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

March 14, 2026

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.’

INVESTORS COMPLACENT BUT RED ALERT ON A BASE STORING NUCLEAR WEAPONS SHOWS THE RISK, INFLATION TO GO HIGHER

Mar 13, 2026

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

Inflation Elevated

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 that even though the stock market has pulled back, it is still above zone 1 (support).
RSI on the chart shows the stock market is oversold. Oversold markets tend to bounce.
The chart shows that the March low has undercut the December low. Based on history, this pattern suggests a lower stock market ahead. However, keep in mind that history does not always repeat itself.
Prudent investors should pay attention to reports of a red alert at Incirlik base in Turkey. The base houses U.S. nuclear weapons. Sirens went off at the base, and an explosion occurred near the base. Turkey says it intercepted a ballistic missile. Iranian ballistic missiles were previously fired at Turkey on March 4 and 9. The U.S. is not using Incirlik base in its attacks on Iran. Turkey has said that it does not want to be dragged into the war.
After President Trump previously said that Putin told him Russia was not helping Iran, now President Trump is suggesting that Russia is helping Iran. Previously, there have been many reports of Russia providing Iran intelligence on U.S. military targets.
There are also reports that China is looking into providing missile components and financial assistance to Iran. China buys most of Iran’s oil.
The foregoing shows that the risk of the war expanding is not zero at a time when most investors are very complacent.
The reason investors are complacent is that Wall Street convinced them this would be a short war lasting only a few days and every dip is a buying opportunity. President Trump has reinforced this belief by saying that the war would be a short excursion and would be over soon. How many days is a few days? Today is the 14th day of the war.
PCE is the Fed’s favorite inflation gauge. Inflation came as expected. Here are the details:
- Headline PCE came at 0.3% vs. 0.3% consensus.
- Core PCE came at 0.4% vs. 0.4% consensus.
PCE data shows that inflation is remaining elevated, well above the Fed’s target of 2%. The data is from the period before the war started, and gas prices have risen since. In The Arora Report analysis, due to rising gas prices, inflation will go higher going forward unless the war ends soon. At this time, the stock market is not expecting higher inflation.
Durable orders data is weaker than expected. Here are the details:
- Durable orders came in at 0.0% vs 0.7% consensus.
- Durable orders ex-transportation came at 0.4% vs 0.5% consensus.
The U.S. economy is 70% consumer based. For this reason, prudent investors pay attention to personal income and personal spending. Personal spending came stronger than expected. Here are the details:
- Personal spending came at 0.4% vs. 0.2% consensus.
- Personal income came at 0.4% vs. 0.4% consensus.
GDP data is mixed. Here are the details:
- Q4 GDP Second Estimate came at 0.7% vs. 1.4% consensus.
- Q4 GDP Deflator Second Estimate came at 3.8% vs. 3.7% consensus.
JOLTS job openings will be released at 10am ET.
University of Michigan Consumer Sentiment will be released at 10am ET.
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), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Tesla (TSLA), Apple (AAPL).

In the early trade, money flows are negative in 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.

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 *** but can quickly shift based on news and rumors related to the war. 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, and this is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). 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 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 6713 as of this writing. S&P 500 futures resistance levels are 6780, 7000, and 7200 : support levels are 6500, 6256, and 6131.

DJIA futures are up 262 points.

Gold futures are at $5125, silver futures are at $84.49, and oil futures are at $93.10.

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.

IRAN ESCALATES AND GOADS TRUMP BUT TACO HOPIUM KEEPS INVESTORS BUYING STOCKS

Mar 12, 2026

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

Iran Goads Trump

Please click here for a chart of oil futures (CL_F).

Note the following:

The chart shows the move up in oil when Iran laid out its conditions for ending war.
Why would talk of peace spike the price of oil? The reason is Iran is simply goading President Trump. There is zero probability of President Trump accepting any of Iran’s conditions. Here are Iran’s three conditions from a post from Iran’s president:
- “[Recognition of] Iran’s legitimate rights”
- “Payment of reparations”
- “Firm int’l guarantees against future aggression”
The chart shows when Iran escalated by hitting a ship in Iraqi waters. Iran claims that the ship is U.S. owned. Hitting ships is a change of strategy by Iran.
Iran is further escalating in a number of ways. Based on Iran’s escalation, the stock market should have seen a major sell off. Initially, the stock market sold off, but the lows have been aggressively bought. The reason behind the buying is TACO (Trump Always Chickens Out) hopium.
Iran’s new supreme leader is going to speak for the first time on the war. His tone and what he says will be instructive for investors.
Previously President Trump had offered for the U.S. Navy to escort tankers through the Strait of Hormuz. From our sources, yesterday there were multiple reports that the U.S. Navy was refusing requests to escort. This morning, Energy Secretary Chris Wright is saying the U.S. is not ready to escort tankers through the Strait of Hormuz but could be ready by the end of the month. This indicates that the war may be more drawn out than the stock market currently believes.
Initial jobless claims came at 213K vs. 215K consensus.
On the negative side, more problems are surfacing in private credit. This is important for two reasons:
- Private credit is heavily exposed to SaaS companies.
- Private credit has been extensively used for AI data center build out.
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.

Housing Starts

Housing data indicates that builders were more optimistic before than they are now. Here are the details:

Housing starts came at 1.487M vs. 1.340M consensus.
Building permits came at 1.376M vs. 1.392M consensus.

Magnificent Seven Money Flows

In the early trade, money flows are neutral in Tesla (TSLA).

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

Very Very Short-Term Indicator

The Arora Report’s proprietary very, very short-term early stock market indicator is *** but can quickly shift based on news and rumors about the war. 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, and this is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). 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 6740 as of this writing. S&P 500 futures resistance levels are 6780, 7000, and 7200 : support levels are 6500, 6256, and 6131.

DJIA futures are down 362 points.

Gold futures are at $5187, silver futures are at $87.39, and oil futures are at $93.28.

BE CAUTIOUS – MAJOR FUND LOSSES ON $21 OIL HEAD FAKE ON TANKER FIASCO, IRAN’S ACE IN THE HOLE, INLINE CPI

Mar 11, 2026

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

Mining Strait Of Hormuz

Please click here for a chart of oil futures (CL_F).

Note the following:

The chart shows a $21 oil head fake.
The chart shows about a $12 drop in oil on reports of a tanker successfully crossing the Strait of Hormuz. Later, Energy Secretary Chris Wright confirmed in a post on X that the U.S. Navy had successfully escorted a tanker through the Strait of Hormuz.
Many funds aggressively short sold oil on Wright’s post. Afterall, who is a more credible source than the Energy Secretary of the U.S.?
The chart shows when the post was deleted.
The chart shows about a $9 subsequent rise in oil.
Funds that shorted oil on Wright’s post were forced to cover and suffered major losses.
It turned out that the U.S. Navy had not escorted any tanker through the Strait of Hormuz.
The incident shows that investors need to be very careful at this time with any information, even from normally reliable sources.
Investors also need to be extremely cautious about great trades that many gurus are touting on mainstream media to showcase their success. A careful examination of the trading data shows that many such trades could not have occurred and are fictitious. While the media gets the views and gurus get the business, investors who act on such information become bag holders.
The chart shows another drop in oil when the International Energy Agency (IEA) proposed 400M barrels of oil to be released from reserves. This will be the largest oil release ever.
In The Arora Report analysis, markets are oblivious to an important nuance. Prudent investors should pay attention. 400M barrels is a large number but oil can flow through these reserves only at a certain maximum rate. The flow rate may become a limitation and thus may not fully compensate for the oil that is not flowing through the Strait of Hormuz.
In The Arora Report analysis, the consequence of flow rate limitations may be oil prices staying higher longer than the markets expect at this time.
As a member of The Arora Report, you have been ahead of the curve. We shared with you before the war started that Iran had maximum leverage because it could block the Strait of Hormuz. Now that Iran has refused to end the war, prudent investors should pay attention to Iran’s ace in the hole. Iran’s ace in the hole is mining the Strait of Hormuz. Conventional mines cost only a few thousand dollars, but it costs millions to sweep each one of them.
The U.S. Navy is capable of sweeping these mines. However, there are unconfirmed reports that Iran has more modern mines that are difficult to sweep.
There are reports that Iran has already started laying mines. The U.S. has responded by destroying 16 Iranian mine laying vessels.
In The Arora Report analysis, these mines are easy to lay, and Iran has thousands of vessels and underwater drones that can lay these mines.
The severity of the situation is underscored by President Trump publicly warning Iran with severe consequences if Iran mined the Strait of Hormuz and calling for any mines laid to be removed.
In The Arora Report analysis, Iran’s defiance and ace in the hole are making it difficult for the war to come to a quick end. Herein lies the risk for investors. As an actionable item, consider staying in the upper half of the Arora Protection Band until there is more clarity.
Consumer Price Index (CPI) came inline. Here are the details:
- Headline CPI came at 0.3% vs. 0.3% consensus.
- Core CPI came at 0.2% vs. 0.2% consensus.
In the Arora Report analysis, prudent investors need to keep in mind that the just released CPI data does not reflect the rise in gas prices due to the Iran war. The next CPI reading will likely be higher. The stock market is not prepared for a higher CPI. If the war is prolonged, inflation will become a problem for the stock market.
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 Tesla (TSLA).

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

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

In the early trade, money flows are like a yoyo 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

The Arora Report’s proprietary very, very short-term early stock market indicator is *** and will depend on news and rumors related to the Iran war. 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, and this is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). 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 1.7M barrels vs. a consensus of a build of 1.4M barrels.

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

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

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

The dollar is stronger.

S&P 500 futures are trading at 6766 as of this writing. S&P 500 futures resistance levels are 6780, 7000, and 7200 : support levels are 6500, 6256, and 6131.

DJIA futures are down 218 points.

Gold futures are at $5179, silver futures are at $85.78, and oil futures are at $87.64.

DRAMATIC SWING IN STOCK MARKET INVESTORS’ SENTIMENT – DO NOT IGNORE POTENTIAL MISCALCULATION

Mar 10, 2026

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

Swing In Sentiment

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 when the Arora signal was given to raise cash and hedges one day before the Iran war started. In real life it does not get any more perfect.
The headline of yesterday’s Morning Capsule read, in part, “TRUMP POSITIONED TO DECLARE VICTORY IN IRAN WAR.” At the time the Morning Capsule was written, the stock market was near the low shown on the chart with yesterday’s candle. At that time, selling was very aggressive and sentiment was extremely negative. Also at that time, there was no indication that President Trump would run up the stock market later in the day. The Arora Report was simply analyzing various scenarios, looking ahead – in our analysis, the highest probability scenario was President Trump choosing an off ramp to declare victory; hence the headline.
The chart shows that a signal was given to deploy cash and reduce hedges. Hedges had become very profitable and it was time to book some profits.
Yesterday afternoon, President Trump said the Iran war would end “soon.” President Trump also said the operation was ahead of schedule.
With the benefit of hindsight, yesterday’s Morning Capsule headline has proven to be prescient.
Looking at various scenarios ahead and assigning probabilities to them is part of the daily routine at The Arora Report. It is important for investors to keep in mind that The Arora Report is highly data driven and analytical – the look ahead is based on the data that is available at the time of the analysis. It is important to understand that data changes. As the data changes, so do the scenarios and their probabilities. All of this is done in the framework of the adaptive ZYX Asset Allocation Model with inputs in ten categories.
The chart shows a move up in the stock market yesterday. The move was triggered by a vicious short squeeze and extremely aggressive momo crowd buying. In the early trade this morning, the momo crowd was again buying aggressively. However, as the stock market rallied further, it has been met with selling.
Looking ahead at various scenarios and their probabilities, the following have changed this morning:
- Sentiment has swung from extremely negative yesterday morning to extremely positive this morning.
- The interpretation of such a dramatic swing in sentiment depends on positioning. Investors gain a big edge when they understand positioning. The easiest way to gain this edge is to listen to the podcast titled “Market Mechanics: Positioning.”
  - When the positioning is very negative, a quick swing from extremely negative to extremely positive sentiment is a buy signal.
  - When the positioning is very positive, a dramatic quick swing from extremely negative sentiment to extremely positive sentiment historically caps the upside, and often, the rally is a selling opportunity.
  - Right now, positioning is very positive. For this reason, the dramatic swing in sentiment from extreme negative yesterday morning to extreme positive this morning is a new data point that is negative.
  - Remember, sentiment is only one of the many data points that needs to be considered.
- Iran has responded negatively to President Trump. Iran does not want a ceasefire. In The Arora Report analysis, these are the reasons:
  - The Iranian regime believes that the U.S. and Israel will take advantage of the ceasefire to regroup and attack Iran again in a few months.
  - The Iranian regime has come to the conclusion that the U.S. and Israel will take advantage of the ceasefire to kill the new Iranian leadership.
  - The Iranian regime believes that they can last longer than the U.S.
  - The Iranian regime believes that if the war continues, then the Republican party will lose the midterm elections.
- Protecting refineries of U.S. allies in the Gulf has been a top priority of the U.S. The news is a fire has broken out near a refinery in Abu Dhabi after an Iranian drone strike. This indicates that even after President Trump claimed that Iran does not have much left, the U.S. has not been able to protect the area around the refinery.
The sum total of the foregoing is that the potential of a miscalculation both by the U.S. and Iran is much higher today than it was yesterday. Herein lies the risk. As an actionable item, investors need to understand that there is still a fair probability of the stock market falling to zone 1 (support) shown on the chart. For this reason, most investors should consider, based on personal preference, being in the upper half of the Arora Protection Band.
A positive event ahead is that Nvidia (NVDA) will hold its annual GPU Tech Conference (GTC) next week. GTC has historically been a catalyst for buying in AI stocks.
Key economic data is ahead this week.
- Consumer Price Index (CPI) will be released tomorrow at 8:30am ET.
- Housing starts and initial jobless claims will be released Thursday at 8:30am ET.
- The Fed’s favorite inflation gauge PCE, durable orders, personal incoming and spending, and GDP will be released at 8:30am ET.
- JOLTS job openings and University of Michigan consumer sentiment will be released Friday at 10am ET.
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 Meta (META) and Tesla (TSLA).

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

In the early trade, money flows are negative in Nvidia (NVDA).

In the early trade, money flows are like a yoyo 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 inactive in the early trade.

Very Very Short-Term Indicator

The Arora Report’s proprietary very, very short-term early stock market indicator is *** as it will depend on news and rumors related to the Iran war. 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. This is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). 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. The buying is due to the extremely positive sentiment in the stock market spilling into bitcoin.

Markets

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

The dollar is weaker.

S&P 500 futures are trading at 6782 as of this writing. S&P 500 futures resistance levels are 6856, 6916,and 7000 : support levels are 6736, 6652, and 6584.

DJIA futures are down 158 points.

Gold futures are at $5191, silver futures are at $88.97, and oil futures are at $90.30.

TRUMP POSITIONED TO DECLARE VICTORY IN IRAN WAR, 17TH ANNIVERSARY OF ARORA BACK UP THE TRUCK AND BUY SIGNAL

Mar 9, 2026

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

Oil Leading Stocks

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 markets always have crosscurrents.
The chart shows zone 1 (support). This is the most important point on the chart for investors right now.
The chart shows the stock market is making lower lows. This is a negative pattern.
The chart shows that today, the low in the stock market was significantly lower than where it is trading as of this writing in the premarket. The low was traced as oil prices shot up.
The chart shows that in the early trade so far today, the stock market has aggressively rebounded from the lows as oil pulled back. This is a positive.
RSI on the chart shows that the stock market is oversold. Oversold markets tend to rebound.
The chart shows when The Arora Report gave a signal to raise cash and hedges prior to the recent drop. The U.S. and Israel attacked Iran on February 28. One day earlier, on February 27, based on the adaptive ZYX Asset Allocation Model with inputs in ten categories, The Arora Report raised the Arora Protection Band. The Arora Protection Band is an easy to use, practical embodiment of dynamic hedging, dynamic allocation to cash, and dynamic allocation between strategic positions and tactical positions.
The rebound in the stock market came on the prospect of G-7 countries potentially releasing oil from reserves. The prospect of the release of oil caused the price of oil to quickly pull back after the global benchmark Brent crude traded above $115 earlier. West Texas Intermediate (WTI) crude oil futures have pulled back to around $101 as of this writing after having traded over $119 earlier.
As a member of The Arora Report, you already know the importance of positioning. Traders have been heavily positioned on the short side, especially in WTI, for the following reasons:
- Traders believed the war would be short lived.
- Traders believed the U.S. and Israel would beat Iran into submission quickly.
- Traders believed that the U.S. Navy and insurance to be provided by the U.S. would keep oil flowing through the Strait of Hormuz.
- Traders believed Saudi Arabia and Gulf nations would continue oil production more or less as normal.
As a member of The Arora Report, you have been ahead of the curve. We cautioned you from the beginning that the prevailing wisdom on Wall Street of the Iran war being very short lived and no change in oil supply might be wrong. We also shared with you in detail as to why oil might stop flowing through the Strait of Hormuz – that call has now proven spot on.
Overnight, a massive short squeeze occurred in oil for the following reasons:
- Instead of agreeing to President Trump’s demand for Iran to unconditionally surrender, Iran became even more defiant.
- Iran elected Khamenei’s son as the new supreme leader instead of a centrist as the U.S. had demanded. The U.S. had clearly said electing Khamenei’s son was not acceptable.
- Israel hit oil storage tanks in Iran. There are unconfirmed reports that this is not what the U.S. wanted. This has given Iran license to hit oil infrastructure.
- Gulf nations started reducing oil production as storage filled. Expectations rose that Saudi Arabia would follow. As of this writing, Saudi Arabia has also slowed oil production.
In The Arora Report analysis, President Trump is perfectly positioned to declare victory for the following reasons:
- Significant damage has already been inflicted on Iran.
- President Trump has already achieved many of his objectives.
- President Trump is very sensitive to gas prices.
- President Trump is also very sensitive to the stock market.
- President Trump has an eye on the midterm elections.
As always, investors need to remain data dependent. Having said that, as a heads up, here is the tentative plan under different scenarios:
- If the stock market reaches the support zone shown on the chart and President Trump starts showing signs of declaring victory, based on the adaptive ZYX Asset Allocation Model with inputs in ten categories, there is likely to be a buy signal.
- If President Trump shows no signs of declaring victory and the stock market breaks below the support zone shown on the chart, the Arora Protection Band is likely to be raised.
Today is the 17th anniversary of the start of a long uptrend after the Great Financial Crisis. The long uptrend has been punctuated by short bear markets. During the Great Financial Crisis, the S&P 500 fell by about 50%.
The stock market bottomed on March 9, 2009, with the S&P 500 at 666. Since then, the S&P 500 has risen more than 10-fold.
Of note is that on March 9, 2009, The Arora Report gave a “back up the truck and buy stocks” signal. At that time, it was a bold contrary call because the S&P 500 was cut in half. Almost all analysts were bearish and sentiment was extremely negative. Little did we know, hindsight would show us the stock market bottomed that day and has been on a 17-year uptrend. The Arora Report’s back up the truck and buy stocks signal was based on the adaptive ZYX Asset Allocation Model with inputs in ten categories.
Investors do well when they get ahead of the curve. Looking ahead, due to the long uptrend over the last 17 years, there is now more risk in the market than investors generally believe. Here are the reasons for the increased downside risk:
- Investors have grown complacent. This presents a big risk to the market.
- Investors suffer from recency bias. Investors believe the road ahead will be the same as the road behind. The road ahead may turn out to be very different from the road behind.
- Valuations are very high.
- “Buy the dip” mentality is deeply entrenched.
- Passive investing is in vogue. Passive investors are essentially blind money investing in the market irrespective of market conditions. In history, there have been periods when passive investing did not work well.
- The momo crowd is dominant in the stock market. The momo crowd ignores deep analysis and investing discipline and is oblivious to risk. The momo crowd simply believes the market is only going higher and uses only momentum strategies.
All investors should consider a practical approach to protect their portfolios. A practical approach should consist of the following:
- Dynamic hedging
- Dynamic allocation to cash or short term Treasury bills
- Dynamic allocation between strategic long term investments and shorter term tactical trades
- Uncorrelated assets
With the benefit of hindsight, raising the Arora Protection Band one day before the Iran attack seems spot on so far. This puts members of The Arora Report in a position to take advantage of new opportunities and have a lower drawdown compared to those who are fully invested in the stock market.
Investors need to balance the risks to the downside if the war is prolonged with a potential quick move higher if the war ends. Following the Arora Protection Band is a practical, actionable way to accomplish this goal.
Oil stocks in The Arora Report portfolios have done well. The plan is to take partial profits if President Trump starts showing signs of declaring victory. VanEck Oil Services ETF (OIH) is in the ZYX Allocation Model Portfolio. Shell (SHEL), Halliburton (HAL), and Chevron (CVX) are in ZYX Buy.
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 negative in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple (AAPL).

In the early trade, money flows are like a yoyo 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

The Arora Report’s proprietary very, very short-term early stock market indicator is *** as the market will move based on news and rumors. 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. This is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). Smart money is *** in the early trade.

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

Oil

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

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

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

The dollar is stronger.

S&P 500 futures are trading at 6681 as of this writing. S&P 500 futures resistance levels are 6500, 6256, and 6131 : support levels are 7200, 7000, and 6780.

DJIA futures are down 613 points.

Gold futures are at $5117, silver futures are at $84.15, and oil futures are at $100.64.

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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.

BTCUSD, CL_F, CVX, GOLD, HAL, MARKETS, NVDA, OIH, OIL, QQQ, SHEL, SILVER, SPX, SPY

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