SILVER, GOLD, AND COPPER BREAKOUT, WALL STREET’S LAST BEAR THROWS IN THE TOWEL

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By Nigam Arora & Dr. Natasha Arora

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

Metals Break Out

Please click here for a chart of silver ETF (SLV).

Note the following:

  • The chart is a monthly chart of silver to give you the long term perspective.
  • The chart shows that silver has broken out on a monthly basis.
  • The chart shows RSI is reaching an overbought level.  The historical pattern is that when RSI on a monthly chart reaches an overbought level, often a pullback occurs, followed by a new high.  History does not always repeat itself, but it is instructive.
  • Silver ETF SLV is in the core Model Portfolio in ZYX Buy.  The position is very profitable.
  • Gold is also breaking out.  Gold ETF GLD is in the Model Portfolio in ZYX Allocations.  The position is very profitable.  Gold miner NEM is in the core ZYX Buy Model Portfolio.
  • Copper is also breaking out.  The best way to play copper is through copper mining stocks.  Copper miner Freeport-McMoRan (FCX) is in the core Model Portfolio in ZYX Buy.  Copper miner FQVLF is in ZYX Buy in the portfolio that surrounds the core Model Portfolio.  FQVLF is also a buyout target.  To date, 194 Arora portfolio companies have been bought out, producing a fortune for members who invest in buyout targets.  NGLOY is a diversified miner with big copper operations.  NGLOY is also in the core Model Portfolio in ZYX Buy.
  • For those who like ETFs, metals and mining ETF (XME) is in the ZYX Allocation Model Portfolio.   The position is profitable.
  • Those investors who are not in metals may consider the positions highlighted above on pullbacks, but pay attention to buy now ratings and buy zones depending upon if you are following the Good Way or the Best Way.
  • For those not in metals, there will be new opportunities.  Stay tuned to the Real Time Feeds for the signals.
  • A rally in copper is mostly due to a short squeeze.  Buying in gold and silver is real.
  • The death of Iranian President Ebrahim Raisi in a helicopter crash is supporting the metals on concerns about geopolitical problems in the Middle East.
  • Wall Street’s last bear has thrown in the towel.  Mike Wilson of Morgan Stanley was the last bear.  He has changed his call from a 15% drop in the stock market to a 2% rise.
  • Our decades of experience at The Arora Report shows that the time to aggressively buy stocks is when Wall Street’s last bull throws in the towel – this is one of the reasons behind The Arora Report’s back up the truck and buy stocks signal on March 9, 2009.  With the benefit of hindsight, we now know that the great bull market started on March 9, 2009.  Now that Wall Street’s last bear has thrown in the towel, if history is any guide, the reverse of what happened in 2009 may be ahead.  There are significant opportunities, but you need to be selective.  Pay attention to the Model Portfolios and buy zones.  It is certainly not the time to just aggressively buy indexes if controlling risk is part of your equation.
  • 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 Alphabet (GOOG), Nvidia (NVDA), and Tesla (TSLA).

In the early trade, money flows are neutral in Amazon (AMZN), Meta (META), and  Microsoft (MSFT).

In the early trade, money flows are negative in Apple (AAPL).

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, very short term trades, consider following the momo crowd and not smart money.

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 *** 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 after the weekend pump.

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.

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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.

Gold futures are at $2417, silver futures are at $31.45, and oil futures are at $79.24.

S&P 500 futures are trading at 5330 as of this writing.  S&P 500 futures resistance levels are 5400, 5500, and 5622: support levels are 5256, 5210, and 5020.

DJIA futures are up 2 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.

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.

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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 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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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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