NVIDIA SURPASSES APPLE ON AI FRENZY, ECB CUTS RATES

Twitter
LinkedIn
Facebook

By Nigam Arora & Dr. Natasha Arora

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

Nvidia Surpasses Apple

Please click here for a chart of Nvidia stock (NVDA).

Note the following:

  • The chart shows the move up in NVDA stock after earnings.
  • The chart shows a second leg up on four pieces of news stoking the AI frenzy and Wall Street front running:
    • Nvidia announced its Rubin platform.
    • Hewlett Packard Enterprise Company (HPE) earnings showed high demand for Nvidia chips.  Moreover, HPE’s CEO was skeptical of competitors catching up to Nvidia.
    • Elon Musk diverted Nvidia chips from Tesla (TSLA) to his AI startup.  The stock market interpreted Musk’s move as additional demand for Nvidia chips.
    • Nvidia was the highlight at a conference in Taiwan.
    • Wall Street is front running the upcoming NVDA stock split on hopes of selling NVDA stock at a profit to retail investors who are anticipated to jump in after the stock split.
  • Nvidia has now surpassed Apple (AAPL) in market capitalization.  Now there are three companies worth more than $3T: Microsoft (MSFT), Apple, and Nvidia. The three companies constitute over 20% of the total market cap of the 500 companies in the S&P 500.
  • In The Arora Report analysis, the U.S. stock market has never in history been this concentrated in three stocks in only one sector.  This is a risk factor that prudent investors need to be aware of.  This is an important observation because all three of these stocks are in the Arora Model Portfolio.  Members of The Arora Report have very large unrealized gains.  
  • The European Central Bank (ECB) has cut interest rates.  Here are the key points:
    • The key rate is cut by 25 bps.
    • ECB is not precommitted to more rate cuts.
    • ECB is raising the inflation forecast for the rest of 2024 and 2025.
    • In The Arora Report analysis, the gap between the Fed’s policy and ECB’s policy has widened.
    • In The Arora Report analysis, the Fed is not likely to follow the ECB.  The Fed is likely to hold interest rates next week at the FOMC meeting.
  • Initial jobless claims came at 229K vs. 216K consensus.  In The Arora Report analysis, this data shows that the labor market is cooling.  When the labor market cools, it encourages the Fed to cut interest rates.
  • For today’s anticipated price action, please scroll down to the very, very short term indicator in the “Markets” section.
  • 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.
See also  WEEKLY STOCK MARKET DIGEST: PRUDENT INVESTORS BALANCING OPPORTUNITY FROM AI FRENZY WITH RISKS IN THIS MARKET

Magnificent Seven Money Flows

In the early trade, money flows are positive in NVDA.

In the early trade, money flows are neutral in Amazon (AMZN), MSFT, Alphabet (GOOG), Tesla (TSLA), and AAPL.

In the early trade, money flows are negative in Meta (META).

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.

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 and trading above $71,000 as of this writing.

Markets

Our very, very short-term early stock market indicator is ***.  As is their pattern, the momo crowd will buy on hope strategy ahead of the jobs report release tomorrow.  However, many institutions will take advantage of momo crowd buying to trim ahead of the jobs report which represents a risk event.  Whichever direction the stock market starts going, Wall Street machines will push the market harder in that direction.  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.

See also  QUAD WITCHING DRIVING AI STOCKS INCLUDING NVIDIA HIGHER, MORE ONE MONTH LOWS THAN HIGHS IN NASDAQ

Interest rates are ticking  up, and bonds are ticking down.

The dollar is slightly 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 $2375, silver futures are at $30.33, and oil futures are at $74.30.

S&P 500 futures are trading at 5366 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 down 13 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.

See also  HERE IS HOW TO PROFIT FROM VOLKSWAGEN INVESTMENT IN EV MAKER RIVIAN – CHANGING EV LANDSCAPE

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.

To take a free 30-day trial to paid services to gain access to more opportunities, please click here.

This post was just published on ZYX Buy Change Alert.

Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE
TRIAL TO PAID SERVICES.

Please click here to take advantage of a FREE 30 day trial.

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.

Subscribe to 'Generate Wealth'

Free Forever

More To Explore

30 Day Free Trial

Cancel within 30 days and you owe nothing

When you take a FREE 30 day trial, you get access to powerful techniques used by billionaires and hedge funds to grow richer. You can continue to use these powerful techniques to grow richer even if you cancel your subscription. You come out ahead by subscribing no matter how you look at it.

A fortune is to be made from AI stocks.
Get the list of 18 AI stocks to grab your share of the profits — no cost to you.

A fortune is to be made from AI stocks.

Get the list of 18 AI stocks to grab your share of the profits.

AI is a $1 Trillion Market

Making A Fortune
In Artificial Intelligence

Golden Age of Artificial Intelligence

Skip to content