By Nigam Arora
To gain an edge, this is what you need to know today.
AI Revenues
Please click here for a chart of Palantir stock (PLTR).
Note the following:
- The chart shows the jump up in PLTR stock on earnings.
- RSI on the chart shows PLTR stock is not overbought even after the jump and has room to run.
- The chart shows that prior to earnings PLTR stock had fallen. This drop was due to software stocks in general falling, as represented by software ETF (IGV). As a member of The Arora Report, you have known since 2022 that AI would disrupt many software companies. The stock market has only recently been catching on to the disruption. The paradox here is that Palantir sells only AI software and is not going to be disrupted. Yet, Palantir stock has fallen along with other software stocks. The reason is PLTR stock is very expensive, and as the PE multiples of other software stocks come down, they also bring down Palantir’s valuation.
- The chart shows that now is the third time PLTR stock is bouncing from the top band of zone 1 (support). This is the hallmark of a very strong stock.
- Palantir earnings were significantly above consensus and whisper numbers. Here are the noteworthy points:
- Palantir sees Q1 revenue of $1.532B – $1.536B vs. $1.33B consensus.
- Palantir sees FY26 revenue of $7.182B – $7.198B vs. $6.28B consensus.
- In Q4, Palantir revenue growth rate was 70% year-over-year, the highest ever.
- Prudent investors should note that the rise in PLTR stock is mostly due to momo crowd buying. This increases the risk.
- PLTR is long from an average of $20.15 in the ZYX Buy Core Model Portfolio. Long time members of The Arora Report have a gain of 714%.
- In a noteworthy development, Teradyne (TER), with business in semiconductor testing, product testing, and robotics, reported blow out earnings. The demand is being driven by AI. There will be signals in ZYX Buy on TER and its competitors when appropriate.
- Elon Musk is merging SpaceX with xAI. This is creating a lot of excitement for the upcoming SpaceX IPO. SpaceX will become the largest vertically integrated AI company. In The Arora Report analysis, SpaceX has the potential to become the most valuable company in the world if it succeeds with AI data centers in space. SpaceX is seeking permission from regulators to launch 1M satellites. For those who want next level information, there is a new follow up podcast titled “WHAT XAI MERGER MEANS FOR THE SPACEX BACKDOOR” in Arora Ambassador Club.
- ISM Manufacturing Index released yesterday came at 52.6% vs. 48.3% consensus. This was a surprise expansion of manufacturing in the U.S. The data triggered heavy buying in stocks. In yesterday’s Morning Capsule, we wrote:
The reason is market maker positions now have negative gamma. In plain English this means when silver, gold, or the momo crowd’s favorite tech stocks start going up, market makers will be forced to buy.
- Once the buying came in due to ISM Manufacturing data, due to market maker positioning with negative gamma, the stock market went higher.
- In the afternoon blind money came in. Blind money is the money that flows into the stock market on the first two days of the month without any analysis or regard for market conditions. Blind money will continue flowing into the stock market this afternoon.
- JOLTS job openings data is delayed.
- As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.
India
President Trump and Prime Minister Narendra Modi have reached an agreement. President Trump is cutting tariffs from 50% to 18%. India will buy oil from the US and Venezuela and stop buying oil from Russia. Tariffs on India are lower than tariffs on Pakistan, Bangladesh, and Vietnam. This will help traditional Indian exports.
Stocks in India surged 2%. For the long term investor, India is the best growth opportunity among large economies. ZYX Emerging has covered India for 19 years continuously. India ETF (EPI) has a gain of 354% for long term members of The Arora Report. Of note is a special situation in an India focused fund Fairfax India Holdings (FFXDF). The fund was founded by Prem Watsa, also known as the Warren Buffett of Canada. FFXDF position in ZYX Buy Core Model Portfolio has nice gains. There are also trade around positions on FFXDF and EPI. Trade around positions are a technique used by billionaires and hedge funds to dramatically increase returns and reduce risk.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Amazon (AMZN), Alphabet (GOOG), Nvidia (NVDA), and Tesla (TSLA).
In the early trade, money flows are neutral in Meta (META).
In the early trade, money flows are negative in Apple (AAPL) and Microsoft (MSFT).
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. Smart money is an important indicator but is only one of hundreds of indicators that go into determining the Arora Protection Band and signals. Please click here and here to understand how signals are generated.
Very Very Short-Term Indicator
The Arora Report’s proprietary 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
Gold and silver had become very oversold. Oversold markets tend to bounce, and that is exactly what is happening in gold and silver. Some of the buying is a result of momo gurus using conspiracy theories and the momo crowd falling victim to momo gurus. There is aggressive momo crowd buying in gold ETF (GLD) and silver ETF (SLV).
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 seeing buying from very oversold conditions.
Markets
Interest rates are ticking up, and bonds are ticking down.
The dollar is range bound.
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 7017 as of this writing. S&P 500 futures resistance levels are 7200, 7500, and 7700 : support levels are 7000, 6780, and 6500.
DJIA futures are down 18 points.
Gold futures are at $4952, silver futures are at $87.79, and oil futures are at $62.62.
Arora Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror. The proprietary Arora Protection Band from The Arora Report is very popular. The Arora 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.
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 1% of the content from our paid services. …TO RECEIVE REMAINING 99%, INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES AND SIGNALS IN REAL TIME, TAKE A FREE
TRIAL TO PAID SERVICES.
The Arora Report is one of the only major global investment newsletters that does not employ a single salesperson—because it does not need to. While competitors rely on high-pressure sales tactics, The Arora Report grows purely through results, with satisfied members recommending it to their family and friends.
Join the service that investors trust the most and recommend to family and friends.
Please click here to take advantage of a FREE 30 day trial.
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.
