By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
All Depends On Powell
Please click here for a chart of Nasdaq 100 ETF (QQQ).
Note the following:
- The chart shows a five day losing streak in tech stocks.
- This is the first time tech stocks have experienced such a losing streak in 2025.
- Last time it happened was in November 2024, and prior to that was January 2024. Both times, tech stocks subsequently went higher.
- If tech stocks close lower today, it will be troublesome – tech stocks have not seen a six day losing streak since the bear market of 2022.
- The chart shows slightly higher volume on the down move yesterday.
- The chart shows tech stocks are at the top of zone 2 (support).
- RSI on the chart shows that QQQ is oversold. The interpretation in this case is that even though QQQ is oversold, it can become more oversold if smart money selling continues and Fed Chair Powell is hawkish.
- Smart money continues to sell tech stocks to hedge against Powell being hawkish. In The Arora Report analysis, smart money still holds very large positions in tech stocks; smart money is simply reducing risk at the edge ahead of Powell’s speech. In contrast, the momo crowd continues to buy every tiny dip extremely aggressively as the momo crowd does not take risk into account.
- Nvidia (NVDA) has a new China problem. One of the reasons NVDA stock went up is that Nvidia gained approval for a China-specific H20 AI chip. Now, the Chinese government is instructing large users such as Alibaba (BABA) to cut orders for H20. In The Arora Report analysis, the Chinese appear to be insulted by Howard Lutnick’s comment. Lutnick said, “We don’t sell them our best stuff, not our second-best stuff, not even our third-best.” He also stated, “You want to sell the Chinese enough that their developers get addicted to the American technology stack, that’s the thinking.”
- The Treasury auction yesterday was weak. In The Arora Report analysis, this illustrates the danger if Powell chooses to give in to President Trump. You may remember the spot on contrary call from The Arora Report when the Fed cut interest rates by 50 bps – the stock market was expecting long term interest rates to come down, but The Arora Report call was that long term interest rates would go up. After the Fed cut rates, long term interest rates did indeed go up. Here are the details of the auction:
- $16B 20-year Treasury bonds
- High yield: 4.876% (When-Issued: 4.877%)
- Bid-to-cover: 2.54
- Indirect bid: 60.6%
- Direct bid: 26.5%
- In The Arora Report analysis, FOMC minutes released yesterday afternoon were a broadside against President Trump’s narrative.
- President Trump’s narrative is that foreigners are paying for tariffs and tariffs are not inflationary.
- FOMC minutes say foreigners are paying very little of the tariffs. Most of the tariffs are being paid by U.S. businesses; tariffs are seeping into the prices the U.S. consumer is paying and tariffs are likely to raise prices further.
- Fed Chair Powell is scheduled to speak at 10am ET tomorrow. The Arora Report call is unchanged from the one previously shared with you. Here is the prior Arora Report call.
- The stock market is now believing a 50 bps rate cut is coming in September. In The Arora Report analysis, the data does not support a 50 bps cut, but the pressure from President Trump to cut rates is relentless. Here is the key question for prudent investors: Will Fed Chair Powell be objective or give into President Trump’s demand? In theory, if Fed Chair Powell remains objective, the stock market should fall. However, in practice, expect momo gurus to spread the narrative that Powell does not matter as his term is about to expire anyway.
- Initial jobless claims came at 235K vs. 222K consensus. This indicates the jobs picture is beginning to weaken.
- Walmart (WMT) is the largest retailer in the U.S., and therefore, Walmart earnings are important. Walmart reported less than whisper numbers but is guiding above whisper numbers. WMT is in the ZYX Buy Core Model Portfolio long from $19.25. WMT stock is trading at $100.17 as of this writing in the premarket.
- Leading indicators will be released today at 10am ET.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are negative in Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), Nvidia (NVDA), Microsoft (MSFT), and Tesla (TSLA).
In the early trade, money flows are negative 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
The momo crowd is *** in 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 selling.
Markets
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.
S&P 500 futures are trading at 6389 as of this writing. S&P 500 futures resistance levels are 6500, 6700, and 7000: support levels are 6256, 6131, and 6017.
DJIA futures are down 151 points.
Gold futures are at $3385, silver futures are at $37.97, and oil futures are at $62.67.
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.
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.
