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.’
AI STOCKS RIPPING, BARN BURNER JOBS REPORT – COULD POWELL BE WRONG?
Oct 4, 2024
To gain an edge, this is what you need to know today.
Barn Burner Jobs Report
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 rallying on the jobs report.
- The chart shows that the stock market is above the support/resistance zone.
- The just released jobs report is a barn burner. The report is a lot stronger than the consensus. Here are the details of the jobs report:
- Nonfarm payrolls came at 254K vs. 135K consensus.
- Nonfarm private payrolls came at 223K vs. 125K consensus.
- Average hourly earnings came at 0.4% vs. 0.3% consensus.
- Average work week came at 34.2 hours vs. 34.3 hours consensus.
- Unemployment rate came at 4.1% vs. 4.2% consensus.
- At a minimum, this data point shows that Powell could have been wrong. When Powell cut interest rates by 50 bps, he explained it away by predicting labor weakness. The just released jobs report shows that there is no labor weakness.
- Before and after the 50 bps rate cut, we shared with you The Arora Report analysis that the data did not support a 50 bps rate cut. Today’s jobs report clearly proves that The Arora Report analysis was correct and the Fed may have made a mistake. For the last 17 years, almost every time The Arora Report has been different from the Fed, subsequently The Arora Report analysis has proven correct.
- Bonds are falling on the strong report.
- Stocks are seeing extremely aggressive buying after the report. In the short term, it is bullish in that Powell gave the stock market a big gift of a 50 bps cut predicting labor weakness, but there is no labor weakness.
- After the jobs report, AI stocks are ripping. In the early trade, buying is extremely aggressive in AI stocks.
- This data is going to be ammunition for those who have been saying that the 50 bps rate cut was designed to help Harris win the election even though the Fed continues to publicly say that the Fed does not consider politics. Keep in mind, Trump has said that he would not reappoint Powell.
- Adding to the optimism is that dock workers have suspended their strike.
- In the longer term, this jobs data raises the probability that inflation will not come down to the Fed’s 2% target and the Fed will once again be proven wrong.
- As a note of caution, this is only one piece of data. At The Arora Report, we will be carefully watching additional pieces of new data as it comes. This is exactly what prudent investors should do.
- ISM Non-Manufacturing Index yesterday came at 54.9 vs. 51.6 consensus. In The Arora Report analysis, this data also shows that the economy is strong.
- 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 *** (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is *** stocks 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 strong jobs data.
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 seeing *** on strong jobs data.
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 seeing buying on strong jobs data.
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 $2653, silver futures are at $31.81, and oil futures are at $74.15.
S&P 500 futures are trading at 5797 as of this writing. S&P 500 futures resistance levels are 5926 and 6017 : support levels are 5748, 5622, and 5500.
DJIA futures are up 257 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.
SPOT ON ARORA CALL ON BONDS, INSANE DEMAND FOR NVIDIA CHIPS, ANXIETY BUILDS ABOUT ISRAEL AND IRAN
Oct 3, 2024
To gain an edge, this is what you need to know today.
Spot On Arora Call
Please click here for a chart of 20+ year Treasury bond ETF (TLT).
Note the following:
- The chart shows when the Fed rate cut was announced.
- At the time the Fed rate cut was announced, this was the landscape:
- Wall Street firms were tripping over themselves to rush their clients into buying long bonds.
- The momo crowd was aggressively buying long bonds.
- Technically, long bonds had broken out.
- Trading services were sending signals to their members to go all in on buying long bonds.
- Almost everyone was predicting that bond yields would fall much lower.
- Long bonds move inversely to the yield. When yield goes higher, long bonds fall.
- On the morning before the Fed rate cut announcement, The Arora Report made a bold call contrary to the prevailing wisdom. The call was inline with prior calls from The Arora Report that long bond yields may rise and long bonds may fall after the rate cut. We wrote:
One unintended consequence may be a rise in long term yields in due course.
- The chart shows that The Arora Report’s bold call against the prevailing wisdom has proven spot on so far.
- The chart shows that long bonds have fallen and yields have risen.
- The chart shows that the breakout above the resistance zone failed. Ironically, this breakout was the reason legions of investors who rely only on traditional technical analysis bought long bonds on the breakout. To make matters worse, most of such bond trading positions are taken on high leverage. Due to high leverage, these positions now have substantial losses.
- This is a cautionary tale that illustrates why investors should not rely solely on one form of analysis such as traditional technical analysis. Investors should rely on systems, such as The Arora Report system, that synergistically combine in an optimized manner the best elements of the following:
- Macro analysis
- Fundamental analysis
- Technical analysis
- Quantitative analysis
- This is a cautionary tale that illustrates why investors should not rely solely on one form of analysis such as traditional technical analysis. Investors should rely on systems, such as The Arora Report system, that synergistically combine in an optimized manner the best elements of the following:
- Money is flowing into the safety of Treasuries due to anxiety about potential escalation of conflict in the Middle East. In The Arora Report analysis, if it was not for the escalation in the Middle East, TLT would have been much lower now.
- Going forward, investors need to remember the probability adjusted risk reward ratio in long bonds is not great. Long bonds will work only if there is a major recession or a major war breaks out. However, investors need to remember that the stock market is counting on no recession. Investors are suffering from cognitive dissonance – they are buying stocks believing that there will not be a recession, they are buying bonds believing there will be a recession.
- If inflation starts rising again, investors in long bonds will experience major losses. Investors are very short sighted and are also losing track of the fact that the election is not far away. Both Trump and Harris are committed to more reckless borrowing and more reckless spending. This will increase the supply of Treasuries. How can a higher supply of Treasuries be good for long bonds? The answer is that it is not good for long bonds.
- On the positive side, Nvidia (NVDA) CEO Jensen Huang says Blackwell production is in full swing and the demand for Blackwell is insane.
- Also on the positive side, OpenAI has raised $6.6B in new funds at a valuation of $157B. This valuation is significantly higher than the last round.
- Anxiety is building among investors regarding the upcoming strike on Iran by Israel. There are reports that Israel wants to attack Iran’s nuclear installations, but Biden is trying to restrain Israel.
- Initial jobless claims came at 225K vs. 223K consensus. Jobless claims are not showing weakness in the jobs picture. Powell saw weakness in the jobs picture, and that was one of his justifications for the 50 bps rate cut. More information will become available about the jobs picture tomorrow when the official jobs report is released at 8:30am ET. The jobs report has the potential to be a major market moving event.
- ISM Non-Manufacturing Index will be released at 10am ET. The consensus is 51.6. This data may be market moving.
- 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.
China
The stock buying stampede in Hong Kong is slowing. Mainland markets are closed. Prudent investors are taking advantage of the rally to sell. The Arora Report plan continues to be to buy on a dip. The new buy zones for Mainland China ETF (ASHR) and Hong Kong ETF (FXI) are in ZYX Emerging.
India
Growth concerns are emerging in India. Money is beginning to flow out of India and into China. There are new signals on India ETF (EPI), India Growth Leaders ETF (GLIN), and India Small Cap ETF (SMIN) in ZYX Emerging.
Magnificent Seven Money Flows
In the early trade, money flows are positive in NVDA.
In the early trade, money flows are neutral in Microsoft (MSFT).
In the early trade, money flows are negative in Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), 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 *** 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 *** along with junk stocks.
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 $2666, silver futures are at $31.83, and oil futures are at $71.94.
S&P 500 futures are trading at 5744 as of this writing. S&P 500 futures resistance levels are 5926 and 6017: support levels are 5748, 5622, and 5500.
DJIA futures are down 146 points.
OPPORTUNITY IN MISSILE DEFENSE STOCKS, ONCE IN A CENTURY BUYING STAMPEDE IN HONG KONG
Oct 2, 2024
To gain an edge, this is what you need to know today.
The Power Of Missile Defense
Please click here for a chart of RTX Corporation stock (RTX).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of RTX stock is being used to illustrate the point.
- Yesterday, Iran fired about 180 ballistic missiles on Israel. Israel and the U.S. were able to intercept most of these missiles with missile defense systems. These missiles reached Israel in 12 minutes. The defense was impressive considering there were no fatalities.
- What happened in Israel yesterday shows the power of missile defense systems and illustrates the opportunity for investors in missile defense stocks.
- RTX is The Arora Report’s favorite missile defense stock. RTX is in the ZYX Buy Core Model Portfolio.
- The chart shows that RTX has broken out on the success of missile defense in Israel.
- RTX is a joint developer of the Iron Dome used in Israel. RTX is best known for its Patriot Air And Missile Defense System. RTX also produces several other missile defense systems and aircraft engines.
- RTX entered The Arora Report portfolio when the stock experienced a massive drop on the news of cracks in Pratt & Whitney engines. The Arora Report uses over 50 different strategies. RTX belongs to the strategy of buying a good company where the stock is down due to a fixable technical problem.
- The chart shows the power of Arora buy zones. Buy zones allow investors to buy stocks and ETFs when the probability adjusted risk reward is more favorable. This is one of the keys to members of The Arora Report achieving unrivaled risk adjusted returns over the long term. Risk and reward are two sides of the same coin in investing. Smart money focuses on risk adjusted returns. In contrast, the momo crowd focuses only on rewards – the result is that the momo crowd goes through volatile cycles of making money and losing money, and in the end, accumulating far less than smart money.
- For those following the Good Way, the Buy Now rating on RTX has been yes.
- The chart illustrates the power of a billionaire and hedge fund technique known as a trade around position. A trade around position can dramatically increase profits and reduce risks.
- The chart shows that the RTX trade around position was started at an average of $80.70. The position has over 50% gain as of this writing. The trade around position is separate and distinct from the core position.
- Peace is not about to break out in the world. As such, all investors should consider a defense stock or ETF in their portfolio.
- For those interested in ETFs, the ETF of choice is ITA. The buy zone for ITA is in the ZYX Allocation Model Portfolio. For long time members, the ITA position is nicely profitable.
- ADP is the largest private payroll processor in the country. ADP uses its data to provide a glimpse of the employment picture ahead of the official jobs report that will be released on Friday. ADP employment change came at 143K vs. 120K consensus. This indicates that the jobs picture is staying strong.
- Previously, JOLTS job openings came at 8.04M, higher than expectations.
- ISM Manufacturing Index came at 47.2 vs. 47.4 consensus.
- 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.
Buying Stampede
Stocks are experiencing a once in a century buying stampede in Hong Kong. Stocks in Hong Kong rose 7%. Property developers rose 47%, and broker stocks rose 35%. Hong Kong ETF FXI is in ZYX Emerging.
Magnificent Seven Money Flows
In the early trade, money flows are neutral in Microsoft (MSFT) and Meta (META).
In the early trade, money flows are negative in Amazon (AMZN), Nvidia (NVDA), Alphabet (GOOG), Tesla (TSLA), and Apple (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 *** gold in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
API crude inventories came at a draw of 1.458M barrels vs. a consensus of a draw of 2.1M 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) is seeing selling along with junk stocks.
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 $2675, silver futures are at $32.13, and oil futures are at $71.91.
S&P 500 futures are trading at 5748 as of this writing. S&P 500 futures resistance levels are 5926 and 6017: support levels are 5748, 5622, and 5500
DJIA futures are up 7 points.
POWELL STOCK MARKET DIP AGGRESSIVELY BOUGHT, IMPORTANT DATA AND BLIND MONEY AHEAD
Oct 1, 2024
To gain an edge, this is what you need to know today.
Important Data Ahead
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 dip in the market caused by Powell’s remarks. Powell pushed back against aggressive rate cut bets that the momo crowd has placed. Powell clearly said that the Fed plans on two 25 bps cuts this year assuming the economy stays on the expected trajectory. The momo crowd is counting on 100 bps cut. Even non-momo investors are betting on 75 bps cuts.
- The chart shows the dip on Powell’s remarks was aggressively bought, running the stock market higher than where it was before Powell’s remarks. The buying appears to be related to quarter end window dressing.
- Momo gurus’ new narrative to persuade their followers to buy stocks is to not trust the Fed. Prudent investors always need to be mindful that momo gurus’ interest is not the same as prudent investors’ best interest.
- There are two important pieces of data ahead.
- JOLTS job openings data will be released at 10am ET.
- ISM Manufacturing index will also be released at 10am ET.
- Both of these pieces of data may be market moving.
- The most important economic data this week is the jobs report, also known as the mother of all reports, that will be released at 8:30am ET on Friday.
- Expect blind money to flow into the stock market today and tomorrow. Blind money is the money that flows into the stock market on the first two days of the month without any analysis irrespective of market conditions.
- East coast port workers have gone on strike. FedEx (FDX) is a beneficiary. FDX was recently added to the portfolio that surrounds the Core Model Portfolio in ZYX Buy, taking advantage of the dip on earnings. The Arora Report utilizes over 50 different strategies. FDX belongs to the strategy of earnings patterns that historically work. The FDX trade is now profitable.
- In important news for prudent investors, Michael Dell has sold $1.22B in Dell (DELL) shares. Michael Dell is taking advantage of the run up in Dell shares on the AI frenzy. The momo crowd is oblivious and has been an aggressive buyer of DELL stock.
- Prudent investors should also note that there is a consistent pattern of insiders selling AI stocks that have run up. It is important to pay attention to the protection band as well as to separate posts indicating putting on hedges or taking partial profits.
- 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.
Japan
Japan’s new prime minister is likely to favor tighter fiscal policy and tighter monetary policy. Such tighter policies will be good for the Japanese yen. There is a position in yen using ETF FXY in ZYX Allocation. On the negative side, tighter fiscal and monetary policies in Japan increase the risk to the carry trade. Lately, in the carry trade, funds have been borrowing in yen and investing in U.S. stocks, especially AI stocks.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Alphabet (GOOG), Meta (META), Nvidia (NVDA), and Tesla (TSLA).
In the early trade, money flows are negative in Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT).
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 *** 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.
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 $2675, silver futures are at $31.65, and oil futures are at $67.27.
S&P 500 futures are trading at 5809 as of this writing. S&P 500 futures resistance levels are 5926 and 6017: support levels are 5748, 5622, and 5500.
DJIA futures are down 116 points.
FOMO DRIVES BIGGEST GAIN IN SHANGHAI SINCE 2008, CHINESE MARKET BREAKS THE NEGATIVE PATTERN
Sep 30, 2024
To gain an edge, this is what you need to know today.
Chinese Market Breaks Negative Pattern
Please click here for a chart of Mainland China ETF (ASHR).
Note the following:
- In prior Morning Capsules, we shared with you details of China’s stimulus program. Prior to last Tuesday, Chinese stocks had been beaten down and had been trading at low valuations.
- The chart shows that the Chinese stock market has broken the negative pattern of lower highs.
- The chart shows that the pattern existed from the 2021 peak until last week.
- When the rally first started, the concern was that this rally would also fail like prior rallies. Initially, it was simply prudent to consider the rally in Chinese stocks last week to be suspect. The chart shows that even the COVID opening rally failed, and the subsequent AI rally also failed.
- The chart shows that the rally is on high volume. This indicates conviction and provides confirmation for the rally.
- RSI on the chart shows that the Chinese stock market is very overbought. Overbought markets tend to pullback in the short term.
- In Shanghai, the CSI 300 jumped 8.5%. This is the biggest single day gain since 2008.
- The five day gain in Shanghai is the strongest since 1996.
- The chart shows that this rally has decisively broken the downtrend like a rocketship.
- From a technical perspective, such strong rallies tend to take stocks higher after a brief pullback.
- The rally is partly driven by fear of missing out (FOMO) among foreign investors who are rushing into China.
- Money is flowing out of safer Chinese 30 year Treasury bonds and into Chinese stocks. Chinese 30 Treasury bond futures fell to a two month low after losing 3.6% last week. This is the worst quick loss ever.
- For the day, the economic data from China is poor. China’s PMIs are weak. Here are the details:
- Manufacturing PMI came at 49.8 vs. 49.4 consensus.
- Non-manufacturing PMI came at 50.0 vs. 50.4 consensus.
- A number less than 50 is considered economic contraction.
- Expectations are that China’s PMIs will spike up in the coming months due to government stimulus.
- There will be new buy zones on Mainland China ETF ASHR and Hong Kong ETF FXI in ZYX Emerging. There is also a new buy zone for emerging markets consumer ETF ECON in ZYX Emerging. Emerging market consumers are getting rich and provide one of the best opportunities for long term investors. Instead of chasing the price on Chinese stocks and ETFs, prudent investors should consider being highly selective. For additional information, please see ZYX Emerging.
- In The Arora Report analysis, investors are ignoring two risks in China:
- The traditional geopolitical risk, especially related to Taiwan.
- The risk of Trump being elected. Trump is proposing 100% – 200% tariffs on Chinese goods. Such tariffs will negate much of the benefit from the Chinese government stimulus.
- Unlike last week, the optimism from China is not carrying to the U.S. for the following reasons:
- Stellantis (STLA), the owner of Chrysler, Jeep, and Fiat, is giving poor guidance.
- Volkswagen (VWAGY) is also providing poor guidance.
- Stocks of General Motors (GM) and Ford (F) are coming under pressure.
- Negative sentiment from Europe is carrying to the U.S.
- East coast dock workers may go on strike, disrupting commerce.
- Also not helping this morning is that quarter end window dressing is almost over. In window dressing, some money managers buy the best performing stocks of the quarter so that they can show their clients in the quarter end reports that they were holding the best performing stocks. This was partially the reason for the recent strength in Nvidia (NVDA) and other AI stocks.
- 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).
In the early trade, money flows are neutral in Microsoft (MSFT), Alphabet (GOOG), and Meta (META).
In the early trade, money flows are negative in Tesla (TSLA), Amazon (AMZN), and NVDA.
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 *** stocks 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
Bitcoin (BTC.USD) is seeing some selling along with junk stocks.
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 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 $2660, silver futures are at $31.63, and oil futures are at $68.39.
S&P 500 futures are trading at 5778 as of this writing. S&P 500 futures resistance levels are 5926 and 6017: support levels are 5748, 5622, and 5500.
DJIA futures are down 82 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.