensus.
  • 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.
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Magnificent Seven Money Flows

In the early trade, money flows are positive in AAPL, AMZN, MSFT, Alphabet (GOOG), and Meta (META)

In the early trade, money flows are negative in NVDA and Tesla (TSLA).

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.

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 *** 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 ***  in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

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Markets

Interest rates and bonds are range bound.

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 6121 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 up 71 points.

Gold futures are at $2851, silver futures are at $32.68, and oil futures are at $73.02.

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.

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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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Picture of 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.

Picture of 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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