By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Google Goes Nuclear
Please click here for a chart of NANO Nuclear Energy stock (NNE).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of NNE is being used to illustrate the point.
- NNE is a micro reactor company.
- The trendline on the chart shows a steady uptrend since last month on the excitement about the use of nuclear power for AI data centers.
- There is a position in NNE in ZYX Buy Change Alert.
- For those who want next level information, the first in a series of podcasts titled “AI IS POWER HUNGRY – OPPORTUNITIES IN NUCLEAR” is now live in Arora Ambassador Club. To get on the waitlist to join Arora Ambassador Club, please click here to fill out the form below.
- Google (GOOG) has decided on nuclear power for AI data centers. Most importantly, Google has signed a Master Plant Development Agreement for smart modular reactors with Kairos Power. The first plant will be deployed by 2030.
- The Google agreement will likely build more excitement for nuclear power. We have previously mentioned three conventional nuclear plant operators: Constellation Energy (CEG), Vistra (VST), and Public Service Enterprise Group (PEG). There are two publicly traded smart modular reactors of note – NuScale Power (SMR) and Oklo (OKLO).
- There are reports Israel has told the U.S. that Israel will not attack Iran’s nuclear facilities or oil infrastructure. This development is impacting the markets in the following ways:
- Buying in stocks
- Selling in volatility index (VIX) futures
- Selling in the dollar
- Selling in oil
- Selling in gold and silver
- Due to The Arora Report anticipating this scenario as the highest probability scenario, members got ahead of the curve when they received a signal to take partial profits on gold ETF GLD in ZYX Allocation as well as silver ETF SLV and gold miner Newmont (NEM) in ZYX Buy.
- Earnings season is in full swing.
- Among important earnings of note, Bank of America (BAC) and Goldman Sachs (GS) reported earnings better than the consensus. BAC is in ZYX Buy Core Model Portfolio and is long from $7.69. BAC is trading at $43.11 as of this writing in the premarket. This represents a gain of 461%.
- Johnson & Johnson (JNJ) reported lower than expected earnings.
- The nation’s largest health insurer United Health (UNH) is lowering its outlook due to rising medical costs.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Amazon (AMZN), Microsoft (MSFT), Meta (META), Tesla (TSLA), Apple (AAPL), and GOOG.
In the early trade, money flows are neutral in Nvidia (NVDA).
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 *** 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 down, and bonds are ticking up.
The dollar is weaker.
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 5910 as of this writing. S&P 500 futures resistance levels are 5926 and 6017 : support levels are 5748, 5622, and 5500.
DJIA futures are down 133 points.
Gold futures are at $2665, silver futures are at $31.22, and oil futures are at $70.59.
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.
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.
