By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Bitcoin To The Moon
Please click here for a chart comparing small cap ETF (IWM) to the Magnificent Seven stocks Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), Microsoft (MSFT), Nvidia (NVDA), Tesla (TSLA).
Note the following:
- The chart shows that small cap ETF (IWM) has beaten all seven of the Magnificent Seven stocks by a large margin.
- IWM has beaten AI king NVDA by 19.51%.
- IWM has beaten AMZN by 20.43%.
- IWM has beaten TSLA by 16.64%.
- IWM is the ZYX Allocation Model Portfolio.
- Here are the reasons small caps have beaten the Magnificent Seven.
- Many hedge funds have been short IWM. A short squeeze has exaggerated the move.
- Trump’s policies will be good for small cpas. Small caps have been boosted by Trump becoming the front runner.
- Small caps borrow heavily. A rate cut will benefit small caps.
- There is a rotation going on in which money is flowing out of the Magnificent Seven stocks and into small caps.
- The Arora Report has been bullish on small caps. However, after this large move, it is time for caution. The reason is that so far small cap earnings have not kept up with earnings from the Magnificent Seven. Many earnings are still ahead in this earnings season. These earnings will provide a clearer picture. After more information on earnings, a new buy zone and a new Buy Now rating may be given on IWM.
- Among the Magnificent Seven stock, TSLA and GOOG have already reported worse than expected earnings. Earnings are ahead this week from Microsoft (MSFT), Amazon (AMZN), Apple (AAPL), and Meta (META).
- We have been sharing with you that Trump could propose setting up a national strategic bitcoin reserve. This is exactly what Trump did in his speech in Nashville on Saturday. Trump’s conversion from calling bitcoin a scam to a plan to drive bitcoin to the moon is complete.
- There is significant enthusiasm among bitcoin bulls as setting up a U.S. national strategic reserve for bitcoin will legitimize bitcoin. Bitcoin is seeing very positive money flows.
- Bitcoin is approaching a resistance zone. The resistance zone is $71,000 – $74,000.
- Investors should also be prepared for a potential ‘sell the news’ reaction as bitcoin approaches the resistance zone.
- Opinions on bitcoin dramatically vary. A large number of investors believe bitcoin is a scam, while others are all in on bitcoin going to the moon. Irrepsecitive of your opinion of bitcoin, money is to be made in bitcoin on both the long and short sides. For those wanting to make money from bitcoin, it is extremely important to know the 22 secrets of bitcoin whales. For those seeking next level information, a new podcast titled “Profiting From Trump Driving Bitcoin To The Moon” is in post production. The podcast will be available in Arora Ambassador Club. A three part podcast series sharing with you the 22 secrets of bitcoin whales is already available. To get on the waitlist to join Arora Ambassador Club, please click here to fill out the form.
- Investors should watch for an expansion of war in Northern Israel and Lebanon.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in AMZN, NVDA, MSFT, GOOG, META, and TSLA.
In the early trade, money flows are negative in AAPL.
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.
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 seeing aggressive buying.
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 down, and bonds are ticking up.
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 $2391, silver futures are at $28.17, and oil futures are at $77.08.
S&P 500 futures are trading at 5515 as of this writing. S&P 500 futures resistance levels are 5622, 5748, and 5926: support levels are 5500, 5400, and 5256.
DJIA futures are up 54 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.
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.
