By Nigam Arora & Dr. Natasha Arora
Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights from the prior week gives them an edge over the coming weeks. Here is the day by day rundown from the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers of The Arora Report.
Please scroll down for the section ‘Protection Bands and What To Do Now.’
GOLD BREAKS OUT, DISTURBING IPHONE DECLINE, HIGH DEMAND FOR NVIDIA RTX 50, AMAZON OFFERS DEEPSEEK
Jan 31, 2025
To gain an edge, this is what you need to know today.
Gold Breaks Out
Please click here for a chart of gold ETF (GLD).
Note the following:
- The chart shows gold is breaking out.
- By giving hundreds of millions of dollars to politicians, crypto lobbyists in the U.S. have succeeded at persuading a leading senator and advisors to the president to advocate that the U.S. government sell the gold stored at Fort Knox. Central banks of countries such as China are buying gold. For those who want next level information on gold, there are several podcasts in Arora Ambassador Club.
- The chart shows unprecedentedly accurate calls by The Arora Report on gold.
- As shown on the chart, when gold was in the $600 range, the Arora call was to back up the truck and buy gold.
- As shown on the chart, on the exact day gold topped out in 2011, only hours before the top, The Arora Report call was to sell half of the gold holdings at $1904 with a stop on the remaining at $1757. The chart shows the gold subsequently lost half of its value.
- As shown on the chart in 2016, The Arora Report call was credited with the major drop in gold prices. Business Standard which is like the Wall Street Journal of India wrote, “Arora report creates ripples in bullion market.”
- Gold is in the ZYX Allocation Model Portfolio.
- Arora gold ratings have just been updated. You can access these ratings from the main menu. These ratings are used by individual investors, money managers, hedge funds, bullion dealers, and jewelers all across the globe.
- The immediate trigger for a breakout was what we shared in yesterday’s Morning Capsule. We wrote:
With quantitative tightening, the Bank of Japan (BOJ) has shrunk its balance sheet by $500B. This move is causing the dollar to weaken.
- If the dollar drops, gold can fly.
- President Trump is threatening to impose 25% tariffs on Mexico and Canada tomorrow. ETFs of interest are EWW and EWC.
- If Trump actually imposes the tariffs, it will help gold move higher. On the other hand if Trump backs off, gold’s breakout may fail.
- The drop in iPhone sales is disturbing. iPhone sales fell 11% in China. Overall, iPhone revenues came at $69.1B vs. $71B consensus. Apple’s (AAPL) CEO did exactly what CEOs do when things go wrong – Apple declared that it had the best quarter ever. A combination of Apple’s positive spin, a fear that sales could have been even worse , and extreme positive sentiment in the market is driving AAPL stock about 4% higher in the early trade.
- In addition to AI, gaming is still an important business for Nvidia (NVDA). The demand for new RTX 50 series GPUs is unprecedented. At many outlets, the entire RTX 50 series was sold out in minutes.
- Retail investors are extremely aggressively buying NVDA stock.
- Institutions who have been selling NVDA stock have stopped selling NVDA stock this morning after a report that Nvidia’s CEO Jensen Huang will meet with President Trump today at the White House.
- A new signal on NVDA stock from The Arora Report is ahead.
- The U.S. government is investigating if DeepSeek improperly obtained Nvidia GPUs from Singapore. How does Amazon (AMZN) respond? Amazon is now offering DeepSeek to its customers. Yesterday, we shared with you that Microsoft (MSFT) was starting to offer DeepSeek to its customers. Even employees at the Pentagon appeared to have been downloading DeepSeek in large numbers before the practice was stopped. The foregoing shortsighted behavior illustrates why it is so easy for China to keep on marching towards its goal of replacing the U.S. as the next superpower.
- PCE is the Fed’s favorite inflation gauge. PCE data came inline with expectations. Here are the details:
- Headline PCE came at 0.3% vs. 0.3% consensus.
- Core PCE came at 0.2% vs. 0.2% consensus.
- The U.S. economy is 70% consumer based. For this reason, prudent investors pay attention to personal income and personal spending. The data indicates that U.S. consumers continue to splurge. Here are the details:
- Personal spending came at 0.7% vs. 0.5% consensus.
- Personal income came at 0.4% vs. 0.4% 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in AAPL, AMZN, MSFT, Alphabet (GOOG), and Meta (META)
In the early trade, money flows are negative in NVDA and Tesla (TSLA).
In the early trade, money flows are positive in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
Momo Crowd And Smart Money In Stocks
The momo crowd is *** (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
The momo crowd is *** gold in the early trade. Smart money is *** gold in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is *** oil in the early trade. Smart money is *** 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 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 6121 as of this writing. S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are up 71 points.
Gold futures are at $2851, silver futures are at $32.68, and oil futures are at $73.02.
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.
HUMANOID ROBOTS BIGGER THAN EVS, RETAIL INVESTORS BUY $1B NVIDIA BUT INSTITUTIONS SELL, MICROSOFT OFFERS DEEPSEEK
Jan 30, 2025
To gain an edge, this is what you need to know today.
Humanoid Robot Opportunities Ahead
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 the release of TSLA earnings.
- The chart shows TSLA stock is still above the support zone as of this writing in the premarket, despite terrible earnings.
- RSI on the chart shows that TSLA stock bounced back from oversold conditions.
- The chart shows significant gain in TSLA stock since the last Arora buy signal on November 6.
- Tesla earnings were terrible, significantly below consensus and whisper numbers.
- Tesla missed EBIT by 38%.
- Margin was the lowest in years.
- TSLA stock first fell on terrible earnings, but then it shot up on humanoid robots and robotaxis.
- Tesla CEO Elon Musk says the Optimus humanoid robot is a $10T opportunity. Tesla plans to ramp production of Optimus faster than previous products. In The Arora Report analysis, humanoid robots are a bigger opportunity than electric vehicles (EVs).
- Musk also announced unsupervised full self driving robotaxis are arriving by June 2025. In The Arora Report analysis, the June timeframe is earlier than expected.
- Significant opportunities are ahead in robotaxis and humanoid robots. The Arora Report will publish signals when opportunities for high risk adjusted returns arise.
- Buying in TSLA stock is almost all by retail investors. Institutions are not buying TSLA stock.
- In The Arora Report analysis, Tesla’s moonshots are getting closer to reality than institutions believe.
- In The Arora Report analysis, TSLA stock should be bought by those not in TSLA stock in the context of a properly diversified portfolio when TSLA stock drops in the buy zone. Arora Model Portfolios are examples of properly diversified portfolios. The buy zone is in the ZYX Buy Core Model Portfolio. Those in TSLA stock may consider continuing to hold.
- Retail investors are also rushing headlong into Nvidia (NVDA) stock. So far this week, retail investors have bought more than $1B worth of NVDA stock.
- Prudent investors should note that institutions are taking advantage of retail investor buying and selling NVDA stock on up spikes. Keep in mind, institutions still have massive positions in NVDA. Institutions are simply engaging in the prudent practice of reducing risk in NVDA stock after DeepSeek.
- We previously shared with you that we would be listening to conference calls from Meta (META) and Microsoft (MSFT), especially regarding CapEx for AI.
- Meta is not backing off. Meta reiterated $60B – $65B of CapEx for the year.
- Microsoft is also not backing off. Microsoft is planning to spend $22B during each of the next two quarters.
- SoftBank (SFTBY), the big Japanese conglomerate that is the prime mover behind Stargate is also not backing off. SoftBank is in discussions to invest $25B in OpenAI. If this investment occurs, SoftBank will become the largest investor in OpenAI, displacing Microsoft. Such an investment indicates that SoftBank does not believe DeepSeek is an existential threat to OpenAI.
- To date, Microsoft has been mostly dependent on OpenAI. In a development worth noting, Microsoft is hedging its bets. Even after investigating DeepSeek for improperly using data from OpenAI from Microsoft servers, Microsoft has started offering DeepSeek to its customers.
- Initial jobless claims came at 207K vs. 221K consensus. This data shows the jobs picture is stronger than anticipated.
- GDP data is inline with expectation. Investors should note this is a lagging indicator. We publish it because the market pays attention to GDP data. However, The Arora Report system is focused on leading indicators. Here are the details:
- Q4 GDP-Adv. came at 2.3% vs. 2.3% consensus.
- Q4 GDP Deflator-Adv. came at 2.2% vs. 2.4% consensus.
- Earnings will be released after the close today from Apple (AAPL), Intel (INTC), and Visa (V).
- In the early trade, the U.S. market is seeing buying due to developments in Japan. Please scroll down. DJIA is not representing what is happening in the early trade due to Caterpillar (CAT) earnings coming below consensus and whisper numbers.
- 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
With quantitative tightening, the Bank of Japan (BOJ) has shrunk its balance sheet by $500B. This move is causing the dollar to weaken.
Europe
The European Central Bank (ECB) has cut its key interest rate by 25 basis points. This is inline with expectations.
Magnificent Seven Money Flows
In the early trade, money flows are positive in GOOG, META, and TSLA.
In the early trade, money flows are negative in AAPL, Amazon (AMZN), MSFT, and NVDA.
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 *** 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 along with tech stocks.
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 6083 as of this writing. S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5746.
DJIA futures are down 38 points.
Gold futures are at $2827, silver futures are at $32.27, and oil futures are at $72.54.
DEEPSEEK DEVELOPED USING OPENAI DATA, ALIBABA AI MODEL BETTER THAN DEEPSEEK, ASML SURGES ON AI ORDERS
Jan 29, 2025
To gain an edge, this is what you need to know today.
AI Model Competition
Please click here for a chart of ASML stock (ASML).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of semiconductor manufacturing equipment company ASML stock is being used to illustrate the point.
- The chart shows the gap up in ASML stock on release of earnings. ASML surged as it reported earnings and booking orders double expectations on AI related demand.
- RSI on the chart shows that ASML has bounced back from oversold conditions.
- The chart illustrates a very important point that we have been impressing upon investors regarding AI – a fortune is to be made in AI; it will not be in a straight line, and at times will be treacherous. The chart shows that in the AI frenzy, the stock has traded as high as $1105.46. Even though ASML is reporting record revenues on AI demand and the stock is up $36 as of this writing, the gap up is a mere blip on the chart.
- ASML is important because ASML has a near monopoly on extreme ultraviolet lithography equipment. Without ASML equipment, advanced Nvidia (NVDA) chips could not be produced and there would be no AI. A more diversified semiconductor equipment manufacturer is Applied Materials (AMAT). AMAT is in the ZYX Buy Core Model Portfolio, long from $16. This represents a gain of 1007% for long time members of The Arora Report.
- We have been awaiting an opportunity to add ASML to the portfolio. A signal will be given when the stringent criteria of the ZYX Change Method are met.
- OpenAI’s data may have been used to train DeepSeek without authorization. Microsoft (MSFT) and Open AI are investigating.
- Data from Meta’s AI model also appears to have been used in DeepSeek.
- For those wanting next level information for investors about the impact of DeepSeek, we are starting work on a podcast. The podcast will be in Arora Ambassador Club. The get on the waitlist to join Arora Ambassador Club, please click here to fill out the form.
- Chinese e-commerce giant Alibaba (BABA) has introduced an AI model that is better than both OpenAI’s model and DeepSeek’s model.
- In a boost for Elon Musk, Apple (AAPL) is working with T-Mobile (TMUS) to provide Starlink on iPhones. T-Mobile is also reporting blowout earnings, the best ever to start a new year. TMUS is in the ZYX Buy Core Model Portfolio. TMUS came to the portfolio at an average price of $12.54 when Arora Portfolio company MetroPCS was bought out and the Arora call was to hold TMUS stock. To date, 201 Arora Portfolio companies have been bought out. Long time members of The Arora Report have a 1791% gain on TMUS.
- The FOMC rate announcement will be made at 2pm ET, followed by Powell’s press conference at 2:30pm ET.
- In The Arora Report analysis, the data does not support a rate cut. We will be carefully listening to Powell’s press conference for clues on what the Fed may do in the March 18 – 19 meeting.
- Prudent investors need to know that bond traders are putting on big positions betting that a big bond rally is about to start. If bond traders are right, a bond rally will be positive for stocks. However, keep in mind that in The Arora Report analysis, a big bond rally is not the highest probability scenario.
- Important earnings ahead today include Microsoft, Meta (META), and Tesla (TSLA). We will be carefully listening to the conference calls for clarity on capital expenditure plans after DeepSeek.
- In The Arora Report analysis, today may be a high volume day in the markets, which can bring volatility.
- The data indicates that consumer confidence is beginning to pullback.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band. The protection band is one of the large number of unique edges that are available to members of The Arora Report.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Amazon (AMZN), Alphabet (GOOG), and META.
In the early trade, money flows are negative in AAPL, NVDA, MSFT, and TSLA.
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 *** in 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 2.86M barrels vs. a consensus of a build of 3.7M 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 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.
S&P 500 futures are trading at 6086 as of this writing. S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are down 52 points.
Gold futures are at $2774, silver futures are at $31.15, and oil futures are at $73.25.
WALL STREET COMES TO NVIDIA’S DEFENSE AFTER BIGGEST LOSS EVER, MANY MOMOS WIPED OUT
Jan 28, 2025
To gain an edge, this is what you need to know today.
Largest Market Cap Loss Ever
Please click here for a chart of Nvidia stock (NVDA).
Note the following:
- The chart shows the drop in NVDA stock stopped before it reached the mini support zone.
- Volume shown on the chart is very heavy, indicating conviction in the pullback.
- RSI on the chart shows that NVDA is not oversold, indicating there is more room to the downside.
- Yesterday, NVDA lost $589B in market cap. This is the largest one day loss ever for any company.
- Yesterday illustrates the importance of diversification and proper portfolio construction. At this time, many retail investors are almost exclusively in AI stocks – such investors suffered massive losses yesterday. The Arora Report Model Portfolios are illustrations of how to properly construct portfolios using over 50 different strategies.
- Wall Street is coming to Nvidia’s defense. In The Arora Report analysis, further clarity is needed. Nvidia issued a statement on DeepSeek, but the statement does not provide any clarity probably because Nvidia is in a quiet period prior to earnings.
- Americans are willy-nilly installing DeepSeek without realizing it is opening their entire device to China. DeepSeek is the most popular app in the Apple App Store.
- Before the stock market opened yesterday, The Arora Report shared with you that Wall Street woke up after about a month after the prior version of DeepSeek was made available at Christmas time. We also shared with you our skepticism about the cost of $6M for DeepSeek.
- Upon further analysis, The Arora Report now has high conviction that the stated cost of DeepSeek is highly misleading. This is important because it is the stated low cost figure that panicked Wall Street.
- For the first time in 20 years, three remarkable things happened yesterday when S&P 500 declined 1.5%:
- The number of rising stocks far surpassed the number of declining stocks, 350 vs. 152.
- Value stocks surged.
- S&P 500 Equal Weight ETF (RSP) was little changed.
- In The Arora Report analysis, instead of going into cash, investors exited AI stocks and bought value stocks.
- Chips stocks are rising on a suggestion that Trump will place tariffs on imported chips.
- There is also a report of Trump potentially imposing a universal tariff of at least 2.5%.
- Those in the momo crowd who exclusively buy out of money call options on popular stocks have seen their accounts completely wiped out. In our decades in the markets, we have seen this again and again – many in the momo crowd make a lot of money by recklessly buying options and then go on to lose their entire accounts.
- Those in the momo crowd who still have money are aggressively buying NVDA, AMD, CCJ, OKLO, NNE, SOFI, PLTR, RGTI, QUBT, and WIMI. WIMI announced it will use DeepSeek, catching the attention of the momo crowd.
- In The Arora Report analysis, it is important to understand that irrespective of how cheap it may be, corporate America is not going to make a Chinese model like DeepSeek the backbone of their AI efforts.
- Looking forward, we will be careful listening to earnings calls from Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG), Meta (META), and Tesla (TSLA) to see if they are making changes to their capital expenditure plans after DeepSeek.
- Durable goods came weaker than expected.
- Durable goods came at -2.2% vs. 0.4% consensus.
- Durable goods ex-transportation came at 0.3% vs. 0.5% consensus.
- Consumer confidence will be released at 10am ET and may be market moving.
- The FOMC meeting starts 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), Meta (META), and Nvidia (NVDA).
In the early trade, money flows are neutral in Apple (AAPL), Microsoft (MSFT), and Tesla (TSLA).
In the early trade, money flows are negative in Amazon (AMZN).
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) was first sold yesterday along with tech stocks. The dip under $100K was bought. As of this writing, bitcoin has stabilized over $100K.
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 6053 as of this writing. S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are down 64 points.
Gold futures are at $2752, silver futures are at $30.53, and oil futures are at $73.04.
CHINA APPEARS TO LEAPFROG U.S. IN AI, INVESTORS SELLING NVIDIA AND BUYING CHINESE AI STOCKS
Jan 27, 2025
To gain an edge, this is what you need to know today.
AI Race
Please click here for a chart of Nvidia stock (NVDA).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of NVDA stock is being used to illustrate the point.
- The chart shows NVDA previously reached the low band of the micro resistance zone.
- The chart shows in the early trade, NVDA has fallen below the resistance zone, which was previously a support zone.
- RSI on the chart shows that NVDA is not oversold even with the drop this morning, indicating there is more room to the downside.
- NVDA stock is falling in the early trade because of the publicity this weekend around an open source artificial intelligence large language model out of China called DeepSeek. There are reports that the cost of training DeepSeek was only $6M and used only 2,000 Nvidia chips. This is substantially cheaper compared to the tens of thousands of Nvidia chips and hundreds of millions of dollars U.S. companies have spent to build artificial intelligence large language models like OpenAI’s ChatGPT. While DeepSeek is creating concerns about cheaper competition, it is not clear that the capabilities are the same.
- Prudent investors should note that DeepSeek’s flagship model V3 was released in December. On January 20, a specialized model R1 was released by DeepSeek. The market was totally ignoring DeepSeek until it gained publicity this weekend. Previously, the market was ignoring DeepSeek due to the extreme positive sentiment. During periods of extreme positive sentiment, the stock market latches on to bullish news and ignores bearish news.
- Investors were aggressively selling U.S. AI stocks and buying Chinese AI stocks in the early trade.
- In The Arora Report analysis, prudent investors should be somewhat skeptical of DeepSeek claims. Remember the following:
- DeepSeek is coming out of China.
- DeepSeek seems to be heavily censored by the Chinese government.
- Some are claiming that DeekSeek is connected to the Chinese Communist Party.
- It is possible that DeepSeek may have used more computing power than it seems on the surface.
- We have been sharing with you since 2022 that a fortune is to be made in AI all the way to 2030, but it will not be in a straight line. At times, it will be treacherous. What is happening this morning is an example of the treacherousness. You will need expert guidance. We have also been writing that money is to be made from both the long and short sides. This morning’s selloff illustrates the wisdom of making money from both the long and short sides.
- Trump hopium is beginning to meet reality. Until Friday, investors were focusing only on the positive side of Trump’s agenda and totally ignoring the negative side of Trump’s agenda. Over the weekend, when Columbia refused to let a U.S. military plane reportedly carrying immigrants land, Trump imposed 25% tariffs on Columbian goods. Columbia quickly backed down and agreed to everything Trump wanted. This incident woke up some investors, while most investors are still asleep and unaware of the negative side of Trump’s agenda.
- In The Arora Report analysis, prudent investors should pay attention that privately Trump advisors are urging Trump to impose 25% tariffs on Mexico and Canada as early as this Saturday.
- Earnings ahead this week include Apple (AAPL), Microsoft (MSFT), Tesla (TSLA), Intel (INTC), Meta (META), Exxon (XOM), and Southwest Airlines (LUV).
- The Fed is also meeting this week.
- In the early trade, as the momo crowd panics, institutional money is moving out of stocks and into the safety of Treasuries.
- 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 neutral in Apple (AAPL).
In the early trade, money flows are negative in Amazon (AMZN), Alphabet (GOOG), Nvidia (NVDA), Microsoft (MSFT), 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.
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 being sold along with tech stocks.
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 6005 as of this writing. S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 5926, 5748, and 5622.
DJIA futures are down 323 points.
Gold futures are at $2761, silver futures are at $30.88, and oil futures are at $74.20.
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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.