WEEKLY STOCK MARKET DIGEST: WHAT PRUDENT INVESTORS NEED TO KNOW NOW

May 31, 2025

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.’

MOMO CROWD DOES NOT LIKE TRUMP WIN, GOOD INFLATION DATA, CHINA CONCERN, FAST GROWTH IN INDIA

May 30, 2025

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

Momo Does Not Like Trump Win

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 stock market is consolidating just above the breakout line.
The chart shows the stock market did not break up to zone 1 (resistance) on the tariff injunction news yesterday.
The momo crowd aggressively bought stocks yesterday in the premarket when indexes were up about 2% on the news that a court had invalidated Trump’s tariffs. The stock market has given up all of those gains, and the momo crowd is now sitting on losses.
Yesterday, we shared with you in the Interim Capsule that the Court of Appeals has temporarily reinstated the tariffs. Of course, as a member of The Arora Report, from the Morning Capsule you already knew in advance that it might happen.
Momo gurus are very unhappy about the Court of Appeals decision. The reason is that momo gurus’ real job is to run up the stock market under the disguise of analysis. President Trump’s win in the Court of Appeals is getting in the way of momo gurus’ attempts to run up the stock market.
In yesterday’s Morning Capsule, we wrote:

Using Section 122 of the Trade Act 1974, President Trump can impose tariffs up to 15% for up to 150 days. Such new tariffs can replace the existing 10% universal tariffs. Section 122 can be implemented quickly without any formalities. President Trump can use section 122 while an appeal is pending.

Today, there is a report that the White House is now considering using Section 122 if the appeals process is not successful. Again, as a member of The Arora Report, you knew this as the likely backup plan from yesterday’s Morning Capsule.
President Trump just said China “has totally violated its agreement.” President Trump’s statement immediately brought in selling in the stock market. President Trump’s statement goes against Wall Street’s consensus that a trade deal with China is not far off. This Wall Street consensus is, in large part, responsible for the run up in the stock market. This Wall Street consensus is also behind the TACO (Trump Always Chickens Out) trade.
PCE is the Fed’s favorite inflation gauge. The just released data is good. Here are the details:
- Headline PCE came at 0.1% vs. 0.1% consensus.
- Core PCE came at 0.1% vs. 0.1% consensus.
The U.S. economy is 70% consumer based. For this reason, prudent investors pay attention to personal income and personal spending. The just released personal income data appears to be an aberration, and investors should ignore it. Here are the details:
- Personal spending came at 0.2% vs. 0.2% consensus.
- Personal income came at 0.8% vs. 0.3% consensus.
University of Michigan Consumer Sentiment will be released at 10am ET and may be market moving.
As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.

Fast Growth In India

GDP in India grew by an annual rate of 7.4% vs. 6.7% consensus in the quarter that ended in March. India is on track to become the third largest economy in the world behind the U.S. and China. As a reference, the U.S. grows at about 2% – 3% per year.

Growth brings opportunities. India represents one of the best opportunities for long term investors. India focused fund FFXDF, founded by the Warren Buffett of Canada, is in the ZYX Buy Core Model Portfolio. Three India ETFs EPI, GLIN, and SMIN are in the ZYX Emerging Model Portfolio.

Magnificent Seven Money Flows

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

In the early trade, money flows are negative in Apple (AAPL), Amazon (AMZN), Meta (META), Tesla (TSLA), 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 *** (To see the locked content, please take a 30 day free trial) in 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. Smart money is an important indicator but is only one of hundreds of indicators that go into determining the Arora Protection Band and signals. Please click here and here to understand how signals are generated.

Very Very Short-Term Indicator

The Arora Report’s proprietary 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 selling.

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

DJIA futures are down 117 points.

Gold futures are at $3326, silver futures are at $33.40, and oil futures are at $60.36.

Arora Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror. The proprietary Arora Protection Band from The Arora Report is very popular. The Arora 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.

INVESTORS DOUBLE DOWN ON TACO TRADE AFTER TARIFF INVALIDATION, A TELL FROM NVIDIA, MASS LAYOFFS

May 29, 2025

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

Tariff Invalidation

Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).

Note the following:

The chart shows a big move up in the early trade after the U.S. Court Of International Trade struck down tariffs imposed by President Trump under the 1977 International Emergency Economic Powers Act.
The move up shown on the chart is due to investors doubling down on the TACO (Trump Always Chickens Out) trade.
Almost all of the buying shown on the chart is coming from the momo crowd, not from smart money.
Zone 1 (resistance) shown on the chart is the magnet for traders.
As a member of The Arora Report, you are ahead of the curve. It is time to also get ahead of the TACO trade. In The Arora Report analysis, President Trump has several alternatives. Investors who are counting President Trump out on tariffs and believing that President Trump will now completely back down are making a big mistake. To stay ahead of the curve, here are the key points you need to know:
- An injunction on tariffs is effective immediately, but the court has given the administration 10 days to implement it.
- Expect the administration to appeal to lift the injunction.
- If the appeal is not successful, expect President Trump to take the matter to the Supreme Court. The probability is high that the Supreme Court will rule in President Trump’s favor.
- Using Section 122 of the Trade Act 1974, President Trump can impose tariffs up to 15% for up to 150 days. Such new tariffs can replace the existing 10% universal tariffs. Section 122 can be implemented quickly without any formalities. President Trump can use section 122 while an appeal is pending.
- President Trump can also use Section 338 to impose tariffs up to 50% on grounds that certain countries discriminate against the U.S.
- The court ruling leaves sectoral tariffs such as those on steel and aluminum in place. President Trump can simply use Section 232 to impose sectoral tariffs by expanding the list of sectors to almost every sector.
The reaction to Nvidia (NVDA) earnings is providing an important tell for investors.
- Nvidia reported earnings inline with the whisper numbers. Whisper numbers are the numbers analysts share privately only with their best clients. Whisper numbers are often different from the numbers analysts publish for public consumption. This is how analysts generate business.
- Whisper numbers had moved slightly higher than consensus numbers going into earnings.
- Stocks move based on the difference between whisper numbers and actual reported numbers.
- Since Nvidia reported inline with whisper numbers, based on historical patterns, NVDA stock should not have moved a lot.
- For members of The Arora Report, the reaction to Nvidia earnings provides an important tell to get ahead of the curve. NVDA stock is up 5.38% as of this writing in the premarket, instead of only the 1-2% move that is warranted based on earnings.
  - Buying is coming mostly from the momo crowd and not from smart money. The momo crowd is in the mode of buying everything that has news, good or bad.
  - The momo crowd is aggressively buying because, right now, they are driven by FOMO (Fear Of Missing Out).
- Prudent investors can get ahead of the curve by understanding that the foregoing behavior is a tell of extremely bullish sentiment. Remember that extremely bullish sentiment is a contrary indicator. In plain English, it is a sell signal. It is worth repeating, sentiment is not a precise timing indicator.
Initial jobless claims came at 240K vs. 230K consensus. This is an indication that employment may have begun weakening.
GDP is a lagging indicator, but nonetheless important because the market pays attention to it. The Arora Report focuses on leading indicators in ten categories. Here are the details of the data:
- Q1 GDP Second Estimate came at -0.2% vs. -0.3% consensus.
- Q1 GDP Deflator Second Estimate came at 3.7% vs. 3.7% consensus.
As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.

Mass Layoffs Ahead Due To AI

As a member of The Arora Report, we have previously shared with you that AI would bring mass layoffs. Now, the CEO of Antropic, a major large language model builder is echoing the same.

Here are the key points you need to know:

AI will write almost all software code within a year.
The impact on lower level white collar jobs will be devastating as such jobs will be automated. AI will be doing one half of today’s entry level white collar jobs.
Unemployment could rise to 20%.
A vast majority of people who will be laid off are totally oblivious and have no idea what is about to hit them.

In The Arora Report analysis, the AI impact on employment will have a major impact on the markets. Many investors will lose their shirts, but prudent investors who are ahead of the curve will have opportunities to make a fortune. This underscores the importance of staying ahead of the curve.

Magnificent Seven Money Flows

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

Very Very Short-Term Indicator

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 4.236M barrels vs. a consensus of a build of 1M barrels. This data is bearish.

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.

S&P 500 futures are trading at 5954 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 102 points.

Gold futures are at $3337, silver futures are at $33.64, and oil futures are at $61.92.

MARKET DIRECTION TO BE DRIVEN BY NVIDIA EARNINGS, CONSUMER ROARS BACK WITH RENEWED FAITH IN TRUMP

May 28, 2025

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

Consumer Roars

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

Note the following:

The Morning Capsule is about the big picture, not an individual stock. The chart of NVDA is being used to illustrate the point.
Investors are waiting for the release of King Nvidia earnings today after hours. Nvidia earnings will determine the near term direction of the stock market and the AI trade.
The chart shows NVDA stock has consolidated in the lower half of zone 2.
RSI on the chart shows NVDA stock is neither overbought nor oversold going into earnings.
After earnings, bulls expect NVDA stock to break above zone 2 and move into zone 1 shown on the chart. Bears expect NVDA to pull back to zone 3.
NVDA stock is in the ZYX Buy Core Model Portfolio, long from $12.55. Long time members of the Arora Report have a 986% gain on the core position.
One of the concerns in the stock market has been dropping consumer confidence. The latest reading shows the consumer has roared back with renewed faith in President Trump. Here are the key points:
- Consumer confidence came at 98.0 vs. 87.0 consensus.
- Consumer confidence surged by 12.3 points in the biggest monthly gain in four years.
- A separate measure of consumer expectations for the next six months moved up by the most in 14 years. The consumer is roaring back broadly across income groups and age.
- The trigger behind the consumer roaring back is President Trump agreeing to the greatest deal ever for China with almost nothing in return for the U.S. Consumers are addicted to China flooding the U.S. market with low cost goods. Just like addicts cannot understand the broader implications of their addiction, consumers do not understand that their addiction to Chinese goods is transferring wealth from the U.S. to China and helping China towards its goal of overthrowing the U.S. as the world’s superpower.
- The data shows that consumers, especially Republicans, now have renewed faith in President Trump because he struck a deal with China to keep shelves full of cheap Chinese goods.
In The Arora Report analysis, the rise in consumer confidence is a significant positive for the stock market in the short term, but the trigger behind the rise is a significant negative for the U.S. in the longer term. Prudent investors should note that the reprieve for China is only for 90 days. The consensus on Wall Street is that President Trump will chicken out, and China will maintain its greatest deal ever. Wall Street even has a name for the trade: TACO (Trump Always Chickens Out). In The Arora Report analysis, prudent investors should not be so sure of TACO – there is a fairly high probability that Trump will hold out for a better deal than the provisional deal. If Trump holds out for a better deal, the stock market may experience another dip
FOMC minutes will be released today at 2pm ET and may be market moving.
As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Apple (AAPL), Alphabet (GOOG), Tesla (TSLA), and NVDA.

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

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.

Very Very Short-Term Indicator

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 and bonds are range bound.

The dollar is stronger.

S&P 500 futures are trading at 5940 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 down 4 points.

Gold futures are at $3308, silver futures are at $33.33, and oil futures are at $61.64.

AGGRESSIVE STOCK BUYING ON JAPAN’S BOND TWEAK IGNITING A GLOBAL BOND RALLY, PROGRESS WITH EUROPE

May 27, 2025

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

Global Bond Rally

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 aggressive buying has pushed the stock market back over the breakout line in the early trade this morning.
The chart shows that the stock market is consolidating around the breakout line.
RSI on the chart shows the stock market is not overbought, indicating more room to run.
Zone 1 (resistance) shown on the chart is the magnet for stock market bulls.
Rising Treasury yields have been keeping a lid on the stock market. Treasury yields have been rising due to concerns that President Trump’s “big beautiful bill” will raise the national debt.
This morning, the stock market is receiving unexpected help from Japan.
- There is speculation that Japan will issue fewer super long bonds. Yields on Japanese long bonds are plunging.
  - The yield on the 30 year JGB fell to 2.85%, falling by 18.5 basis points.
Speculation about Japan’s tweak has triggered a global bond rally, including in the U.S.
As the bond rally takes hold, it is bringing very aggressive buying into the stock market.
Adding to the bullishness is President Trump’s decision to back off from 50% tariffs he proposed on Europe until July 9. Europe has agreed to fast-track a trade deal.
For the time being, the global bond rally is overshadowing Nvidia (NVDA) earnings that are ahead.
Durable goods came stronger than expected. Here are the details:
- Durable goods came at -6.3% vs. -8.1% consensus.
- Durable goods ex-transportation came at 0.2% vs. 0.0% consensus.
- This is a very volatile series, and no inference should be drawn from this data.
Consumer confidence will be released at 10am ET and may be market moving.
As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora 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 NVDA, Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).

In the early trade, money flows are positive in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).

Momo Crowd And Smart Money In Stocks

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

Very Very Short-Term Indicator

Gold

Money is coming out of gold as the global bond rally is reducing the need for a safe haven.

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 stronger.

S&P 500 futures are trading at 5898 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 up 479 points.

Gold futures are at $3290, silver futures are at $33.04, and oil futures are at $61.19.

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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.

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