By Nigam Arora
To gain an edge, this is what you need to know today.
U.S. Vs. China
Please click here for a chart of Intel stock (INTC).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of INTC stock is being used to illustrate the point.
- The chart shows INTC stock has jumped about 30% on the news that Nvidia (NVDA) will invest $5B in Intel and co-develop chips.
- The chart shows that INTC stock has broken out.
- The chart shows INTC stock is nearing zone 2 (resistance).
- RSI on the chart shows INTC stock is overbought. Overbought stocks are susceptible to a pullback.
- The chart shows the Arora buy zone helped investors to accumulate INTC stock near the lows. The chart also shows the Arora signal to take advantage of the 30% jump today to take partial profits. The Arora Report methodology provides the optimum combination of letting profits run over the very long term, tactically taking advantage of opportunities to book partial profits, trade around positions, short term trades, and dynamic hedging.
- Nvidia and Intel have partnered to co-develop many generations of data center and PC products. Intel will build custom CPUs and Nvidia will integrate them into its AI platforms. Additionally for personal computers, Intel will build circuits integrating Nvidia hardware.
- Earlier this year, we shared with you Chinese tech company Huawei was taking market share from Apple (AAPL) in the smart phone market in China. Huawei is now challenging Nvidia. Huawei announced a new supernode computing cluster for AI that completely bypasses Nvidia’s chips.
- In The Arora Report analysis, Huawei’s roadmap and Nvidia’s investment in Intel sets up the contour of how the U.S. and China are on a path to develop separate ecosystems for AI.
- In The Arora Report analysis, these developments are negative for Advanced Micro Devices (AMD). AMD will face stiffer competition from both Intel and Nvidia. The increased competition will be on multiple fronts including PCs.
- In The Arora Report analysis, these developments are also negative for Taiwan Semiconductor (TSM). Taiwan Semiconductor has been manufacturing Nvidia chips. Now Taiwan Semiconductor will face real competition from Intel.
- In The Arora Report analysis, after the rate cut yesterday, the stock market is now discounting five more interest rate cuts – two this year and three next year. The political pressure from President Trump may indeed result in five or more cuts. Prudent investors need to be concerned that inflation is still above the 2% target, running around 3%. Rate cuts have the potential to stoke inflation.
- Initial jobless claims came at 231K vs. 245K consensus.
- Leading indicators will be released at 10am ET and may be market moving.
- As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.
U.K.
The Bank of England (BOE) left interest rates at 4% and is taking a cautious stance of future rate cuts.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Amazon (AMZN), Alphabet (GOOG), Nvidia (NVDA), and Tesla (TSLA).
In the early trade, money flows are neutral in Apple (AAPL), Microsoft (MSFT), and Meta (META).
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. Smart money is an important indicator but is only one of hundreds of indicators that go into determining the Arora Protection Band and signals. Please click here and here to understand how signals are generated.
Very Very Short-Term Indicator
The Arora Report’s proprietary 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
The momo crowd is *** in oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is seeing buying.
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 6687 as of this writing. S&P 500 futures resistance levels are 6700 and 7000 : support levels are 6500, 6256, and 6131.
DJIA futures are up 20 points.
Gold futures are at $3691, silver futures are at $42.05, and oil futures are at $63.58.
Arora Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror. The proprietary Arora Protection Band from The Arora Report is very popular. The Arora 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.
To take a free 30-day trial to paid services to gain access to more opportunities, please click here.
This post was just published on ZYX Buy Change Alert.
Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 1% of the content from our paid services. …TO RECEIVE REMAINING 99%, INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES AND SIGNALS IN REAL TIME, TAKE A FREE
TRIAL TO PAID SERVICES.
The Arora Report is one of the only major global investment newsletters that does not employ a single salesperson—because it does not need to. While competitors rely on high-pressure sales tactics, The Arora Report grows purely through results, with satisfied members recommending it to their family and friends.
Join the service that investors trust the most and recommend to family and friends.
Please click here to take advantage of a FREE 30 day trial.
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.
