By Nigam Arora & Dr. Natasha Arora

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights from the prior week gives them an edge over the coming weeks. Here is the day by day rundown from the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers of The Arora Report. 

Please scroll down for the section ‘Protection Bands and What To Do Now.’

POWER OF OVERSOLD BOUNCE OVERCOMES ANOTHER WEAK TREASURY AUCTION

Aug 9, 2024

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

Weak Treasury Auction

Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

• The chart shows that the stock market is consolidating around the support zone.
• RSI on the chart shows that the stock market has moved out of the oversold zone.
• The price action in the stock market today will depend on the battle between smart money and the momo crowd.
  • The momo crowd is buying on the belief that the correction is over and the Fed will come to the rescue.
  • Smart money is trying to reduce risk ahead of the weekend.
  • If a short squeeze starts, the market can go much higher.  Today is a Friday.  Short squeezes tend to start on Fridays.
• The pattern traced by the volatility index VIX suggests a fair probability of the correction being over.
• We shared with you yesterday that the stock market was oversold and oversold markets tend to bounce.
• The chart shows that yesterday the oversold bounce was so strong that it overcame a weak Treasury auction.  Here are the results of the Treasury auction:
  • $25B 30-year Treasury bond auction
  • High yield: 4.314% (When-Issued: 4.283%)
  • Bid-to-cover: 2.31
  • Indirect bid: 65.3%
  • Direct bid: 15.5%
• The price action on Thursday on a weak Treasury auction was directly opposite of the price action on Wednesday.
  • On Wednesday, the stock market fell out of bed after weak Treasury auction results were reported.
  • In anticipation of weak Treasury results on Thursday, many investors sold short.
  • On Thursday when the stock market did not immediately fall on weak Treasury results, short sellers started covering.  This buying led to a short squeeze, causing the stock market to go higher.
• In The Arora Report analysis, in view of the rising national debt and high deficits, from a macro perspective, prudent investors should be concerned about weak Treasury auctions.  This is especially important because, under Yellen, the U.S. Treasury is manipulating the issuance to prevent weak Treasury auctions.  This is one of the elements that go into determining the protection band.  Investors should pay attention to the protection band.  
• Overnight, futures were higher based on the momentum from yesterday.  As we get closer to the opening, there is wider recognition that yesterday’s rally was short covering and an oversold bounce. This is bringing in selling and stock futures have turned negative as of this writing.
• The foregoing illustrates that there are a number of crosscurrents that move the stock market.  For example, those who predicted on Thursday that the Treasury auction would be weak were correct but the market reaction was opposite to what would have been expected by less informed investors.
• At least two Fed officials are not onboard with the market’s demands for an emergency rate cut.
  • Fed President Tom Barkin expressed that there is time for the Fed to determine if action is required.
  • Fed President Jeffrey Schmid said that because inflation is still above the target and the labor market is healthy it is not time for a rate cut.
• 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 Microsoft (MSFT) and Nvidia (NVDA).

In the early trade, money flows are neutral in Amazon (AMZN).

In the early trade, money flows are negative in Apple (AAPL), Alphabet (GOOG), Meta (META), and Tesla (TSLA).

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 *** 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) has moved above $60,000 on hopes that bitcoin whales will run up bitcoin this weekend.

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 weaker.

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 $2469, silver futures are at $27.59, and oil futures are at $76.49.

S&P 500 futures are trading at 5328 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 60 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.

WEAK TREASURY AUCTION TAKETH AWAY WHAT THE BOJ GAVE TO THE STOCK MARKET, BUYING ON JOBLESS CLAIMS

Aug 8, 2024

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

Buying On Jobless Claims

Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

• The chart shows the stock market is consolidating in the support zone.
• Investors should carefully watch if the stock market breaks above the support zone or below the support zone.
• The chart shows that RSI is oversold.  Oversold markets tend to bounce.
• The chart shows that the stock market was on the verge of dropping the day before yesterday.
• The chart shows that the market rallied earlier in the day yesterday on the Bank of Japan (BOJ) statement that the BOJ would not raise rates when financial markets are unstable.  The statement helped those who borrowed in yen to buy the Magnificent Seven and other AI stocks to stop selling and even add new carry trade positions.
• BOJ July 31 meeting minutes released overnight are hawkish.  One member thought that at least 1% would be an appropriate neutral interest rate.  For reference, the present rate is 0.25%.
• The Treasury auction was weak.  The weak Treasury auction started a cascade of selling.  As a member of The Arora Report, you already knew that the supply of U.S. Treasury bonds is so high that a big risk to the stock market is weak auctions.  As a matter of fact, on Monday, when Treasury bonds rallied and everyone was buying bonds, The Arora Report gave a signal to take advantage of the strength to short the bond ETF TLT or buy inverse bond ETF TBT.  That call has now proven spot on as the bonds were shorted right at the top.  The trades are profitable.  Here are the details from the Treasury auction:
  • $42B 10-year Treasury note auction results
  • High yield: 3.960% (When-Issued: 3.929%)
  • Bid-to-cover: 2.32
  • Indirect bid: 66.2%
  • Direct bid: 16.0%
• There is a $25B auction of 30-year Treasury bonds today.  If the auction results are weaker, expect another market drop.  On the hand, the market may rally if auction results are better than expected.
• The stock market has now become ulta-focused on jobless claims as Wall Street is beginning to recognize that initial jobless claims is a leading indicator.  Of course, as a member of The Arora Report, you already knew that jobless claims is a leading indicator that carries heavy weight in the adaptive ZYX Asset Allocation Model with inputs in ten categories.  Here are the key points:
  • Initial jobless claims came at 233K vs. 240K consensus.
  • Stocks are being aggressively bought on this data on the assumption that this data indicates the jobs picture is not slowing as fast as feared.
  • As a member of The Arora Report, you already know that aggressive buying on this data is highly flawed because this data is highly volatile.  For a country as big as the U.S., 6,000 fewer jobless claims is hardly something to hang your hat on.
  • As we have shared with you before, prudent investors should look at a four week moving average of initial jobless claims.
• Expect a high degree of volatility in stocks, bonds, gold, and oil.  Expect bitcoin to continue to move at the mercy of bitcoin whales.
• 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 Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).

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 *** 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 *** 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 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 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.

Gold futures are at $2448, silver futures are at $27.06, and oil futures are at $75.54.

S&P 500 futures are trading at 5274 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 up 145 points.

SMART MONEY SELLS MOMO CROWD’S FAVORITE AI STOCK, BANK OF JAPAN RESCUES THE U.S. STOCK MARKET

Aug 7, 2024

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

BOJ Saves The U.S. Stock Market

Please click here for a chart of Super Micro Computer stock (SMCI).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of SMCI stock is being used to illustrate the point.
• SMCI is a favorite AI stock of the momo crowd.
• The momo crowd was eagerly awaiting SMCI earnings, hoping it would run up back to over $1000 and take the rest of the AI stocks much higher along with it.
• In The Arora Report analysis, the average cost of the momo crowd for SMCI is above $1000.  As of this writing in the premarket, SMCI is trading at $529.94.
• After the earnings release yesterday in the after market, the momo crowd immediately ran up SMCI stock to $727.70.  The momo crowd was excited about the 10 for 1 stock split.
• Smart money took advantage of the strength generated by momo crowd buying to start selling SMCI.  The reason smart money sold SMCI is that gross margins came at 11.3% vs. 14.1% consensus.
• Investors should note that after the drop caused by smart money selling, SMCI has not been able to significantly rally so far in spite of CEO Charles Liang saying that margins will rise to 14% – 17% in FY25.
• The chart shows that from its peak, SMCI stock has lost 56.4%.
• The chart shows that at least a modicum of sanity is beginning to set in in AI stocks after the unrestrained frenzy caused by incessant momo crowd buying.
• The chart should not surprise you because as a member of The Arora Report, you knew a drop was coming.  The high in SMCI occurred on March 8.  Four days before the high, on March 4, we wrote in the Morning Capsule,

SMCI has become a favorite of the momo crowd.  The momo crowd incorrectly thinks SMCI has the same potential as Nvidia (NVDA).  Investors need to keep in mind the following:

• SMCI moves a lot more than NVDA.  SMCI is so volatile because of the small float.

• SMCI is an assembler of servers for artificial intelligence.  It uses components from NVDA, Micron (MU), and Marvell (MRVL).

• NVDA has a large moat to protect it that includes IP for its GPUs.  SMCI has no moat and the barrier to entry for competitors is low.

• SMCI sales are to hyperscalers like Microsoft (MSFT), Amazon (AMZN), and Google (GOOG).  The reason SMCI sales are booming is that they have availability of NVDA chips.  As chips become more available to competitors, SMCI will not be able to sustain its sales growth rate.

• The momo crowd is buying SMCI due to lack of knowledge.  However, there are many investors who understand and have the knowledge of SMCI’s business.  Many such investors are short selling SMCI.  For the time being, short sellers are being overwhelmed by the YOLO crowd.

• Taking all of the above into consideration with the quantitative analysis screen of the ZYX Change Method, in an optimistic case, the fair value of SMCI stock is $442 – $486.

• The spot on call above demonstrates the wisdom of what The Arora Report has been sharing with you – a fortune is to be made in artificial intelligence between now and 2030.  However, it is not going to be a straight line.  At times, it is going to be treacherous.  Based on the feedback from investors so far, it is clear that investors who are developing in depth knowledge of investing in AI are doing better than those who are not, with both groups getting the same signals.  The problem investors face is that it is very difficult to find objective investing information on AI as a vast majority of the content in the media is produced with an agenda that is not in investors’ best interest.  Arora Ambassador Club was started based on your requests to provide next level information in an objective fashion.
• A number of indicators yesterday afternoon were showing that the bounce from Monday’s low was running out of steam.  When SMCI fell, other AI stocks also fell in the after market.  Yesterday evening, it was evident that the most likely course for the stock market today would be to go down.  At one point, Japanese stocks were down 2%.
• Bank of Japan (BOJ) saved markets across the world, including the U.S. stock market.  BOJ Deputy Governor Shinichi Uchida said that BOJ will not raise interest rates if markets are unstable.  Markets in Asia immediately rallied.  The strength carried on to Europe and now to the U.S. 
• The yen has fallen on Uchida’s statement.  This shows that The Arora Report’s call on Monday has proven spot on.  The headline of the signal in ZYX Allocation on Monday read “FXY: YEN JUMPS — TAKE PARTIAL PROFITS.”  This profit taken signal was given right at the high.
• With support from BOJ, the urgency among funds to unwind the carry trade has disappeared.  In The Arora Report analysis, some funds may begin establishing new carry trade positions by borrowing in yen and investing the money in U.S. stocks. However, this is only for the short term.  In the longer term, the carry trade will unwind again as the yen is very undervalued.  
  • The Arora Report call is that ultimately the yen can reach 120 yen to a dollar.  As a reference, the yen is trading around 147 as of this writing.  
• 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 Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (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 *** 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

Oil is jumping on fear of Iran retaliating against Israel.

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 on the drop in the yen.

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 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.

Gold futures are at $2443, silver futures are at $27.15, and oil futures are at $74.75.

S&P 500 futures are trading at 5324 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 up 294 points.

NO ‘BACK UP THE TRUCK AND BUY STOCKS’ SIGNAL – CTAS’ POSITIONED TO SELL THE RALLIES

Aug 6, 2024

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

Carry Trade Unwind Not Over

Please click here for a chart of Nasdaq 100 ETF (QQQ).

Note the following:

• The chart shows that QQQ gapped down and opened yesterday below the support/resistance zone.
• The chart shows the dip was bought.
• The chart shows QQQ is now in the support/resistance zone.
• The chart shows that drop yesterday occurred on higher volume.  This indicates conviction in selling.
• The chart shows there is buying this morning.
• There are ten different indications that combine together to show a capitulation. In The Arora Report analysis, nothing even close to a capitulation has happened.  
• When a capitulation happens, it often leads to a ‘back up the truck and buy stocks’ signal.  There is no such signal at this time.
• The carry trade unwind was the primary cause of the sell off yesterday.
• There is a widespread mistaken belief among less informed investors that the carry trade unwind is over.
• In The Arora Report analysis, only those funds that were overstretched were forced to unwind yesterday.
• In The Arora Report analysis, those with deeper pockets will take advantage of rallies to unwind the carry trade.
• The buy the dip mentality is well and alive.  It is on display in Japan, where stocks jumped about 10% overnight.
• Commodity Trading Advisors (CTAs) manage about $300B.  These advisors primarily trade futures in a systematic manner.  In The Arora Report analysis, CTAs were caught by surprise over the last three days.  Positioning of CTAs is such that they are likely to sell the rallies.     
• On the positive side, momo gurus have a new narrative.  Their narrative is that the Fed will cut at least by 50 bps three times this year.  The momo gurus are also demanding that the Fed cut interest rates by 75 bps in an emergency meeting.  This narrative seems to be working.  The momo crowd is back to aggressively buying stocks.
• In The Arora Report analysis, without further turbulence, there is almost zero probability of an emergency Fed meeting and an immediate 75 bps cut.  However, if the Fed were to cut by 75 bps, there would likely be a rip roaring stock market rally, leading to new highs.  
• The buying the dip mentality was so strong yesterday that Wall Street’s fear gauge VIX (VIX) saw the biggest intraday drop ever in history.  VIX dropped from the intraday high of 65 to close at 38.  This indicates that fear evaporated among the momo crowd very quickly.  
• 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 Amazon (AMZN), Alphabet (GOOG),  Meta (META), Microsoft (MSFT),  Nvidia (NVDA), and Tesla (TSLA).

In the early trade, money flows are negative in Apple (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 *** 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

Gold and silver are being sold presumably to raise funds to unwind the carry trade.

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

Oil is being sold on a delay of reprisal from Iran against Israel.

The momo crowd is *** in oil in the early trade.  Smart money is *** in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is being bought as bitcoin whales are promoting the idea that support at $50,000 held and now is the time to buy.

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 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.

Gold futures are at $2434, silver futures are at $26.80, and oil futures are at $72.42.

S&P 500 futures are trading at 5239 as of this writing.  S&P 500 futures resistance levels are 5256, 5400, and 5500: support levels are 5210, 5020, and 4918.

DJIA futures are up 151 points.

THE REAL REASON BEHIND GLOBAL STOCK CARNAGE – CARRY TRADE UNWINDS

Aug 5, 2024

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

Carry Trade Unwinds

Please click here for a chart of Japanese yen ETF (FXY).

Note the following:

• The chart shows the rapid rise in the yen.
• The chart shows that the rapid rise occurred after the Bank of Japan raised rates.
• ZYX Allocation by The Arora Report has a long position in yen ETF (FXY).  We previously wrote that FXY would act as a hedge.  That call has now proven spot on.  FXY is rising while stocks are experiencing carnage.
• We have been sharing with you for a while to keep an eye on actions from the Bank of Japan as they may have a large impact on global stocks, including U.S. stocks.
• Last week we shared with you that the Bank of Japan raised rates and the carry trade was beginning to unwind.  Funds have been borrowing money in yen and buying stocks across the globe.  Most notably, funds have been using money borrowed in yen to buy AI related semiconductor stocks and the Magnificent Seven stocks.  This is the reason the Magnificent Seven and other AI stocks are now seeing aggressive selling.
• There are several other factors entering into the mix to drive stocks lower.
  • We have been sharing with you that sentiment had reached the extreme zone.  We have also been sharing with you that when sentiment reaches the extreme, it is a contrary signal, i.e. a sell signal.  Now we are seeing the aftermath of sentiment reaching the extreme.
  • Warren Buffett has become defensive.
    • Buffett’s company, Berkshire Hathaway (BRK.B), sold about half of its Apple (AAPL) position.
    • BRK.B has reached a record $277B cash position on June 30 vs. $189B on March 31.  This largely reflects Buffett selling about half of the AAPL position.
    • This is especially very important because it was only back in May when Buffett said AAPL was a core holding like Coca-Cola (KO) and American Express (AXP).  He has held KO and AXP for a very long time.
  • Delay in Nvidia’s (NVDA) next generation Blackwell chip.
  • Economic data is beginning to show slowing U.S. growth as we shared with you in Morning Capsules last week.  Please read last week’s Morning Capsules for details.  The most notable pieces of data are:
    • ISM
    • Jobless claims
    • Jobs report
  • The momo crowd is facing forced selling due to margin calls.
    • Expect selling pressure to lift when early margin calls are done.
    • Expect another couple of waves of margin calls during the day unless the market rallies substantially.
    • Historically, the two times of heavy forced liquidation are around 10:30am ET and 1pm ET.
• In addition to the protection band that is protecting The Arora Report members’ portfolios, there are additional hedges in the form of gold and silver, as well as hedges on semiconductor stocks and all of the Magnificent Seven stocks with the exception of Tesla (TSLA).  TSLA is not a portfolio holding.
  • These additional hedges on semiconductor stocks and the Magnificent Seven stocks have now become profitable.  Consider starting to book profits in small tranches on these hedges starting right now.  
• The stock market is very oversold and can quickly bounce after forced selling is done.
• 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 negative in Amazon (AMZN), NVDA, Microsoft (MSFT), Alphabet (GOOG), Meta (META), TSLA, and AAPL.

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 *** 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 *** 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 *** in oil in the early trade.  Smart money is *** in the early trade.

For longer-term, please see oil ratings.

Bitcoin

The Arora Report call that bitcoin (BTC.USD) is not a hedge is being proven right now.  Bitcoin is being aggressively sold and is now approaching $50,000.   Bitcoin whales unloaded bitcoin to unsuspecting retail investors last month.

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 weaker.

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 $2430, silver futures are at $27.19, and oil futures are at $72.74.

S&P 500 futures are trading at 5185 as of this writing.  S&P 500 futures resistance levels are 5210, 5256, and 5400: support levels are 5020, 4918, and 4852.

DJIA futures are down 1077 points.

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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.