By Nigam 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.’
BIG INVESTORS RUSHING TO HEDGE CREDIT RISK FROM AI SPENDING BINGE – RETAIL INVESTORS OBLIVIOUS
Dec 5, 2025
To gain an edge, this is what you need to know today.
Hedging Credit Risk
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 bounced off the high band of zone 1 (support).
- The chart shows the stock market is now close to the prior high.
- Expect Wall Street to try to push the stock market to the magnet shown on the chart. However, new data and Fed action have the potential to get in the way if they are worse than expectations.
- RSI on the chart shows the stock market is overbought, but it can become even more overbought.
- Big investors are becoming concerned about the borrowing binge to build AI data centers. To protect themselves, these big investors are rushing to hedge the risk with credit derivatives. Big investors are also pulling back from buying AI stocks. Retail investors are oblivious. Retail investors among the momo crowd are very aggressively buying AI stocks.
- Seasonality remains positive and a big driving force.
- Yesterday, the momo crowd extremely aggressively bought space stocks such as ASTS and RKLB, nuclear stocks such as OKLO, SMR, and CCJ, and quantum computing stocks such as RGTI, IONQ, and QBTS.
- Sentiment is very positive and approaching extreme positive.
- Lagging money managers are aggressively chasing the winning stocks in the stock market.
- PCE, the Fed’s favorite inflation gauge, as well as personal income and spending will be released at 10am ET and may be market moving.
- 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.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Alphabet (GOOG) and Microsoft (MSFT).
In the early trade, money flows are neutral in Apple (AAPL), Meta (META), Nvidia (NVDA), and Amazon (AMZN).
In the early trade, money flows are negative in 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 *** (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. 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 *** in oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is range bound.
Markets
Interest rates and bonds are range bound.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
S&P 500 futures are trading at 6866 as of this writing. S&P 500 futures resistance levels are 7000 and 7200 : support levels are 6780, 6500, and 6256.
DJIA futures are down 15 points.
Gold futures are at $4265, silver futures are at $58.74, and oil futures are at $59.56.
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.
INITIAL CLAIMS SHOCKER, SMALL CAPS MOVE ON PROSPECT OF A RATE CUT, 10-20% CORRECTION RISK TO AI TRADE
Dec 4, 2025
To gain an edge, this is what you need to know today.
Shocking Jobless Claims
Please click here for a chart of small cap ETF (IWM).
Note the following:
- The chart shows IWM is close to the top band of zone 1 (resistance).
- RSI on the chart is indicating a high probability of breaking out above zone 1.
- The move up in small caps is being driven by the higher probability of a rate cut as shown by Fed fund futures. If the stock market pays attention to the just released jobless claims data, bulls will be disappointed as IWM may not immediately break out.
- IWM is in the ZYX Allocation Model Portfolio.
- In a shocker, initial jobless claims came at 191K vs. 220K consensus. This is very strong data. Prudent investors should note the contrast between this strong data about jobs and the weak data from ADP yesterday. The difference might be that ADP’s data is only private payrolls, whereas initial jobless claims includes government jobs. Overall, the data does not support a rate cut in December. For this reason, in The Arora Report analysis, the probability of a rate cut in December is 70%, but Fed fund futures are predicting about a 90% probability of a rate cut.
- Initial jobless claims is a leading indicator and carries heavy weight in our adaptive ZYX Asset Allocation Model with inputs in ten categories. In plain English, adaptiveness means that the model changes itself with market conditions. Please click here to see how this is achieved. One of the reasons behind The Arora Report’s unrivaled performance in both bull and bear markets is the adaptiveness of the model. Most models on Wall Street are static. They work for a while and then stop working when market conditions change.
- Yields in Japan rose again. The yield on the 10 year Japanese government bond (JGB) rose to its highest level since 2007.
- The 30 year JGB auction received the strongest demand since 2019. The 30 year yield was 3.44% before the auction but fell to 3.39% after the auction. In The Arora Report analysis, the move in the 30 year JGB was likely driven by short covering.
- Prudent investors need to keep an eye on yields in Japan because of the carry trade. Funds have borrowed about $1T in the long standing carry trade and invested in the US.
- It used to be that in the carry trade, the money was invested in U.S. fixed income. However, over the last couple of years, the money borrowed in Japan has been invested in the AI trade in the U.S. As a reference point, the yield on the 10 year JGB was -0.3% in 2016, and then it rose and subsequently fell to -0.295% in 2019. Now, the yield has risen to 1.92%.
- One of the factors driving yields higher in Japan is Prime Minister Takaichi’s $135B fiscal stimulus program.
- In The Arora Report analysis, if the carry trade blows up, there is a 10% – 20% correction risk to the AI trade.
- Microsoft (MSFT) has pushed back on the report that it is cutting sales quotas for some AI products. Microsoft’s push back helped lift the stock market yesterday.
- Three notable earnings have been from Salesforce (CRM), Snowflake (SNOW), and Kroger (KR). Among notable earnings, Salesforce earnings are inline with whisper numbers, Snowflake earnings are below whisper numbers, and Kroger earnings are below whisper numbers.
- ISM services came at 52.6 vs. 52.4 consensus. A number above 50 is considered expansion.
- Investors are eagerly awaiting the Fed’s preferred inflation gauge PCE that will be released tomorrow morning.
- 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.
China And India
The Chinese currency yuan has reached a 14 month high against the dollar. The momo crowd loves a weak dollar because it drives the stock market higher in the short term. However, as The Arora Report has been sharing with you, in the long term, the hallmark of a strong country is a strong currency. The yuan strengthening against the dollar is proof positive that China has gained the upper hand over the U.S. in trade negotiations.
This is also evident from the deference President Trump is showing to China. As an example, China is the biggest importer of Russian oil, but President Trump has done nothing against China for importing Russian oil. On the other hand, President Trump has imposed 50% tariffs on India for being the second biggest importer of Russian oil. This is a long term strategic mistake for the U.S. India is responding by becoming closer to Russia and China. President Putin is visiting India for a state visit. Putin is likely to push India to buy more Russian oil and Russian arms.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Alphabet (GOOG), Nvidia (NVDA), Microsoft (MSFT), Meta (META), and Tesla (TSLA).
In the early trade, money flows are neutral in Apple (AAPL) and Amazon (AMZN).
In the early trade, money flows in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) were positive before the initial jobless claims data. The money flows have turned negative after the release of the jobless claims data.
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. 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 buying.
Markets
Interest rates are ticking up, and bonds are ticking down.
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 6866 as of this writing. S&P 500 futures resistance levels are 7000 and 7200 : support levels are 6780, 6500, and 6256.
DJIA futures are up 15 points.
Gold futures are at $4221, silver futures are at $57.87, and oil futures are at $59.37.
STOCK BUYING ON HASSETT AS POTENTIAL FED CHAIR, AI DRIVES COPPER DEMAND
Dec 3, 2025
To gain an edge, this is what you need to know today.
Stock Buying
Please click here for a chart of copper index fund (CPER).
Note the following:
- The chart shows copper has been moving higher and is now approaching the top band of zone 1 (resistance).
- There are large money flows into copper as AI drives copper demand.
- Copper ETF CPER as well as metals and mining ETF XME are in the ZYX Allocation Model Portfolio. Major copper producer FCX is in the ZYX Buy Core Model Portfolio. Also in ZYX Buy is buyout target First Quantum Minerals (FQVLF).
- The momo crowd is aggressively buying stocks on President Trump indicating that Kevin Hassett is the potential new Fed chair. In The Arora Report analysis, Hassett is highly qualified, charismatic, and close to President Trump. Hassett will be a great choice, who can potentially pull off the difficult feat of doing President Trump’s bidding while still maintaining some credibility for the Fed.
- ADP data is bringing in selling in the stock market. ADP is the largest private payroll processor in the country. ADP uses its data to provide a glimpse of the official jobs report. The release of the official jobs report is delayed from the government shutdown until December 16. ADP Employment Change came at -32K vs. 20K consensus.
- Bond yields are falling on the weak ADP report.
- Just before this publication, stock futures began to sell off on a report that Microsoft (MSFT) is lowering sales quotas for new AI products.
- PCE, the Fed’s favorite inflation gauge, will be released Friday morning.
- 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.
India
The Indian rupee is hitting a low based on the data going back to 1957. The reason is U.S. tariffs are hurting the currency. Russian President Putin is about to visit India. Investors should carefully watch how President Trump reacts.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Tesla (TSLA).
In the early trade, money flows are neutral in Amazon (AMZN), Nvidia (NVDA), and Apple (AAPL).
In the early trade, money flows are negative in Alphabet (GOOG), Microsoft (MSFT), and Meta (META).
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. 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
API crude inventories came at a draw of 2.48M barrels vs. a prior draw of 1.9M 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
There was aggressive buying in bitcoin (BTC.USD) yesterday and early this morning. However, just before this publication a whale appears to have started selling.
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 6853 as of this writing. S&P 500 futures resistance levels are 7000 and 7200 : support levels are 6780, 6500, and 6256.
DJIA futures are up 79 points.
Gold futures are at $4268, silver futures are at $59.55, and oil futures are at $59.35.
MOMO CROWD BUYING AI STOCKS AND BITCOIN, RED ALERT AT OPENAI
Dec 2, 2025
To gain an edge, this is what you need to know today.
AI Trade
Please click here for a chart of Nasdaq 100 ETF (QQQ).
Note the following:
- The chart shows QQQ is trading above the top band of zone 1 (support).
- RSI on the chart shows the stock market can go either way.
- The momo crowd’s pattern is to buy the slightest dip in tech stocks and in cryptos. This morning is no different. The momo crowd is buying tech stocks and bitcoin.
- The momo crowd has suffered massive losses. The call from momo gurus is to buy more now to make up for the losses. As an example, the momo crowd has been concentrated in bitcoin treasury company MSTR leveraged ETF MSTU, which has fallen from a high of $19.82 to $1.17 as of this writing in the premarket. This represents a loss of 94%.
- OpenAI CEO Sam Altman has declared a code red to improve ChatGPT to better compete with Google’s (GOOG, GOOGL) Gemini 3. We previously shared with you The Arora Report’s analysis that investors should expect several cycles of different LLMs leapfrogging each other.
- In a reversal of fortune, money is flowing back into Nvidia stock (NVDA) and out of GOOG stock.
- Database company MongoDB (MDB) reported earnings better than consensus and whisper numbers, helped by AI workloads. The stock is jumping 23% as of this writing in the premarket. Members of The Arora Report have a gain of 1583% on MDB. MDB is in the ZYX Buy Core Model Portfolio.
- ISM Manufacturing Index came at 48.2 vs. 49 consensus. This is the ninth straight month below 50. A number 50 indicates contraction in manufacturing activity.
- President Trump will make an announcement at 2pm ET. The announcement will be preceded by a cabinet meeting. President Trump’s announcement may move the markets.
- 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
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
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. 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 *** in gold in the early trade. Smart money is *** in the early trade.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is *** 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 aggressive buying.
Markets
Interest rates and bonds are range bound.
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 6850 as of this writing. S&P 500 futures resistance levels are 7000 and 7200 : support levels are 6780, 6500, and 6256.
DJIA futures are up 148 points.
Gold futures are at $4247, silver futures are at $58.38, and oil futures are at $59.03.
SILVER BREAKS OUT IN A SHORT SQUEEZE, RISING YIELDS IN JAPAN HITS STOCKS AND BITCOIN
Dec 1, 2025
To gain an edge, this is what you need to know today.
Rising Yields In Japan
Please click here for a chart of silver ETF (SLV).
Note the following:
- The chart shows silver has broken out.
- In The Arora Report analysis, the breakout is the result of a short squeeze.
- If a short squeeze takes hold, silver can go to $70.
- Quantitative tightening (QT) ending, an interest rate cut, and a dovish Fed are all positive for silver.
- As a member of The Arora Report, you have been ahead of the curve. We have been sharing with you the importance of yields in Japan and the impact on the U.S. markets. In the early trade, both stocks and cryptos are seeing selling due to yields in Japan rising.
- Bank of Japan (BOJ) Governor Ueda is indicating a potential rate increase this month. Japanese government bond yields are responding by rising to the highest levels since the 2008 financial crisis. The two year yield is up 3 bps to 1.02%, the five year yield is up 7 bps to 1.3%, and the ten year yield is up 7 bps to 1.87%. The yen is also strengthening.
- Rising yields in Japan have three implications for the U.S. markets:
- Many funds have been borrowing billions of dollars in Japan and investing in the AI trade in the U.S. If the yields in Japan continue to rise and the yen strengthens, there is potential for the carry trade in theAI trade to unwind.
- There is a long standing very large trade of funds borrowed in Japan being used to buy bonds in the U.S. This trade has the potential to unwind.
- Japanese institutions have been big buyers of U.S. Treasuries. The higher yields at home may not only stop Japanese institutions from buying U.S. Treasuries but also prompt selling of U.S. Treasuries. In such a scenario, there is potential for long term yields in the U.S. to rise even if the Fed cuts interest rates.
- In The Arora Report analysis, the markets in the U.S. are not ready for the following:
- The carry trade unwinding
- Long term yields in the U.S. rising even when the Fed cuts rates
- You may recall the spot on Arora call in September 2024, which was highly contrarian when it was made. At that time, almost everyone was rushing to buy long bonds in anticipation of Fed rate cuts. The Arora Report’s call was that long term rates would rise if the Fed cut interest rates by 50 bps. The Fed cut the Fed funds rate from 5.25% – 5.50% to 4.75% – 5.00%. In response, contrary to the consensus, the ten year yield rose from mid-3% to 4.3%.
- Going into the year end, the stock market will have both positive and negative crosscurrents. Whichever direction the stock market starts moving, Wall Street machines will jump on in that direction, exaggerating the move.
- Here are the positive crosscurrents:
- QT is ending today. QT ending will increase liquidity and help risk assets.
- Underperforming money managers will chase by aggressively buying the best performing stocks.
- In The Arora Report analysis, there is a 70% probability of a Fed rate cut. However, the consensus is about a 90% probability of a rate cut.
- Seasonality is positive.
- Going into December, volatility is coming down.
- Positioning is no longer stretched.
- Here are the potential negative crosscurrents:
- Inflation data is hotter than expected.
- If the Fed cuts rates, the Fed will be cutting rates in a 3% inflation environment at a time when liquidity is already high and the stock market is near its high. This has the potential to raise serious concerns about the Fed’s resolve to fight inflation.
- The Fed does not cut rates.
- The Fed is hawkish about future rate cuts.
- Yields in Japan are rising. If yields in Japan rise further, there is potential for the carry trade to blow up.
- President Trump has decided the next Fed chair. The announcement of a new Fed chair and speeches from the new Fed chair may be a double-edged sword. It has the potential to make the stock market soar. However, it also has the potential to cause the stock market to drop on concerns about the Fed losing independence.
- Cryptos and the stock market have become linked. Many investors who are heavily invested in cryptos are also heavily invested in AI stocks. Often, these investors are using significant leverage. Moves in cryptos will be reflected in the AI trade.
- ISM Manufacturing Index will be released at 10am ET and may be market moving.
- Expect blind money to flow into the stock market today and tomorrow. Blind money is the money that flows into the stock market on the first two days of the month without any analysis irrespective of market conditions.
- The momo crowd is aggressively buying the early morning dip in the stock market caused by rising yields in Japan.
- 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.
AI Trade Shift
Alphabet (GOOG, GOOGL) stock has had a strong move on the release of Gemini 3 and excitement about Google’s tensor processing unit (TPU).
Misconceptions are widespread. In The Arora Report analysis, here is what is likely to happen over the coming years:
- Expect large language models to go through cycles of leapfrogging each other.
- Google using custom TPUs in its own models and in its own environment is very different from Google becoming a dominant TPU vendor of chips sold to other companies running different models.
- At The Arora Report, we have been expressing for the last three years that custom ASICs will give serious competition to Nvidia (NVDA). The market is just now waking up to this fact.
Venezuela
President Trump has said that the air space around Venezuela should be considered closed. If the U.S. attacks Venezuela, expect the stock market to rally.
Taiwan Risk
Prudent investors need to note that 2027 is the 100th anniversary of the founding of the People’s Liberation Army in China. The concern is that to celebrate the 100th anniversary and for domestic political reasons, China may attack Taiwan. Such an attack will be very negative for stock markets across the globe if the U.S. comes to Taiwan’s aid. However, prudent investors should also be aware that speculation is building that in lieu of trade concessions from China, the U.S. may not help Taiwan.
Taiwan is important because chip manufacturing is concentrated in Taiwan. If Taiwan Semiconductor Manufacturing’s (TSM) operations are disrupted, that may be devastating to the AI trade but good for Intel (INTC).
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
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 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. 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 *** in oil in the early trade. Smart money is *** in the early trade.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is seeing selling.
Markets
Interest rates are ticking up, and bonds are ticking down.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
S&P 500 futures are trading at 6815 as of this writing. S&P 500 futures resistance levels are 7000 and 7200 : support levels are 6780, 6500, and 6256.
DJIA futures are down 218 points.
Gold futures are at $4297, silver futures are at $58.22, and oil futures are at $58.99.
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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.

