By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
$8 Trillion Path With Robots
Please click here for a chart of Nvidia stock (NVDA).
Note the following:
- The chart shows that NVDA stock has continued to move higher after the breakout.
- RSI on the chart shows a divergence. This indicates NVDA stock may pull back barring any positive news.
- The chart shows NVDA’s latest rally is on low volume. This indicates a lack of conviction in NVDA stock and that NVDA stock is just moving up on market momentum.
- The chart shows NVDA stock has moved up 45% since the Arora buy signal in April.
- The chart shows NVDA has experienced deep corrections. At the time of the deep corrections, many gurus issued sell ratings on NVDA stock. However, The Arora Report stayed firm with the core position and took advantage of the corrections with trade around positions. A trade around position is a technique used to hedge funds and billionaires to dramatically increase returns and reduce risks.
- The chart shows when The Arora Report gave a signal to take profits on hedges. These profits were very substantial and also protected investors when tech stocks fell.
- It is the judicious combination of identifying change early, long term investing, short term tactical trades, the proprietary Arora Protection Band, and dynamic hedging that produces market beating returns while taking lower risks than the market.
- Nvidia has become the first ever $4T company. Nvidia has beaten the prior record of $3.91T held by Apple (AAPL). Apple has pulled back on AI failures, and now Apple’s market cap is $3.15T. More importantly for investors, Nvidia has more long term potential than Apple, unless Apple gets AI right and Apple develops a new line such as domestic robots.
- Nvidia appears to have a path to $5T just on AI spend on data centers and the new chips Nvidia is planning for China.
- More importantly, if Nvidia starts dominating the intelligence driving robots, Nvidia has the potential to reach $8T, far surpassing Apple. Of course, there is no guarantee that Nvidia will dominate robot intelligence. For investors, it is important to stay tuned to a resource that focuses on change, like The Arora Report. The Arora Report was one of the first to make a high conviction call in 2022 that AI was real. Long time members of The Arora Report are long NVDA stock from $12.55 and now have a gain of 1198%. It is worth a reminder of what we have been sharing with you since 2022: A fortune is to be made in AI all the way to 2030, but it will not be a straight line. At times, it will be treacherous. You will need expert, proven guidance.
- The 10 year Treasury auction yesterday came better than expected. Here are the details:
- $39B 10-year Treasury note reopening
- High yield: 4.362% (When-Issued: 4.365%)
- Bid-to-cover: 2.61
- Indirect bid: 65.4%
- Direct bid: 23.7%
- The auction for 30 year Treasuries is today. Prudent investors will be closely watching the market reaction. Investors gain an edge when they understand how Treasury auctions work and how to interpret the results. The easiest way to develop in-depth knowledge is to listen to the podcast titled “Treasury Auction Data: Ignore The Most Popular.”
- There was buying in the stock market on the release of the FOMC minutes yesterday afternoon. Investors focused on the potential of a rate cut later in the year and ignored all of the negatives from the FOMC minutes. This is typical strong bull market behavior.
- Initial jobless claims came at 227K vs. 245K consensus. This indicates the jobs picture is still strong, in spite of widespread job cuts and reported difficulties finding new jobs.
- The stock market has been eagerly awaiting earnings from Delta Air Lines (DAL) as an indication of travel demand. Delta reported earnings of $2.10 per share vs. $2.06 consensus. Delta guides inline.
- In the early trade, trading is muted as the stock market awaits more trade related developments from President Trump.
- 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.
Brazil
The stated purpose of tariffs is to reduce the trade deficit. Now, President Trump is starting to use tariffs as a political tool. This has significant long term implications for investors. For the time being, the momo crowd is oblivious.
President Trump is imposing 50% tariffs on Brazilian goods. This makes no economic sense because the U.S. ran a surplus of $7.4B on $92B of trade with Brazil in 2024. President Trump is trying to help far-right Brazilian political leader Bolsonaro. President Trump said, “This is nothing more, or less, than an attack on a political opponent—Something I know much about…LEAVE BOLSONARO ALONE!”
Stocks in Brazil are dropping.
Magnificent Seven Money Flows
In the early trade, money flows are positive in NVDA and Tesla (TSLA).
In the early trade, money flows are negative in AAPL, Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG), and Meta (META).
In the early trade, money flows are neutral 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 *** 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) hit a new all time high on strong buying before pulling back.
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 6301 as of this writing. S&P 500 futures resistance levels are 6500 and 6700 : support levels are 6256, 6131, and 6017.
DJIA futures are down 80 points.
Gold futures are at $3332, silver futures are at $37.01, and oil futures are at $67.84.
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.
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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.
