By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Importance Of Earnings
Please click here for a chart of Nvidia stock (NVDA).
Note the following:
- Nvidia is the most important stock in this market as Nvidia is the center of the AI revolution.
- The chart shows Arora signals to take partial profits or hedge NVDA stock right near the top.
- The trendline on the chart shows that the upward trend in NVDA is now broken.
- The chart shows that along the way, there were several signals for newer members to participate in the rise in NVDA stock.
- The chart shows a big drop in NVDA stock on Friday.
- The chart shows NVDA has fallen about 21% from the peak in a short time.
- The chart shows that NVDA is still significantly above the breakout point.
- The chart shows the drop was on somewhat heavy volume but not extremely heavy volume. This is a negative.
- RSI on the chart shows that NVDA is now oversold. When a stock is oversold, often it tends to bounce.
- The chart shows that members of The Arora Report bought NVDA stock at an average price of $125.51, just before the run up to $974.
- In real life, it does not get any more perfect than The Arora Report calls on NVDA – buying at the low right before a big run up, holding through the run up, using trade around positions along the way to add to profits, and taking profits or hedging right at the top.
- The plan is to realize profits on NVDA hedges and add to NVDA at the appropriate time.
- A look at the NVDA chart shows the importance for the entire stock market of earnings this week from Tesla (TSLA), Meta (META), Microsoft (MSFT), and Alphabet (GOOG, GOOGL). Earnings from these stocks, with the exception of TSLA, are expected to be extremely strong. Whisper numbers are higher than consensus numbers.
- If earnings from these stocks are better than whisper numbers, expect a strong rally in the stock market from here.
- If earnings from these stocks are worse than whisper numbers, expect the current move down to continue.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Apple (AAPL), Amazon (AMZN), GOOG, META, and NVDA.
In the early trade, money flows are neutral in MSFT.
In the early trade, money flows are negative in TSLA.
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.
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 being bought as the fourth halving has now occurred. There is disappointment among bulls because buying so far is not as strong as they had expected.
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.
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 $2357, silver futures are at $27.46, and oil futures are at $81.36.
S&P 500 futures are trading at 5033 as of this writing. S&P 500 futures resistance levels are 5210, 5256, and 5400: support levels are 5020, 4918, and 4852.
DJIA futures are up 222 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.
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 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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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.
