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.’

MARKET WAKES UP SHOCKED THAT DATA DOES NOT SUPPORT RATE CUTS, MARKET MAKERS PICKING MOMOS’ POCKETS

Dec 20, 2024

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

Market Shocked

Please click here for a chart of 20+ year Treasury bond ETF (TLT).

Note the following:

• The chart shows that TLT entered the support zone.  On October 8, about one month before the election, we wrote in the Morning Capsule,

In the event of a one party sweep, TLT can potentially fall to the bottom support zone.

• The chart shows that the Arora election call as it relates to bonds has proven spot on.
• RSI on the chart shows that bonds are oversold.  Oversold markets tend to bounce.
• A bounce is happening, as of this writing, after the data released at 8:30am ET.  Bonds were down before the data.
• Earlier this morning, Nasdaq futures were down about 1.5% on top of the prior drop.  The market has suddenly woken up shocked that the data does not support aggressive rate cuts.  Of course, as a member of The Arora Report, you already knew that the data did not support aggressive rate cuts.  We have stated and restated this analysis several times over the last two months.
• The market waking up shocked to the data is resulting in selling.
• PCE is the Fed’s favorite inflation gauge.  The just released PCE data is helping the stock and bond markets bounce as the data is better than the consensus.  Here are the details:
  • PCE came at 0.1% vs. 0.2% consensus.
  • Core PCE came at 0.1% vs. 0.2% consensus.
• Prudent investors pay attention to personal income and spending because the U.S. economy is 70% consumer based.  The data shows that income rose less than expected, and as a result, the consumer is finally pulling back.  In The Arora Report analysis, this is not good news for the stock market.  The stock market has been going higher, in part, because of the consumer buying binge.  Here are the details of the new personal income and spending data:
  • Personal income came at 0.3% vs. 0.4% consensus.
  • Personal spending came at 0.4% vs. 0.5% consensus.
• In Washington DC, plan A and plan B to avert a government shutdown have failed.  Speaker Johnson has just said that the House will vote on plan C this morning.
• In The Arora Report analysis, if there is a government shutdown and if the market drops as a result, the drop will be a buying opportunity.  
• After a major additional selloff in the stock market earlier this morning, a relief rally has started after the release of PCE data.
• Today is the largest ever option expiration.  The ratio of calls to puts is ten to one, reflecting the extremely aggressive behavior of the momo crowd on one hand and complacency by most investors on the other hand.  Please see yesterday’s Morning Capsule for details.
• So far, market makers are successfully picking the pockets of the momo crowd.
• If the relief rally that just started fails, accounts of many momos who mostly buy out of money call options will be totally wiped out by the end of the day.
• As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents.   Please scroll down to see the protection band. The protection band is one of the large number of unique edges that are available to members of The Arora Report.

Magnificent Seven Money Flows

In the early trade, money flows are negative in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).

In the early trade, money flows were very negative in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) until the release of PCE data.  Money flows have turned positive in both after the release of PCE data.

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 ***.  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 seeing buying after release of PCE 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

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) was being aggressively sold this morning but is experiencing a relief rally as of this writing after release of economic data.

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 5902 as of this writing.  S&P 500 futures resistance levels are 5926, 6017, and 6131: support levels are 5748, 5622, and 5500

DJIA futures are down 155 points.

Gold futures are at $2628, silver futures are at $29.41, and oil futures are at $68.83.

Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror.  The proprietary protection band from The Arora Report is very popular.  The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash, Treasury bills, short term fixed income, 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.

BIGGEST EVER OPTION EXPIRATION AHEAD – MARKET MAKERS WILL ATTEMPT TO WIPE OUT SOME MOMOS

Dec 19, 2024

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

Wipe Out Some Momos

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 drop in the stock market after the Fed decision yesterday.
• The chart shows the drop yesterday was on higher volume.  This indicates conviction.
• Yesterday was the biggest drop after the Fed decision since 2001.
• Now, the Dow Jones Industrial Average (DJIA) has been down for ten days in a row.  This is the longest losing streak since 1974.
• Wall Street’s fear gauge VIX experienced the second largest one day rise ever.
• The market was clearly surprised by the hawkish Fed cut, but of course, as a member of The Arora Report, you had advance notice.  The title of the Morning Capsule on December 13 read “MORNING CAPSULE: HAWKISH FED RATE CUT AHEAD, BOLD AI PREDICTION FOR 2027.”
• As we have been sharing with you, sentiment is at extreme positive.
  • Remember, extreme positive sentiment is a contrary signal.  It is a sell signal.  It is worth reminding, sentiment is not a precise timing indicator.
  • When sentiment is extreme positive, there is a risk to the market for a selloff.  All it needs is a trigger.  It is akin to a lot of dry tinder building up on the forest floor.  It builds up until there is a spark that causes a fire.  In this extreme positive market, the spark came yesterday in the form of the hawkish rate cut.
• Quad witching is tomorrow.  In quadruple witching, stock index futures, futures options, stock options, and single stock futures expire.  Quadruple witching often leads to volatility.
• Tomorrow is the biggest ever option expiration.
• Among expiring options there are ten calls for every one put.  Calls disproportionately have strike prices higher than where the market is trading now.  If the market does not go higher than where it was before the drop on the hawkish cut, the calls will expire worthless.
• Market makers who sold the calls will come out ahead if the calls expire worthless.  Market makers are going to try to do everything they can to put a lid on the market rising over the next two sessions, so the calls expire worthless.
• The momo crowd has been buying these calls aggressively.  Some momos have their entire accounts in out of money calls.  If the market does not rise by tomorrow, these accounts will be completely wiped out.
• The momo crowd has been trained to buy the dip.  Starting at 3:45pm ET yesterday, the momo crowd started aggressively buying the dip.  The aggressive buying continued in the after market and is continuing in the premarket this morning.
• In contrast to market makers, the momo crowd wants the market to go higher so that their call options do not expire worthless.  If the momo crowd starts becoming halfway successful in pushing the market higher, market makers will be forced to hedge their position by buying the underlying stocks.  This is what leads to a squeeze in the market to the upside.  The easiest way to develop a deeper understanding of these market mechanics is to listen to the podcasts in Arora Ambassador Club.
• Just released GDP data shows that the economy was stronger in the last quarter than expected.  Here are the details:
  • Q3 GDP Third Estimate came at 3.1% vs. 2.8% consensus.
  • GDP Deflator Third Estimate came at 1.9% vs. 1.9% consensus.
• Initial jobless claims came at 220K vs. 237K consensus.
• Personal incoming and spending as well as PCE will be released tomorrow at 8:30am ET and may be market moving.
• University of Michigan Consumer Sentiment will be released tomorrow at 10am  ET and 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.

Japan

The Bank of Japan left rates unchanged.  This is helping crypto because investors have been borrowing in yen and buying cryptos.

England

The Bank of England decided to leave interest rates unchanged in light of “heightened uncertainty.”

Magnificent Seven Money Flows

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

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

In the early trade, money flows are neutral 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 *** 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 weaker after a strong run up yesterday.

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 5982 as of this writing.  S&P 500 futures resistance levels are 6017, 6131, and 6256: support levels are 5926, 5748, and 5622.

DJIA futures are up 335 points.

Gold futures are at $2609, silver futures are at $29,53, and oil futures are at $70.51.

ARORA REPORT CALL IS FOR A HAWKISH FED CUT AND A HIGHER NEUTRAL RATE

Dec 18, 2024

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

Hawkish Fed Call

Please click here for a chart of Dow Jones Industrial Average ETF (DIA).

Note the following:

• The chart shows DJIA has been down nine days in a row. This is the longest in over 40 years.
• RSI on the chart shows DJIA is oversold.  Oversold markets are susceptible to a bounce.
• There are two reasons DJIA has been down while S&P 500 (SPX), S&P 500 ETF (SPY), and Nasdaq 100 ETF (QQQ) have held up. DJIA is a price weighted index.  S&P 500 is a cap weighted index.
  • UnitedHealth (UNH) is one of the highest priced constituents of DJIA.  UNH stock first went down on massive sympathy from the general public on the murder of UnitedHealth CEO.  UNH stock took another leg down when President-elect Trump bought into the narrative propagated by the pharma industry that the reason for high drug prices is Pharmacy Benefit Managers (PBM).  UnitedHealth owns one of the largest PBMs.
  • DJIA has a lower technology weighting.  In December, technology stocks are the ones that have been running up.
• It is important to look underneath the indexes.  Do not be misled by SPY and QQQ.  The average stock is down 4% in December.  
• The FOMC will announce its decision on interest rates at 2pm ET.  The announcement will be followed by Fed Chair Powell’s press conference at 2:30pm ET.
• As we shared with you in advance, The Arora Report call is for a hawkish rate cut.  For details, please see the Morning Capsule from December 13.
• You may recall that when the Fed cut interest rates in September, everyone was expecting yields on long bonds to go lower.  At that time, The Arora Report made a contrary call that yields on long bonds would go higher.  That call has now proven spot on.  At that time, the 10 year Treasury yield was 3.63%.  The 10 year Treasury yield is 4.42%.  Another good reference point is 20 – 30 year bond ETF TLT.  TLT was trading at $100.23 before the Fed announcement.  TLT is trading at $89.96 as of this writing in the premarket.  As a reminder, bonds move inverse to the yield.
• In The Arora Report analysis, the most important point for prudent investors to watch from today’s Fed announcement is going to be the terminal rate and any indication of the neutral rate.  Adding to The Arora Report’s stellar record of more correct calls related to the Fed than anyone else over the last 17 years is the long-standing Arora call that the neutral rate and the terminal rate will be higher than the Fed and the market expected.  The last Fed projection was a terminal rate of 3.4%.  At that time, the market was exuberant. The market consensus was a terminal rate of 2.78%.  Now, the market has moved closer to The Arora Report call of 3.8% – 4%.  We will be carefully watching the Fed’s projection of the terminal rate today.
• The Fed is not likely to give us a number for the neutral rate.  The neutral rate is the rate at which the monetary policy is neither restrictive nor expansionary.  So far, The Arora Report’s contrary call on the neutral rate has also been spot on.
• It is important for investors to understand the concepts of neutral rate and terminal rate.  The easiest and the best way to understand these important concepts is to listen to the podcasts in Arora Ambassador Club.
• The momo crowd’s pattern is to buy before the Fed announcement on hopium.  True to its pattern, the momo crowd is buying stocks in the early trade.  In contrast, smart money’s pattern is to trim ahead of Fed announcements to control risks when there is uncertainty.  True to its pattern, smart money appears to be trimming by lightly selling in the early trade.
• 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.

Housing

Housing appears to be weakening.  Here is the just released data:

• Housing starts came at 1289K vs. 1347K consensus.
• Building permits came at 1505K vs. 1430K consensus.

U.K.

Data shows inflation in the U.K. is at an eight month high.  This is adding to stagflation concerns.

In The Arora Report analysis, this is important because the U.K. tends to lead the U.S. by several months.  

Japan

The Bank of Japan (BOJ) is about to discuss a potential rate hike.

Magnificent Seven Money Flows

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

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), 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 *** 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 draw of 4.7M barrels vs. a consensus of a draw of 1.85M 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 6133 as of this writing.  S&P 500 futures resistance levels are 6256, 6500, and 6700: support levels are 6131, 6017, and 5926.

DJIA futures are up 76 points.

Gold futures are at $2657, silver futures are at $30.80, and oil futures are at $70.23.

COMPUTERS IN NEW TESLA CARS FAILING BUT TESLA STOCK ROCKETS ON TRUMP’S SUPPORT

Dec 17, 2024

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

Extreme Positive Sentiment

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 TSLA stock has gone parabolic.
• The chart shows the recent Arora buy signal.  There is a 66.8% gain from the Arora buy signal in less than six weeks.
• RSI on the chart shows that TSLA stock is overbought.  Overbought stocks tend to be susceptible to a pullback.
• Yesterday’s TSLA stock was ripping, in part, on rumors that Trump will change the law so that Tesla does not have to report car crashes to regulators.  Regulators use this data to assess the safety of vehicles. To date, Tesla has had to report over 1500 crashes.
• Investors are ignoring the news that the computers in Tesla’s new cars are failing.  TSLA stock should have been down on the news of the new car computers failing.  Instead, TSLA stock ran higher.  This is a prime example of what happens when sentiment is at the extreme positive.
• TSLA stock is also moving higher in part because there is a new constituent of buyers for TSLA stock. These buyers are the ones who hate electric vehicles (EVs), are big Trump supporters, and are now buying TSLA stock because they see Tesla CEO Elon Musk with Trump.
• In The Arora Report analysis, sales of EVs are going to fall.  This is a risk to TSLA stock.  However, bullish Tesla analysts already have a narrative – EVs no longer matter to Tesla because Tesla has Trump’s support to change laws to benefit Tesla.  In The Arora Report analysis, the future of Tesla is about autonomy, robotaxis, and robots; however, EVs are still very important to Tesla – robotaxis and autonomy are built on EVs.
• Astute investors recognize that extreme positive sentiment is a sell signal.  Profit taking by such investors in the early trade is overwhelming buying by the momo crowd.  As we have written before, extreme positive sentiment is not a precise timing signal.
• Prudent investors closely watch retail sales data as the U.S. economy is 70% consumer based.  The data is mixed; consumers are still aggressively buying cars but are pulling back on other purchases.  Here is the latest retail sales data.
  • Headline retail sales came at 0.7% vs. 0.5% consensus.
  • Retail sales ex-auto came at 0.2% vs. 0.4% consensus.
• FOMC is starting its meeting today.  The rate decision will be announced tomorrow at 2pm ET, followed by Powell’s press conference at 2:30pm ET.
• 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 Alphabet (GOOG) and Tesla (TSLA).

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

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

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

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) continues to move higher as the rumor takes hold that Trump will announce the bitcoin reserve on day one.

Markets

Interest rates and bonds are range bound.

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 6132 as of this writing.  S&P 500 futures resistance level is 6256, 6500, and 6700 : support levels are 6017, 5926, and 5748.

DJIA futures are down 172 points.

Gold futures are at $2649, silver futures are at $30.66, and oil futures are at $69.41.

AI PROGRESS FROM MICROSOFT – PHI-4 OUTPERFORMS HUMAN-LIKE REASONER AI MODEL GPT-4o, BITCOIN RUMOR

Dec 16, 2024

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

Small Language Model

Please click here for a chart of Microsoft stock (MSFT).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of MSFT stock is being used to illustrate the point.
• The chart shows MSFT stock has climbed in December so far.
• The chart shows support and resistance zones for MSFT.
• RSI on the chart shows MSFT stock is overbought.  Overbought stocks are susceptible to a pullback.
• We previously shared with you a major milestone in AI progress – human-like reasoning capabilities using chain link thinking in Model 4o from OpenAI.
• ChatGPT-4o is a large language model.
• In further AI progress, Microsoft has introduced Phi-4.  Phi-4 is a small language model that outperforms GPT-4o in certain mathematical reasoning.  Phi-4 is only a fraction of the size of GPT-4o.  It appears that Phi-4 can do better in solving certain math problems compared to its teacher model GPT-4o.  Also of note is that Microsoft trained Phi-4 mostly on synthetic data.
• The foregoing is important for investors as investors need to get ahead of the curve.  In The Arora Report analysis, Phi-4 challenges the present belief that bigger is better.
• In The Arora Report analysis, small language models such as Phi-4 have a very bright future.  Investors who want to stay current on AI developments as it relates to investments may consider staying tuned to the Morning Capsules and listening to the podcasts in Arora Ambassador Club.  There is a fortune to be made in AI between now and 2030.  However, it will not be in a straight line.  At times, it will be treacherous.
• There is excitement in the stock market this morning as it was announced Friday after the close that AI software company Palantir (PLTR) and big bitcoin holder MicroStrategy (MSTR) are being added to the Nasdaq 100.
• We have previously written that one of the things Trump can do to reduce inflation from his policies is to attract foreign investment to the U.S.  In the first sign of success for Trump, Japan’s SoftBank (SFTBY) CEO Masayoshi Son will announce at Mar-a-Largo a $100B investment in the U.S. over the next four years.
• There is also buying in the early trade as the market believes it is a certainty that the Fed will cut interest rates this week in spite of the data not supporting such a rate cut.
• Markets in the U.S. are not being impacted by weakness in Europe and Asia as there was powerful pumping of stocks in the media over the weekend.  Retail investors tend to be influenced by the weekend pump and buy on Monday morning.
• 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.

France

Moody’s has cut France’s credit rating.  French stocks and bonds are falling.

China

Markets all across the globe are being negatively impacted by weak retail sales data in China.

Retail sales in China came at 3.0% year-over-year vs 4.8% consensus.

Concern is building that the Chinese consumer is not spending in spite of stimulus measures by the government.

In The Arora Report analysis, investors should note the sharp contrast between U.S. consumers and Chinese consumers at this time.  U.S. consumers are on a buying binge.  Chinese consumers are holding back and are focused on savings.

Magnificent Seven Money Flows

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

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

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

Over the weekend, bitcoin (BTC.USD) ran over $106,000 on a rumor that Trump will announce the bitcoin reserve on day 1.

Markets

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

The dollar is range bound.

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 6144 as of this writing.  S&P 500 futures resistance level is 6256 : support levels are 6131, 6017, and 5926.

DJIA futures are up 56 points.

Gold futures are at $2679, silver futures are at $31.17, and oil futures are at $70.83.

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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.