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.’

GOLD BREAKS TO A NEW HIGH AND CAN GO MUCH HIGHER, STOCKS AND GOLD RUNNING ON 50 BPS CUT

Sep 13, 2024

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

Running On 50 bps Rumor

Please click here for a chart of gold ETF (GLD).

Note the following:

• The chart shows when gold broke out back in March.
• The chart shows a new breakout in gold.  Gold is hitting an all time high.
• The chart shows that the breakout is on higher volume.  This shows conviction.
• RSI on the chart shows that gold is approaching the overbought level but is not yet there.
• The chart shows the support zone.  How gold reacts if it pulls back into the support zone will be a tell.
• Long time members of The Arora Report have very large gains in gold.  The Arora Report’s track record on gold is unmatched.  The Arora Report gave a signal to back up the truck and buy gold when gold was in the $600 range.  When gold reached $1904 in 2011, The Arora Report gave a signal to sell half of gold holdings and put a stop on the remaining gold at $1757.  Gold topped out on the same day that The Arora Report gave a sell signal and fell to about $1000.  During the fall in gold, members of The Arora Report made a lot of money by short selling gold.  The Arora Report signals caught the bottom in gold and have since been mostly bullish.
• Due to positioning, gold can go much higher.  Positioning is an important Wall Street mechanic.  Learning about Wall Street’s mechanics gives investors several big edges.  For investors, it is often difficult to learn about Wall Street mechanics because Wall Street professionals keep the nuances close to the chest due to their very high value.  Members of The Arora Report can easily learn Wall Street mechanics by listening to podcasts in Arora Ambassador Club.  There are also several podcasts on gold in the club.  To get on the waitlist, please click here to fill out the form.
• Gold ETF GLD is in the ZYX Allocation Model Portfolio.  Silver ETF SLV and gold miner NEM are in ZYX Buy Core Model Portfolio.
• You can access Arora gold and silver ratings as well as probabilities of various support and resistance zones and money flows from the main menu.  Arora gold ratings are used by private investors, hedge funds, institutions, bullion dealers, and jewelers across the globe.
• In The Arora Report analysis, the latest breakout in gold is due to a rumor of a 50 bps interest rate cut taking hold.  If the Fed does not cut by 50 basis points, there may be a pullback in gold.  A pullback will be a buying opportunity.  
• The same 50 bps cut rumor drove stocks, especially AI stocks, higher yesterday.  
• Among earnings of note, Adobe (ADBE) earnings were below whisper numbers as it is taking longer for Adobe’s AI products to gain traction compared to expectations in the market.  Also of note are earnings from RH (RH), the high end home furnishing company. RH earnings show that the consumer at the high end is resilient and spending.   
• 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 Apple (AAPL) and Alphabet (GOOG).

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

In the early trade, money flows are negative in Microsoft (MSFT), Meta (META), and Tesla (TSLA).

In the early trade, money flows are positive in S&P 500 ETF (SPY) and negative in 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 *** gold 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 *** oil in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

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 $2594, silver futures are at $30.54, and oil futures are at $70.06.

S&P 500 futures are trading at 5613 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 106 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.

HUMAN-LIKE REASONING ‘STRAWBERRY’ AHEAD, AGGRESSIVE NVIDIA BUYING, HOTTER INFLATION DATA

Sep 12, 2024

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

Human-Like Reasoning AI Ahead

Please click here for a chart of Nvidia stock (NVDA).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of NVDA is being used to illustrate the point.
• The chart shows that last week NVDA stock touched the top band of the support zone.
• RSI on the chart shows that NVDA was oversold when it touched the top band of the support zone.  Oversold stocks tend to bounce.  The chart shows this is exactly what was happening until yesterday.
• In yesterday’s Morning Capsule, we wrote:

In the early trade, the momo crowd is ignoring the data and aggressively buying the slight dip in AI stocks.  The buying in AI stocks is due to front running a speech by Nvidia’s Jensen Huang.  The buying is especially aggressive in Nvidia (NVDA).

• When Jensen Huang did not say anything new to run up NVDA stock, NVDA stock pulled back.  After NVDA stock pulled back, a new momo guru narrative started taking hold.  We wrote yesterday in a post in ZYX Buy and ZYX Allocation:

This afternoon, the momo crowd is again extremely aggressively buying semiconductor stocks as momo gurus’ new narrative takes hold.  Momo gurus have all but anointed Harris as the next president after last night’s debate performance.  Momo gurus’ new narrative is that Harris will not be harsh on China like Trump, and there will be no tariffs.  This will provide an opportunity for semiconductor companies to sell more semiconductors to China.

• We also wrote:

In The Arora Report analysis, there are two major problems with the new momo guru narrative:

• It is premature to anoint Harris as the next president.

• Even if Harris is elected president, she is not going to give away AI technology to China.

• As NVDA stock started moving up, analysts started reminding investors of the regurgitation of high demand from Huang’s speech and that Blackwell is coming.  This brought in additional buying.
• The chart shows that when NVDA stock broke above the mini support zone (previously mini resistance zone).
• As NVDA stock broke above the top band of the mini support zone, technical analysts started declaring the correction in NVDA over.  This brought in extremely aggressive buying in NVDA and other AI stocks going into the close.
• In the early trade prior to the release of PPI data, buying in NVDA and other AI stocks such as Advanced Micro Devices (AMD), Arm (ARM), Applied Materials (AMAT), Broadcom (AVGO), and Taiwan Semiconductor (TSM) was very aggressive.
• After release of PPI data, some selling is coming in to take advantage of the strength.
• Yesterday, we shared with you that CPI was hotter than expected.  This morning Producer Price Index (PPI) came hotter than expected.  Here are the details:
  • Headline PPI came at 0.2% vs. 0.2% consensus.
  • Core PPI came at 0.3% vs. 0.2% consensus.
• In The Arora Report analysis, after hotter PPI data, it will be safer for the Fed to not cut rates in September and wait for more data before cutting rates in October.  Further, in The Arora Report analysis, the Fed should definitely not cut interest rates by 50 bps.  Hotter inflation data is a negative for the stock market.  However, right now, the momo crowd is oblivious and aggressively buying stocks.  
• New AI developments are exciting, but investors need to do a 360 degree analysis.
• Jobless claims came at 230K vs. 229K consensus.  This indicates that the jobs picture is staying strong.  Jobless claims is a leading indicator and carries heavy weight in our adaptive ZYX Asset Allocation Model with inputs in ten categories.  In plain English, adaptiveness means that the model changes itself with market conditions.  Please click here to see how this is achieved.  One of the reasons behind The Arora Report’s unrivaled performance in both bull and bear markets is the adaptiveness of the model.  Most models on Wall Street are static.  They work for a while and then stop working when market conditions change.
• Adding to the excitement this morning is that OpenAI, the maker of ChatGPT, is about to release a new AI model called Strawberry.  Strawberry is capable of some human-like reasoning.   
  • OpenAI’s valuation has now vaulted to $150B.
  • We are working on a podcast on Strawberry. The podcast on human-like reasoning in AI and resulting investing opportunities and perils will be available in Arora Ambassador Club.  Please click here to get on the waitlist.
• 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.

Europe

The European Central Bank (ECB) has cut interest rates by 25 basis points. This is inline with the consensus.

The interest rate differential between the U.S. and Europe has now widened, putting pressure on the Fed to cut rates.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Alphabet (GOOG), Meta (META), and Nvidia (NVDA).

In the early trade, money flows are neutral in Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT).

In the early trade, money flows are negative in Tesla (TSLA).

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 gold market has become schizophrenic. Yesterday, gold fell on hotter CPI data.  Today, gold is rising on hotter PPI data.  In The Arora Report analysis, this kind of schizophrenic behavior often occurs before a decisive move, either to the upside or downside.  

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) was seeing buying with tech stocks prior to the release of PPI data.  However, after the release of PPI data, selling has come into bitcoin.

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 and bonds are range bound.

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 $2561, silver futures are at $29.42, and oil futures are at $68.07.

S&P 500 futures are trading at 5565 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 34 points.

HOTTER CORE CPI UPSETS STOCK MARKET BULLS’ HOPIUM, BUYING AHEAD OF NVIDIA’S JENSEN HUANG SPEECH

Sep 11, 2024

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

Hotter Core CPI

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 a slight pullback in the stock market after the release of CPI this morning.
• The chart shows that the stock market has made a double top in the resistance zone.  In the short term, this is a negative pattern.
• The chart shows that the stock market is consolidating between the support zone and resistance zone.
• RSI on the chart shows that the stock market has bounced from being very oversold and is now situated such that it can go either way.
• Core inflation data at the consumer level came hotter than expected.  Here are the details:
  • Headline CPI (Consumer Price Index) came at 0.2% vs. 0.2% consensus.
  • Core CPI came at 0.3% vs. 0.2% consensus.
• In theory, if the Fed was truly objective, the Fed would wait and not cut interest rates in September due to hotter core inflation.
• The market consensus is a 50 bps cut in September.
• In The Arora Report analysis, based on the CPI data, at a minimum the Fed should not cut by 50 basis points in September and certainly no more than 25 basis points.  Having said that, we have seen it again and again, that the Fed decides what it wants to do first and then tries to justify it as opposed to letting the data shape the decision.  As we have written before, Powell is itching to cut rates. Here, the Fed has a ready excuse to cut rates by citing its double mandate – maximum employment and price stability.  Since the labor market is weakening, the Fed may decide to ignore the price stability part of its mandate and justify a rate cut based on labor.  
• In The Arora Report analysis, what the Fed does has major implications for the stock market, especially AI stocks.  
• Of note is that the yields on long bonds are rising after the release of CPI data.  Over the last couple of days, the momo crowd has aggressively been buying bond futures on leverage.  These highly leveraged positions are losing money this morning.  Unless bonds recover, there may be a negative impact on the stock market.
• In the early trade, the momo crowd is ignoring the data and aggressively buying the slight dip in AI stocks.  The buying in AI stocks is due to front running a speech by Nvidia’s Jensen Huang.  The buying is especially aggressive in Nvidia (NVDA).
• The yen rallied on comments from Bank of Japan (BOJ) official Junko Nakagawa.  As the yen rallies, there is more concern about the carry trade.  The most popular carry trade has been borrowing funds in Japan to invest in AI stocks in the U.S.
• In The Arora Report analysis, the rise in the yen may stop, and the yen may even weaken as investors digest the new CPI data.  
• Sentiment is very positive.
• 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), Apple (AAPL), Amazon (AMZN), Nvidia (NVDA), Alphabet (GOOG), and Meta (META).

In the early trade, money flows are negative in Tesla (TSLA).

In the early trade, money flows are neutral in S&P 500 ETF (SPY) and positive 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 is seeing selling on hotter core CPI.

The momo crowd is selling gold in the early trade.  Smart money is inactive in the early trade.

For longer-term, please see gold and silver ratings.

Oil

Oil is very oversold.

API crude inventories came at a draw of 2.79M barrels vs. a consensus of a build of 0.7M barrels.

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) was sold after the presidential debate on Harris doing well.  Bitcoin bulls are hoping for a Trump win as Trump has closely aligned himself with bitcoin.  Large amounts of money from crypto whales appear to be flowing into Trump’s campaign.

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, bonds are ticking down.

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 $2537, silver futures are at $28.89, and oil futures are at $66.93.

S&P 500 futures are trading at 5501 as of this writing.  S&P 500 futures resistance levels are 5622, 5748, and 5748: support levels are 5400, 5256, and 5210.

DJIA futures are down 136 points.

SEE THIS CHART BEFORE BUYING AI STOCKS, APPLE LOSES $14B FIGHT

Sep 10, 2024

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

Major Negative Pattern Developing

Please click here for a chart of semiconductor ETF (SMH).

Note the following:

• A large number of stocks benefiting from artificial intelligence are semiconductor stocks.  Examples are Nvidia (NVDA), Advanced Micro Devices (AMD), Micron (MU), Arm (ARM), and Applied Materials (AMAT).
• The chart shows that a heads and shoulders pattern is developing in semiconductor ETF SMH.  The chart shows the left shoulder, the head, and the developing right shoulder.
• The chart shows the neckline.
• The pattern will be complete only if the neckline is broken.  If the neckline is not broken, the developing pattern will be negated.
• The foregoing is a heads up for those who are buying AI and semiconductor stocks and ETFs that are now falling in the buy zones.  In practical terms, there is no change in the guidance given in the Afternoon Capsule on September 6.
• The head and shoulders pattern works about 70% of the time.
• RSI on the chart shows that semiconductors are oversold.  Oversold stocks and ETFs tend to bounce.
• Yesterday, Apple (AAPL) introduced the iPhone16.  At The Arora Report, we paid careful attention to the event. There is no change to the analysis The Arora Report provided you in advance of the event.
• In yesterday’s Morning Capsule, we wrote:

Apple is clearly anxious about today’s event, as demonstrated by the fact that this event is taking place on a Monday, whereas Apple generally does not hold major events on Mondays.  Apple is trying to get ahead of a potential European Commission decision on Apple being forced to pay $14B in taxes.

• Apple’s anxiety was justified.  Apple has lost the $14B tax fight.  Apple’s loss means that going forward Apple will have a higher tax burden in Europe.
• CPI data will be released tomorrow at 8:30am ET.  Here are the expectations:
  • Headline consensus is 0.2%.
  • Core consensus is 0.2%.
• The market is positioned for CPI to be benign.  If CPI is much hotter than expected, due to market positioning, significant downside is probable.  Positioning is an important Wall Street mechanic.  Understanding Wall Street mechanics gives investors several big edges.  Due to their high value, Wall Street professionals keep the details of Wall Street mechanics close to their chest.  The best way to learn Wall Street mechanics is to listen to the podcasts in Arora Ambassador Club.  To get on the waitlist to join the club, please click here to fill out the form.
• Sentiment has quickly turned very positive.
• There are crosscurrents in the markets based on buying and selling by those who are driven by partisan politics ahead of the presidential debate between Harris and Trump.
• 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), Microsoft (MSFT), Meta (META), NVDA, and Tesla (TSLA).

In the early trade, money flows are negative in 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 *** 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 range bound.

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 $2537, silver futures are at $28.80, and oil futures are at $67.90.

S&P 500 futures are trading at 5492 as of this writing.  S&P 500 futures resistance levels are 5500, 5622, and 5748: support levels are 5400, 5256, and 5210.

DJIA futures are up 41 points.

INVESTORS PIN HOPE ON APPLE INTELLIGENCE, SHORT SQUEEZE AND WEAKER YEN DRIVE STOCK MARKET HIGHER

Sep 9, 2024

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

Hope Pinned On Apple Intelligence

Please click here for a chart of Apple stock (AAPL).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of AAPL stock is being used to illustrate the point.
• The chart shows when the iPhone 15 was launched.
• The chart shows the move from iPhone 15 launch to today’s iPhone 16 launch.
• Investors are hopeful that the move in AAPL stock from the iPhone 16 launch to the iPhone 17 will be much bigger compared to the stock move between the launch of iPhone 15 and iPhone 16.
• The chart shows that even though investors have stars in their eyes, for the short term, AAPL stock has traced a negative pattern.
  • The chart shows that AAPL stock hit the top of the resistance zone in July.
  • The chart shows that AAPL stock failed to penetrate the resistance zone.
  • The chart shows that after AAPL stock failed to penetrate the resistance zone, it fell all the way to the bottom band of the support zone.
  • The chart shows that AAPL stock rallied after falling to the bottom of the support zone.
  • The chart shows that the rally stopped at the low band of the resistance zone.
• Investors are mostly focused on hopes that Apple Intelligence, the name for Apple’s artificial intelligence, will start a new super cycle of iPhone sales, and thus lift Apple sales from being sluggish for a long time.
• Even though there is a lot of exuberance about Apple Intelligence, prudent investors need to remember that the momo crowd focuses only on the bullish factors and ignores the negative factors.  In contrast, smart money takes into account both positive and negative factors.
• There are several negative factors about Apple that the stock market is ignoring right now that prudent investors should be aware of:
  • Apple intelligence will likely not be available in the European Union and China.
  • Even in the U.S., most Apple Intelligence features will not be available right away.
  • The launch of all Apple Intelligence features is staggered over a long period of time.
  • The fact that Apple Intelligence that will initially be present in the iPhone is only half baked may delay the super cycle.
  • The marketing hype about Apple Intelligence is way more than reality.
  • Apple does not own its AI.  Apple is licensing its AI from OpenAI.
  • The model behind the AI that Apple is offering is not running on the iPhone or on Apple servers.  The model appears to be running on Nvidia (NVDA) based servers owned by Microsoft (MSFT).
  • Apple has been receiving $20B per year from Google (GOOG) to make Google the default search.  A judge has ruled that Google is a monopolist.  In due course, the government may force Google to stop paying $20B to Apple.
  • In China, Apple is losing market share to Huawei.
    • Many Chinese believe that Huawei phones are superior to the iPhone.
    • Huawei is trying to crash Apple’s iPhone part by introducing the world’s first tri-fold phone.
    • Due to geopolitics between the U.S. and China, nationalist sentiment in China is rising against the U.S.  This poses a significant risk to Apple since about 20% of Apple sales come from China.
• We understand that investors are very loyal to Apple.  Before sending us hate email for doing a comprehensive analysis, note that Apple is the largest position in the ZYX Buy Model Portfolio.  Long time members of The Arora Report are long AAPL stock from $4.68.  They are now sitting on an unrealized gain of 4620%.
  • Those who own AAPL stock or are interested in AAPL stock should carefully look at where AAPL stock sits in the risk reward matrix.  You can see the risk reward matrix by clicking on Model Portfolio on the main menu in ZYX Buy.
  • Note that Warren Buffett has been selling AAPL stock.
• Prudent investors should also be aware that Apple can easily manipulate its stock.  After the last Apple event when Apple had carefully staged to run up its stock, Apple stock started falling.  Apple aggressively bought its own stock to cause a technical breakout.  
• Apple is clearly anxious about today’s event, as demonstrated by the fact that this event is taking place on a Monday, whereas Apple generally does not hold major events on Mondays.  Apple is trying to get ahead of a potential European Commission decision on Apple being forced to pay $14B in taxes.  
• There is aggressive buying in stocks this morning due to two reasons:
  • A short squeeze is occurring. The technical pattern with the stock market, especially AI stocks traced on Friday afternoon, historically leads to a selloff on Monday.    When stock futures did not open much lower on Sunday night, a short squeeze started.  As the night went on, the short squeeze accelerated.
  • The reason stock futures did not open much lower is because Japanese yen weakened.  The weakening yen has saved AI stocks from a blood bath this morning.  
  • The fact that a short squeeze and weakening yen saved the stock market means that prudent investors should not become complacent.  Pay attention to the protection band.  See the Protection Band And What To Do Now section below.    
• 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), NVDA, MSFT, GOOG, Meta (META), and Tesla (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 *** 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 *** 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 range bound.  Bitcoin ETFs have seen a negative money flow of $1.2B in the last eight days.  This is the longest streak of negative money flows in bitcoins ETFs.   

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 $2534, silver futures are at $28.56, and oil futures are at $67.88.

S&P 500 futures are trading at 5456 as of this writing.  S&P 500 futures resistance levels are 5500, 5622, and 5748: support levels are 5400, 5256, and 5210.

DJIA futures are up 296 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.