By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Noisy Jobs Report
Please click here for a chart of / S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows that the stock market is in the micro resistance zone.
- Bulls were certain that the jobs report this morning would trigger a breakout of the stock market above the micro resistance zone. Bulls were hoping for weaker jobs data that would allow the Fed to cut interest rates in March. Bulls got their wish in the headline, but overall the jobs report is very noisy. As a result, as of this writing, the stock market is still in the resistance zone.
- Here are the details of the jobs report:
- The most notable point from the jobs report is that the prior nonfarm payrolls have been revised from 256K to 307K. This is a huge increase.
- Nonfarm payrolls came at 143K vs. 155K consensus. This is a weaker number.
- Nonfarm private payrolls came at 111K vs. 163K consensus.
- Average hourly earnings came at 0.5% vs. 0.3% consensus.
- Average work week came at 34.1 hours vs. 34.3 hours consensus. This number is important as it shows people are working less.
- Unemployment rate came at 4.0% vs. 4.1% consensus. This is a stronger number.
- In The Arora Report analysis, overall the data in this jobs report is too strong for the Fed to have a logical reason to cut interest rates. Of course, the Fed does not always move in a logical fashion. The Fed often does what it wants to do and then finds justification.
- Amazon (AMZN) reported strong earnings but guidance disappointed. Amazon is guiding Q1 revenue of $151B – $155B vs. $158.33B consensus. In The Arora Report analysis, cloud growth rate is also likely to slow at Amazon AWS even though Amazon plans a CapEx of $100B. Further, in our analysis, Amazon CapEx plans indicate that Amazon is not concerned about DeepSeek. Members of The Arora Report have very nice gains on AMZN stock. The buy zone is in the ZYX Buy Model Portfolio.
- University of Michigan consumer sentiment will be released today at 10am ET and maybe market moving.
- 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.
India
For the long term investor, India represents one of the best opportunities.
The Reserve Bank of India cut interest rates by 25 bps by unanimous vote in an effort to spur the economy. This is the first interest rate cut in about five years. GDP growth is projected to come at 6.7%.
ZYX Emerging has covered India continuously for 18 years. There are three India ETFs in the ZYX Emerging Model Portfolio.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Microsoft (MSFT), Meta (META), and Nvidia (NVDA).
In the early trade, money flows are neutral in Alphabet (GOOG).
In the early trade, money flows are negative in AMZN, Apple (AAPL), and Tesla (TSLA).
In the early trade, money flows are mixed 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 *** 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.
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 6105 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 36 points.
Gold futures are at $2883, silver futures are at $32.64, and oil futures are at $71.08.
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.
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.
