WEEKLY STOCK MARKET DIGEST: TESLA EARNINGS AND NVIDIA COUNTERACT NEGATIVE IMPACT OF RISING YIELDS ON THE STOCK MARKET

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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.’

 

WILL TESLA’S GIANT MOVE HELP NASDAQ BREAK OUT?

Oct 25, 2024

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

Nasdaq Breakout?

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

Note the following:

  • The chart shows QQQ is in the resistance zone.
  • The chart shows that QQQ moved up on giant Tesla (TSLA) earnings.  Please see yesterday’s Morning Capsule for details on Tesla earnings.  After earnings, Tesla added a giant gain of $150B to its market capitalization.
  • Bulls are hoping that giant Tesla earnings combined with a potential short squeeze today will cause QQQ to breakout above the resistance zone.
  • Prudent investors should note that while S&P 500 has broken out, Nasdaq 100 has not.  Lately, tech stocks have lagged.  This is a reminder that it is important to diversify beyond tech stocks.
  • RSI on the chart shows that QQQ is a long way from being overbought, and thus it will be easier to push it higher.
  • In The Arora Report analysis, next week there are important big tech earnings.  These earnings will determine how QQQ behaves.  
  • This morning more buying is coming into the stock market after the release of durable goods orders.
    • Durable Orders came at -0.8% vs. -0.9% consensus.
    • Durable Orders Ex-Transport came at 0.4% vs. -0.1% consensus.
  • University of Michigan consumer sentiment will be released at 10am ET.  This data may be market moving.  Consumer sentiment is important because the consumer is 70% of the U.S. economy.
  • 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

A general election will be held in Japan this Sunday.  There is a risk of the ruling party losing control of parliament.  In The Arora Report analysis, if the ruling party loses control of parliament, there is a fair probability that it will be negative for the yen and Japanese stocks.

Europe

The European Central Bank’s (ECB) Chief Economist is out saying that inflation in Europe is expected to reach the central bank’s target in 2025.

Magnificent Seven Money Flows

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

In the early trade, money flows are neutral in 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 *** (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.

Very Very Short-Term Indicator

Our very, very short-term early stock market indicator is ***.  Remember, today is a Friday.  Short squeezes tend to occur on Fridays.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Gold

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

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

Oil

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

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

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.

S&P 500 futures are trading at 5871 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 109 points.

Gold futures are at $2743, silver futures are at $33.69, and oil futures are at $71.05.

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.

 

SENTIMENT FROM TESLA EARNINGS COUNTERBALANCES RISING YIELDS, GOOD FOR NVIDIA

Oct 24, 2024

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

Counterbalanced Crosscurrents

Please click here for a chart of Tesla stock (TSLA).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of TSLA stock is being used to illustrate the point.
  • The chart shows that prior to the release of Tesla earnings, TSLA stock was approaching the top band of the support zone.
  • After the close, Tesla reported blowout earnings.
  • Tesla earnings are significantly better than the whisper numbers.  Stocks move based on the difference between reporte numbers and whisper numbers.  Whisper numbers are the numbers analysts provide privately to their best clients.  These numbers are often different from the numbers the same analysts publish for public consumption.
  • The most important number in Tesla earnings is ex-credits gross margin.  Tesla handily beat the Street consensus of 15.1%.  Tesla reported 17.1%.
  • The chart shows that after the earnings TSLA stock is approaching the top band of the resistance zone.
  • RSI on the chart shows TSLA stock going quickly from very oversold to very overbought.  Historically, such thrust in RSI leads to a higher stock price.
  • If the historical precedence holds and the overall stock market does not tank, the probability of TSLA stock reaching the top resistance zone shown on the chart is about 70%.  There is a new buy signal on TSLA in ZYX Buy.
  • Tesla CEO Elon Musk’s comments about robotaxi deployment are adding to the optimism.  Musk’s comments about robotaxis are bringing in selling in Uber (UBER) and Lyft (LYFT).
  • Nvidia (NVDA) is the most important stock for this market.  Yesterday, due to rising yields, the NVDA breakout was failing.
  • Tesla is one of the biggest customers of NVDA.  Blowout earnings from TSLA are bringing in buying to NVDA stock.  As of this writing in the premarket, NVDA has moved above the key $140 level.
  • Markets always have crosscurrents.  We have been sharing with you that yields are rising.  In yesterday’s Morning Capsule we wrote,

Ten year Treasury yield has reached 4.24% as of this writing in the premarket.  As we wrote yesterday, when the yield crosses 4.25%, it will start catching smart money’s attention.  This is exactly what is happening today, and it is bringing selling into the stock market.

  • Yesterday, the yield on 10 year Treasuries reached 4.258% at its high.  This brought selling into the stock market.
  • We have also been sharing with you in advance that for the stock market to sustain at this level earnings will have to be very robust. Tesla earnings are counterbalancing rising yields. 
  • 20 year Treasury bond reopening auction results are poor, indicating less demand than expected.  Here are the details:
    • $13B 20 year Treasury bond reopening
    • High yield: 4.590% (When-Issued: 4.574%)
    • Bid-to-cover: 2.59
    • Indirect bid: 67.9%
    • Direct bid: 17.6%
  • Initial jobless claims came at 227K vs. 246K consensus.  This indicates that the jobs picture is stronger than expected.  This data is an additional data point that shows the Fed was overly aggressive when the Fed spiked the punch bowl with the 50 bps cut.  Initial 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.
  • 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.
See also  AMERICAN EXPRESS CEO SEES “NO LANDING,” WATCH NVIDIA FOR A BREAKOUT

Europe

European stocks are seeing buying on better than expected manufacturing PMI.

  • Flash Manufacturing PMI came at 45.9 vs. 45.1 consensus.
  • Flash Services PMI came at 51.2 vs. 51.4 consensus.

Buying in European stocks is bringing positive sentiment to the U.S. stock market in the early trade.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Amazon (AMZN), Alphabet (GOOG), Microsoft (MSFT), Meta (META), NVDA, and TSLA.

In the early trade, money flows are neutral 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.

Very Very Short-Term Indicator

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.

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 seeing buying on positive sentiment created by Tesla earnings.

Markets

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.

S&P 500 futures are trading at 5864 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 54 points.

Gold futures are at $2752, silver futures are at $34.26, and oil futures are at $71.26.

 

PAY ATTENTION TO SILVER BREAKOUT – DOLLAR DEMAND SURGES ON TRUMP ELECTION PROSPECTS

Oct 23, 2024

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

Silver And Dollar Contradiction

Please click here for a chart of silver ETF (SLV).

Note the following:

  • The chart is a monthly chart to give you a long term picture.
  • The chart shows that silver has broken out from a long base.
  • The chart shows an Arora signal for a trade around position.  A trade around position is a billionaire and hedge fund technique that can dramatically increase profits and reduce risks.
  • The chart shows that the prior resistance zone has now become the support zone.
  • The chart shows the trader magnet.  Note the price of the trader magnet.  This indicates that if the momentum builds, there may be very large gains ahead.
  • The chart shows that the trader magnet is exactly the point where The Arora Report gave a sell signal in 2011.
  • In one of the most remarkable calls in the history of silver, the Arora call to sell silver came exactly on the same day that silver topped.  At that time, almost everyone was extremely bullish on silver, and analysts were given a target of $100.  The Arora call was an extreme contrary call that was later proven spot on.  More remarkable was the Arora call to short sell silver on the same day that silver topped with a target of a 33% drop in a matter of weeks.  That call was also proven spot on.
  • The chart shows that the silver rally in 2020 failed.  The reason the rally failed was that it was driven almost entirely by two factors:
    • Meme crowd
    • Short squeeze
  • In The Arora Report analysis, there is a fair probability of another short squeeze and another meme crowd run.  
  • The chart shows The Arora Report call to backup the truck and buy silver just before silver took off in 2011.  The Arora backup the truck and buy signal was given when silver futures were in the $17 range.  Silver futures quickly shot up to $50 when the sell signal was given.
  • Buy zones change.  The chart shows one of the more recent silver buy zones.
  • Demand for the dollar is surging on the prospect of Trump being elected.  In The Arora Report analysis, there is an important contradiction.  Silver is priced in dollars.  Normally, when the dollar demand goes up, the price of silver falls.  Recently, the price of silver has been rising along with demand for the dollar – this is defying common sense.  The reason is that the momo crowd is so drunk on the momentum and the breakout that they are oblivious to the macro that impacts silver.  It is important that investors do a 360 degree analysis, and not just rely on momentum.    
  • In The Arora Report analysis, there is a good probability of selling coming into silver right around here.
  • Ten year Treasury yield has reached 4.24% as of this writing in the premarket.  As we wrote yesterday, when the yield crosses 4.25%, it will start catching smart money’s attention.  This is exactly what is happening today, and it is bringing selling into the stock market. 
  • Prudent investors should note that 1995 was the last time yields rose after the Fed cut interest rates.  At that time, Alan Greenspan was the Fed chair.  There are parallels to what is happening now.
  • Investors should also note that yesterday, volume in the stock market was very low.  This indicates a lack of conviction in stocks running up from here even though the talk is that S&P 500 is about to hit 6000.  It is more important for investors to pay attention to the walk, not the talk. It is common for large investors to pump up the stock market in the media only to sell their positions into the strength. 
  • 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.
See also  FATE OF NASDAQ 100 DEPENDS ON JUST FIVE EARNINGS THIS WEEK, OIL FALLS ON ISRAEL ATTACK ON IRAN

Magnificent Seven Money Flows

In the early trade, money flows are positive in Microsoft (MSFT).

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

In the early trade, money flows are negative in Apple (AAPL), Amazon (AMZN), Nvidia (NVDA), 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 *** 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.

Very Very Short-Term Indicator

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.

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 build of 1.643M 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) is range bound.

Markets

Interest rates are ticking up, and bonds are ticking down.

The dollar is stronger.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

S&P 500 futures are trading at 5871 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 264 points.

Gold futures are at $2752, silver futures are at $34.33, and oil futures are at $71.02.

 

NVIDIA BREAKS OUT, RISING YIELDS STARTING TO IMPACT STOCKS, INDIA CHINA BREAKTHROUGH

Oct 22, 2024

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

Nvidia Breaks Out

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

Note the following:

  • The chart shows NVDA stock has broken out above the resistance zone.  If the breakout sustains, the resistance zone will become a support zone.  
  • The chart shows that the breakout was not on heavy volume.  This indicates a lack of confirmation.  
  • On the bullish side, the breakout occurred on fairly positive money flows.   Considering the importance of this breakout for the entire stock market, based on historical patterns, the breakout should have been more forceful than it is in terms of price.  This factor makes the breakout suspect.  
  • The chart shows when The Arora Report gave a signal for a new trade around position on NVDA in anticipation of a breakout.  Trade around positions is a technique used by billionaires and hedge funds that can dramatically increase profits and reduce risk. 
  • The chart also shows one of the recent buy zones for NVDA core position.  This demonstrates the power of buy zones.  Many members of The Arora Report are holding NVDA from $12.55, when NVDA fell in the Arora buy zone just before it took off.      
  • In The Arora Report analysis, the sum total of the foregoing is that prudent investors still need to carefully watch NVDA and not become complacent.  
  • Yields continue to rise.  Earlier, the yield on U.S. 10 year Treasuries hit 4.2%.  The stock market is finally beginning to pay attention to rising yields. The momo crowd, oblivious to the rising yields, continues to buy stocks. In The Arora Report analysis, 4.25% is a key level.  If the yield rises above 4.25%, smart money selling may start coming into the stock market.  
  • In the early trade, the result of rising yields is net selling.   
  • 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.

India China Breakthrough

Both India and China are heavily nuclear armed.  They share a long border.  They fought a full scale war in 1962 and have a history of border skirmishes.  In 2022, the two countries engaged in hand to hand combat, causing the death of 20 Indian soldiers and four Chinese soldiers.    

Lately, the U.S. has been closely aligning with India to counter China.  

In an important geopolitical development for investors, India and China have achieved a breakthrough.  The two countries have reached an agreement in patrolling the 2000 mile border.  

Advantage Russia And China

The U.S. enjoys its prosperity in part due to the status of the dollar as the world’s reserve currency.  China and Russia have been hard at work to dethrone the king dollar.  China and Russia are receiving more support from India at the BRICS conference being held in Russia.  The other original BRICS countries are Brazil and South Africa.  As we have previously shared with you, six new countries have been added to BRICS: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.  Prudent investors should note that 45.9% of the world’s population lives in expanded BRICS nations.  

If most of your wealth is in the dollar, it is important to protect it.  Both ZYX Allocation and ZYX Emerging are geared toward protecting your wealth in dollars.    

Magnificent Seven Money Flows

In the early trade, money flows are positive in Microsoft (MSFT).

In the early trade, money flows are negative in Amazon (AMZN), Nvidia (NVDA), Alphabet (GOOG), Meta (META), 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.

Very Very Short-Term Indicator

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.

Gold

Gold is hitting a new high.  The breakout in silver continues.

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

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.

S&P 500 futures are trading at 5867 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/down 134 points.

Gold futures are at $2753, silver futures are at $34.68, and oil futures are at $70.51.

 

INVESTORS CHANGE BEHAVIOR TO HEDGING INSTEAD OF SELLING, 80% OF EARNINGS BETTER THAN EXPECTED

Oct 21, 2024

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

Hedging Instead Of Selling

Please click here for a chart of S&P 500 VIX Short-Term Futures ETN (VXX) and S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

  •  In September and October, institutional investors engaged in abnormal behavior.
    • Normally, there is selling during the seasonally weak period of September and October.
    • This year, due to the Fed spiking the punch with a 50 bps cut when the data did not support it, investors have taken to hedging instead of selling during the traditionally weak seasonal period.
  • VXX is a popular ETN used for hedging.  Previously for a short period, VXX had become unsuitable for hedging.  During that period, we recommended VIXY as an alternative.  Now, VXX is suitable for hedging, but investors must be judicious.
  • Normally, VXX moves inverse to SPY.  When SPY rises, VXX falls.
  • The chart shows a drop in SPY in August and the accompanying spike up in VXX.
  • The chart shows that as SPY rose after the carry trade unwind VXX fell but still sustained at a higher level compared to the low level in July.
  • The chart shows when the Fed cut interest rates by 50 bps.  We have been sharing with you that the data since the Fed cut shows that the 50 bps was not justified and resulted in the Fed spiking the punch bowl.
  • Spiking the punch bowl shows up on the chart as a rise in SPY since the interest rate cut.
  • The chart shows that as SPY has risen VXX has not fallen.
  • The chart shows that VXX was trading at $51.75 at the time of this writing.  If the normal pattern held, based on the rise in S&P 500, VXX should have fallen to about $35.
  • Why is VXX staying elevated, trading about 50% higher than it should have?  The reason is high demand for VXX for hedging.  The chart demonstrates that investors have been hedging instead of the traditional pattern of selling during September and October.  For those interested in learning more about hedging, please click here.
  • The prevailing wisdom among institutional investors is that since the stock market traditionally goes up after the election and this time the punch bowl has been spiked by the Fed, it is better to hedge than to sell.  
  • Yields on long bonds continue to rise.  The yield on 10 year Treasuries has now hit 4.136% as of this writing.  At the time of the Fed rate cut, most experts were predicting the yield to fall into the range of 3% – 3.25%.  You may recall that at the time of the Fed rate cut, The Arora Report made a contrary call that yields on long bonds would rise.  That call continues to prove spot on just like almost all calls from The Arora Report related to the Fed over the last 17 years.
  • In theory, rising yields should have dragged the stock market down, but that has not happened because investors are hedging instead of selling.  
  • We have previously written that for the stock market to sustain at this level and advance from here, earnings will need to be very robust.  In this regard, The Arora Report analysis shows that the data is bullish.  So far, 80% of the earnings that have been released are better than expected.  
  • This week is a very earnings heavy week.  7 DJIA stocks and 112 S&P 500 stocks are reporting earnings this week.  Earnings this week will have to be robust for the stock market to continue its advance.
  • As the stock market rises, insiders are taking advantage of the strength and selling stocks.
  • Adding to the positive sentiment is aggressive buying in nuclear stocks.  In the premarket, buying in nuclear stocks is extremely aggressive.  For those wanting next level information, part two of the podcast series titled “AI Is Power Hungry – Opportunities In Nuclear” will be live shortly.  The podcast is available in Arora Ambassador Club.  Please click here to fill out the form to get on the waitlist.
  • In news of note, Boeing (BA) and the machinists union have reached a tentative agreement.  Boeing is a national gem and contributes heavily to U.S. exports.
  • Stock futures were weak in the early morning, but as the morning has progressed, stocks are seeing aggressive buying.
  • 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.
See also  WEEKLY STOCK MARKET DIGEST: WHAT INVESTORS NEED TO KNOW AHEAD OF THE FED MEETING – IMPORTANT ECONOMIC DATA AND MARKET SENTIMENT

Europe

In Europe, there is some selling as PPI in Germany came below expectations.  PPI came at -0.5% vs. -0.2% consensus.

In The Arora Report analysis, if the European Central Bank (ECB) decides to make its decision based on data, the ECB is less likely to be as aggressive in rate cuts as the stock market is expecting. 

China

In China, banks cut their one year and five year prime rates by 25 bps.  In The Arora Report analysis, expectations were for 20 bps cuts.  

Magnificent Seven Money Flows

In the early trade, money flows are positive in Apple (AAPL).

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

In the early trade, money flows are negative in Microsoft (MSFT) 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 *** 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.

Very Very Short-Term Indicator

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.

Gold

Silver has broken out.  There is a new trade around position in ZYX Buy.

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) approached $70,000 before pulling back on enthusiasm about a possible Trump win.

Markets

Interest rates are ticking up, and bonds are ticking down.

The dollar is stronger.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

S&P 500 futures are trading at 5895 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 34 points.

Gold futures are at $2752, silver futures are at $34.435, and oil futures are at $69.84.

 

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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.

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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.

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