By Nigam Arora
To gain an edge, this is what you need to know today.
Iran Hopium Dashed
Please click here for a chart of the oil ETF (USO).
Note the following:
- The chart shows that this morning in the early trade oil ETF USO is rising.
- The chart shows that oil is now at the top band of zone 1 (resistance).
- The chart shows that oil is now at the same level that it was during peak Iran fear during May of this year.
- The chart shows that earlier in September, oil rose above the peak Iran fear level; the reason was that the Chinese came back into the market buying oil.
- The RSI on the chart shows that oil has significant room to rise.
- The Arora Report call from last week is proving spot on. We wrote on September 25, 2026:
In the early trade, there is also bullishness on Iran hopium as oil pulls back. Iran has presented a proposal to the U.S. to resolve the war. In The Arora Report analysis, unless President Trump decides to backtrack from what he has said, the U.S. is unlikely to accept Iran’s conditions.
- The news is that President Trump has rejected Iran’s proposal.
- In the early trade, yields are rising, and bonds are falling due to rising oil prices. In turn, rising yields are bringing pressure on stocks in the early trade.
- In the Arora Report analysis, prudent investors need to be very careful to not be whipsawed. The reason is that President Trump watches the stock market more than any other President in history. President Trump is also an expert at keeping the stock market at elevated levels. All it will take is a statement or a post from President Trump or another administration official, or a report that progress is being made with Iran, for oil to fall again. If oil falls, yields will pull back, and the stock market can rise.
- Investors should consider getting ahead of the curve about two Wall Street mechanics at play this week.
- Expect quarter end window dressing. In window dressing, some money managers buy the best performing stocks and sell underperforming stocks. This way they can show their clients in quarter end reports that they were holding the best performing stocks and not underperforming stocks. In The Arora Report analysis, window dressing is likely to bring buying in Mag 7, semiconductors, and other AI stocks.
- Expect quarter end rebalancing. In The Arora Report analysis, many funds will buy bonds and sell stocks. The reason is that stocks have done well this quarter and bonds have done poorly. Many funds attempt to maintain a certain ratio of stocks to bonds in their portfolios.
- In The Arora Report analysis, money outflows in stocks from rebalancing are likely to be significantly larger than money flows in stocks from window dressing.
- In important news, NVDA is announcing that it is increasing the buyback of its own stock by $150B.
- In the early trade, the fever surrounding CPUs and META Muse appears to be breaking. META stock has been experiencing a buying fever since the announcement of AI Agent Muse. AI agents use CPUs. This has resulted in a buying fever in stocks of companies that make CPUs such as INTC, AMD, QCOM, and ARM.
- 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.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Nvidia (NVDA).
In the early trade, money flows are neutral in Amazon (AMZN), Alphabet (GOOG), Apple (AAPL), and Microsoft (MSFT).
In the early trade, money flows are negative in Tesla (TSLA) and Meta (META).
In the early trade, money flows are negative in S&P 500 ETF (SPY) and 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) 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 the early trade. This is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is *** in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is seeing selling.
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 7778 as of this writing. S&P 500 futures resistance levels are 7900, 7831, 7795; support levels are 7733, 7626, 7541.
DJIA futures are down 246 points.
Gold futures are at $4182, silver futures are at $61.63, and oil futures are at $94.22.
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.
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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.
