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

June 6, 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.’

MOMO AGGRESSIVELY BUYS SEMICONDUCTOR DIP, BIG SETBACK FOR SPACEX, BLOWOUT JOBS REPORT

Jun 5, 2026

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

Blowout Jobs Report

Please click here for a chart of the leveraged semiconductor ETF (SOXL).

Note the following:

The Morning Capsule is about the big picture, not an individual stock. The chart of the leveraged semiconductor ETF SOXL is being used to illustrate the point.
Semiconductor mania is one of the three manias driving the stock market higher. Semiconductor mania has been the main factor driving the stock market higher.
The chart shows a drop in SOXL after Broadcom (AVGO) earnings came well below whisper numbers. Please see yesterday’s Morning Capsule for details.
The chart shows extremely aggressive buying by the momo crowd on the dip in semiconductors. After a sector has run up and a leading company in that sector disappoints, the kind of aggressive buying shown on the chart is unprecedented. The momo crowd just did not care about earnings. To the momo crowd, every dip is a buying opportunity, especially in semiconductors.
The chart shows that extremely aggressive momo crowd buying led SOXL to recover most of the losses after AVGO earnings.
Investors in Asia were not swayed by the momo crowd’s extremely aggressive buying in semiconductors.
The chart shows SOXL started dropping after the regular session yesterday, after indications emerged that there would be selling in Taiwan and Korea. The chart shows that as Taiwan and Korea started trading lower, more selling came into SOXL after hours.
Taiwan and South Korea are two markets that have been extremely strong. Taiwan Semiconductor Manufacturing Company (TSM) manufactures the most advanced AI semiconductors in Taiwan. Two big semiconductor memory makers, Samsung Electronics (SSNLF) and SK Hynix (HXSCL), are based in South Korea. The stock market in South Korea fell by 5.4% overnight. The Taiwan stock market fell by 1.33%. Korea ETF EWY is long from $48.60 in ZYX Emerging. It is trading at $191.12 in the premarket as of this writing. This represents a gain of 293%.
There is a big setback for SPCX. S&P has decided not to fast-track the inclusion of SPCX in the S&P 500 after NASDAQ fast-tracked SPCX into the NASDAQ 100. The speculation was that the S&P 500 would do the same. This is a big setback because inclusion in the S&P 500 would have brought in blind money to buy huge quantities of SPCX without considering price or performing any analysis. To make matters worse, Wall Street would have front-run the inclusion by buying SPCX in advance, causing the SPCX price to go even higher. Then Wall Street would have sold SPCX at super-elevated prices to index funds. Passive fund managers do not care about the price they pay because their mandate is to buy whatever is included in the index, and, of course, it is not their money. The money in the funds comes from other investors, but those investors do not care about the price they pay because they drank the Kool-Aid that they must invest blindly because they do not have the intellect to learn the stock market and make good judgments that lead to better returns. For those interested in next level knowledge of the impact on SpaceX, there is a podcast in the Arora Ambassador Club.
The Jobs Report is a blowout. Here are the details:
- Headlines nonfarm payrolls came at 178K vs 196K consensus.
- Private nonfarm payrolls came at 120K vs 89K consensus.
- Average hourly came at 0.3% vs 0.3% consensus.
- Unemployment came at 4.3% vs 4.3% consensus.

In The Arora Report analysis after this Jobs Report, now the probability of a rate cut in Kevin Warsh’s first FOMC meeting is only 10%. The speculation has been that Kevin Warsh would manage to get a rate cut to appease President Trump, even though the data does not support it.

In The Arora Report analysis, the probability of a rate hike this year is 60%.

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 Tesla (TSLA), Apple (AAPL), and Microsoft (MSFT).

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

In the early trade, money flows are negative in S&P 500 ETF (SPY) and in 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 *** stocks in the early trade.

Note for new members: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling. Over a long period of time, investors come out ahead by adopting smart money’s ways. The exception is in a raging bull market – for very short term trades, consider following the momo crowd and not smart money. 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. This is reflected in gold ETF (GLD), silver ETF (SLV), gold miner ETF (GDX), and silver miner ETF (SIL). Smart money is *** gold in the early trade.

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

Oil

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

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

Interest rates are ticking up, and bonds are 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 7554 as of this writing. S&P 500 futures resistance levels are: support levels are 7700, 7900, and 8000: support levels are 7318, 7194, and 7032.

DJIA futures are up 67 points.

Gold futures are at $4471, silver futures are at $72.67, and oil futures are at $92.68.

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.

SEMI MANIA’S BROADCOM PROBLEM, WORLD’S SMARTEST BANKER TO PITCH SPACEX, JAPAN RISK TO AI TRADE

Jun 4, 2026

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

Semi Mania

Please click here for a chart of Broadcom stock (AVGO).

Note the following:

The Morning Capsule is about the big picture, not an individual stock. The chart of AVGO stock is being used to illustrate the point. Broadcom is a semiconductor company that has diversified into software. AVGO stock has run up primarily because of its custom AI chip offerings.
The chart shows AVGO stock ran up going into earnings. The buying was mostly from the momo crowd. Momo gurus were predicting blowout earnings from Broadcom and the stock going to the moon after earnings.
As a member of The Arora Report, you have been ahead of the curve. We previously shared with you that earnings estimates are very high and there is a fair probability of disappointments.
The chart shows a big drop in AVGO stock after earnings.
This morning, the momo crowd is aggressively buying AVGO stock after the big drop. Prudent investors should carefully watch to see if AVGO stock breaks below zone 1 (support), shown on the chart, or rebounds on momo crowd buying.
In the early trade, most semiconductor stocks have opened significantly lower. However, the momo crowd is aggressively buying the dip. As a reference, leveraged semiconductor ETF SOXL closed yesterday at $280.54. This morning, it has traded as low as $240.11. Prudent investors should carefully watch how SOXL behaves.
Here are key pieces of data about Broadcom earnings, so you are can develop a good understanding of what is going on:
- Revenue rose by 48% to $22.2B vs. $22.1B consensus. Whisper numbers were north of $24B.
- AI semiconductor revenue came at $10.8B vs. $10.7B consensus. Whisper numbers were north of $13B.
- The company is projecting AI semiconductor revenue of $16B for fiscal third quarter vs. $17.2B consensus. Whisper numbers were north of $20B.
- EBITDA guidance came at 68.0% vs. 69.1% consensus.
Prudent investors need to remember stocks move based on the difference between real reported numbers and whisper numbers. Whisper numbers are the numbers analysts privately share with their best clients. These numbers are often different from the numbers the same analysts publish for public consumption. Consensus numbers are the average of the numbers published for public consumption.
In an unusual move, the world’s smartest banker Jamie Dimon is pitching in a live discussion the SpaceX IPO to 2500 high net worth clients of JPMorgan (JPM). The event is being telecast to 90 JPMorgan locations. Not only is such a pitch by the CEO of the largest bank unusual, it also signals reconciliation between Elon Musk and Dimon after years of disputes.
Initial jobless claims came at 225K vs. 216K consensus. This is not of concern.
The official jobs report will be released tomorrow at 8:30am ET.
There is a dichotomy this morning in the stock market. DJIA is going up, but Nasdaq is down. The reason DJIA is going up is because oil and yields are falling. The reason Nasdaq is going down is Broadcom earnings.
Oil and yields are falling due to the U.S. saying that Israel and Lebanon have reaffirmed the ceasefire. If you are keeping track, the ceasefire is not new news; it is just reaffirmation. It is important to note that despite this announcement, fighting continues in southern Lebanon. There is also optimism on President Trump saying there is good progress in talks with Iran. Prudent investors should note that Iran is saying there is no progress.
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.

Risk To AI Trade From Japan

In The Arora Report analysis, the bank of Japan is likely to raise interest rates this month. This is important due to the carry trade. In the carry trade, funds have borrowed hundreds of billions of dollars in Japan and invested in the U.S., primarily in the AI trade.

Magnificent Seven Money Flows

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

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

In the early trade, money flows are negative in Meta (META), Nvidia (NVDA), and Tesla (TSLA).

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

Momo Crowd And Smart Money In Stocks

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

Very Very Short-Term Indicator

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 selling. Bitcoin has broken below the important support level of $65,000.

Markets

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

The dollar is weaker.

S&P 500 futures are trading at 7550 as of this writing. S&P 500 futures resistance levels are 7700, 7900, and 8000 : support levels are 7318, 7194, and 7032.

DJIA futures are up 472 points.

Gold futures are at $4537, silver futures are at $74.76, and oil futures are at $92.89.

NVIDIA’S CEO ACCELERATES SEMI MANIA, EXTRAORDINARY SPACEX CONFIDENCE, TARIFFS ARE BACK

Jun 3, 2026

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

Raise Hedges

There is an old saying about closing the barn door after the horses have bolted. Most investors react only after the horses have bolted, but prudent investors proactively start closing the barn door when the horses are still inside the barn. Right now, the horses are perfectly content inside the barn, but the risk of the horses bolting is significantly rising. At the same time, hedges, especially at the index level, are very cheap for those using options. Please read the Morning Capsule from June 1 titled “THREE MANIAS CAN DRIVE STOCKS HIGHER BUT CORRECTION RISK INCREASING – ARORA PROTECTION BAND IS THE ANSWER.”

Short term hedges are being raised by ***. Short to medium term hedges are being raised by ***. There will be a separate post on hedges. Please also see the “Arora Protection Band And What To Do Now” section below.

Semi Mania

Please click here for a chart of leveraged semiconductor ETF (SOXL).

Note the following:

The chart shows the semi mania has accelerated.
RSI on the chart shows SOXL is now overbought.
The trigger for yesterday’s acceleration of the semi mania was a statement by Nvidia’s (NVDA) CEO Jensen Huang about Marvell (MRVL). We previously shared with you:

Nvidia’s (NVDA) CEO Jensen Huang is promoting semiconductor company Marvell (MRVL) by saying Marvell is the next $1T company. Marvell’s current valuation is about $190B.

Huang’s statement caused MRVL stock to move up 32.5% yesterday, its best day ever. As of this writing in the premarket, MRVL stock is up another 11.9%. The reason is that the 32.5% jump in MRVL stock on Huang’s statement made Marvell the largest company outside the S&P 500. This is giving rise to speculation that MRVL will be included in the S&P 500. Wall Street is front running the potential inclusion in S&P 500 and aggressively buying MRVL stock. If MRVL is included in the S&P 500, passive fund managers will buy MRVL stock at a super elevated price from Wall Street banks that are front running by buying MRVL now with the intention of making profits by selling to passive funds at a super elevated price. Passive fund managers do not care about the price they pay because their mandate is to buy whatever is included in the index, and of course, it is not their money. Money in the funds is from other investors, but those investors do not care about the price they pay because they drank the Kool-Aid that they must go blind because they do not have the intellect to learn the stock market and make good judgements that lead to better returns. The myth behind the Kool-Aid is further propagated by statistics showing that many active funds do not beat indexes. As every prudent investor knows, statistics can be manipulated to say whatever the manipulators want to say. Manipulators hide the fact that the real reason many funds underperform indexes is that their investors get too euphoric and buy the funds near the market tops and become too pessimistic near market bottoms and sell. Even when a fund manager knows that it is not wise to buy near the market top, the fund manager ends up buying near the market top because of the flood of money received from investors. Conversely, even when a fund manager knows that it is not smart to sell near the market bottom, the fund manager has no choice but to sell because of massive withdrawals by investors.
As a full disclosure, MRVL is an extremely profitable position in Arora Ambassador Club and a signal was given this morning to take partial profits on MRVL.
In a sign of extraordinary confidence in demand for its stock, SpaceX (SPCX) is talking about pricing the stock at $135 per share. Normally, companies talk about the price only after the roadshow because the roadshow helps them assess the demand. This is bringing in more optimism to the stock market. Note, the stock market is thinking only about today because it is dominated by the momo crowd and the momo crowd does not think ahead. Prudent investors need to think ahead – please read the June 2 Morning Capsule titled “PAY ATTENTION TO GOOGLE GETTING AHEAD OF SPACEX, OPENAI, AND ANTHROPIC IN $400B LIQUIDITY DRAIN.”
Tariffs are back. The U.S. is proposing a new minimum 10% tariff on many trading partners including Canada, Mexico, and the European Union over forced labor concerns.
Iran and the U.S. have again exchanged fire. This is causing oil to go higher and yields to rise, but the stock market is oblivious because it is absorbed in the three manias.
ADP is the largest private payroll processor in the country. ADP uses its data to give a glimpse of the jobs picture ahead of Friday’s official jobs report. ADP employment change came at 122K vs. 110K consensus. This data is stronger than expected. The bond market is paying attention, but the stock market is not.
Yesterday, JOLTS jobs data was stronger than expected. Again, the bond market paid attention but the stock market remained absorbed in the manias.
ISM Non-Manufacturing Index will be released today at 10am ET. Normally, this can be market moving, but expect no impact today because the stock market is too absorbed in its manias.
The Fed’s Beige Book will be released at 2pm ET. Expect the stock market to pay no attention and stay absorbed in its manias.
In important news, Intel (INTC) is saying that there will be an increase in the supply of 3 and 18A nodes to meet increased demand. INTC stock is jumping on the news. You may recall that we previously shared with you that INTC stock had fallen on Nvidia coming up with a new chip to compete with Intel.
Given the semi mania, there is an important earning today after the close from Broadcom (AVGO). Cybersecurity stock Palo Alto Networks (PANW) is falling after good earnings because the stock had run up a lot going into earnings. Another major cybersecurity player, CrowdStrike (CRWD), will report earnings after the close.
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).

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

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

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

Momo Crowd And Smart Money In Stocks

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

Very Very Short-Term Indicator

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

API crude inventories came at a draw of 6.75M barrels vs. a consensus of a draw of 3.6M 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 after the previous big drop.

Markets

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

The dollar is stronger.

S&P 500 futures are trading at 7607 as of this writing. S&P 500 futures resistance levels are 7700, 7900, and 8000 : support levels are 7318, 7194, and 7032.

DJIA futures are down 236 points.

Gold futures are at $4486, silver futures are at $74.37, and oil futures are at $96.23.

PAY ATTENTION TO GOOGLE GETTING AHEAD OF SPACEX, OPENAI, AND ANTHROPIC IN $400B LIQUIDITY DRAIN

Jun 2, 2026

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

Liquidity Drain

Please click here for a chart of Alphabet stock (GOOG).

Note the following:

The Morning Capsule is about the big picture, not an individual stock. The chart of GOOG stock is being used to illustrate the point.
The chart shows Alphabet stock was only slightly down on a massive $80B equity raise.
The chart shows that as of this writing in the premarket, GOOG stock has not even closed the gap from April 30. This indicates that the stock market is so bullish that it does not care about the massive equity raise. Under normal market conditions, the April 30 gap would have been filled.
Google’s $80B equity raise consists of $30B from public offerings, $40B from an at-the-market offering, and selling $10B to Warren Buffett’s Berkshire Hathaway (BRK.B).
Alphabet is saying it is raising equity to fund AI spend. Alphabet is scheduled to spend $180B – $190B in capex in 2026. Capex is expected to significantly increase in 2027.
In The Arora Report analysis, here is what prudent investors need to pay attention to:
- Alphabet’s equity raise is a surprise. In the earnings call in April, the company did not say the need for the equity raise. Instead, Alphabet focused on having raised $85B in debt and strong cash flow.
- Alphabet is going from a stock buyer to a stock seller. Alphabet bought $46B of its own stock in 2025 and $62B in 2024.
- Historically, when a large cash rich company decides to sell a massive amount of stock, it often signals that a short term market top may be near. However, investors should note the difference that this time there is AI and it is not clear if historical precedence will apply.
- Prudent investors should also note that Alphabet chose to get ahead in its massive equity raise, ahead of massive IPOs from SpaceX (SPCX), OpenAI, and Anthropic. Together, along with other IPOs, about $400B of liquidity is being taken out of the stock market. Here is the key questions:
  - How will this liquidity be funded?
  - Will it be funded by investors selling other positions?
  - Will this liquidity test bring the stock market down?
As of this writing, the stock market seems to be oblivious to the liquidity test. This should not be a surprise as the stock market is controlled by the momo crowd. The momo crowd does not think ahead. The big edge members of The Arora Report have is thinking ahead.
President Trump appears to have prevailed on Israel to stop marching towards Beirut, the capital of Lebanon. Israel has been trying to make maximum military gains ahead of a peace deal. This is the reason Iran had stopped messaging with U.S. negotiators. President Trump’s quick action may salvage an Iran deal.
ISM Manufacturing Index came at 54.0 vs. 53.1 consensus. A value above 50 is considered economic expansion.
JOLTS job openings report will be released at 10am ET. Often, JOLTS is market moving, but it is not clear if right now in the middle of triple manias anything that does not inflate the manias matters.
In important news, Hewlett Packard Enterprise (HPE) massively beat earnings whisper numbers due to high demand for AI servers. Also, Nvidia’s (NVDA) CEO Jensen Huang is promoting semiconductor company Marvell (MRVL) by saying Marvell is the next $1T company. Marvell’s current valuation is about $190B.
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.

Europe

Eurozone inflation has risen to 3.2%. In The Arora Report analysis, this increases the probability that ECB will raise rates.

Magnificent Seven Money Flows

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

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

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

In the early trade, money flows are negative in S&P 500 ETF (SPY) and neutral in 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. 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 *** 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 down, and bonds are ticking up.

The dollar is weaker.

S&P 500 futures are trading at 7596 as of this writing. S&P 500 futures resistance levels are 7700, 7900, and 8000 : support levels are 7318, 7194, and 7032.

DJIA futures are down 232 points.

Gold futures are at $4551, silver futures are at $76.75, and oil futures are at $91.17.

THREE MANIAS CAN DRIVE STOCKS HIGHER BUT CORRECTION RISK INCREASING – ARORA PROTECTION BAND IS THE ANSWER

Jun 1, 2026

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

Correction Risk Increasing

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 risk of a correction is rising. The chart shows four support zones for a potential market drop.
- Zone 1 – Likely if macro remains strong. The most likely destination is the lower band of Zone 1.
- Zone 2 – If macro conditions weaken mildly
- Zone 3 – If macro conditions weaken moderately
- Zone 4 – If macro conditions weaken severely
The chart shows the Iran war correction ended precisely at the low band of zone 4 (support). Arora support zones are proprietary and often differ from Wall Street support levels. Long time members already know that Arora support zones have consistently been more accurate than levels given by Wall Street analysts.
Three manias are driving stocks higher. Prudent investors should make a distinction between a mania and a bubble. A mania is primarily driven by investor psychology. A bubble is when valuations become completely disconnected from reality.
At this time, we do not see a broad market bubble. However, we do see three powerful manias:
- Semiconductor mania – Enthusiasm around AI chips and infrastructure
- Space mania – Excitement around commercialization of space and companies such as SpaceX
- Options mania – Aggressive speculation, especially through short dated options
Prudent investors should note that manias can drive the stock market higher than you can imagine.
In addition to manias, there are several bullish factors that could continue to propel stocks upward:
- Markets are likely to gain confidence that rates will not rise and may ultimately move lower.
- Assuming a deal with Iran, oil prices are likely to decline. If oil prices fall further, inflation fears are likely to fade, supporting higher stock prices.
- Earnings growth for 2026 is expected to remain strong.
- AI capex for 2026 is likely to rise approximately 70%, continuing to support earnings and enthusiasm.
Here are the important negative factors:
- The Arora Report’s proprietary sentiment indicator shows sentiment is extremely positive. An unsophisticated proxy for The Arora Report’s proprietary indicator is the put/call ratio, which closed at 0.64 on Friday, the lowest level since 2021. Extremely bullish sentiment is generally a contrary signal; in other words, a warning sign. However, sentiment is not a precise timing indicator. Sentiment can remain euphoric for extended periods. This means markets can still move materially higher before correcting.
- AI related stocks now represent roughly 50% of the S&P 500. Excessive concentration historically increases market fragility.
- There is a fair probability that second quarter earnings may not meet elevated expectations.
- Consumer sentiment remains near historically depressed levels even as markets remain near highs. That divergence deserves attention.
- Historically, markets often experience volatility or weakness ahead of midterm elections.
How should investors respond? The goal is to continue profiting from upside while recognizing that corrections can happen quickly anytime between now and October. The answer is dynamic hedging as represented by the Arora Protection Band. Dynamic hedging is:
- Not all-in and all-out investing
- Not pure buy-and-hold
- Not market timing
Dynamic hedging combines the strengths of multiple approaches, participating in upside while systematically reducing risk when warning signals rise. The Arora Protection Band is an easy actionable tool to implement dynamic hedging. Investors should:
- Continue holding strong long term strategic positions
- Gradually hedge based on changing signals
- Take partial profits when appropriate
- Keep tactical positions protected with close stop losses
- Maintain flexibility
Nvidia (NVDA) is jumping into the PC business in direct competition with Intel (INTC) and Advanced Micro Devices (AMD).
The U.S. and Iran continue to militarily attack, but President Trump is confident that a deal will “work out well.” As of this writing, selling is coming in the stock market on a report from Iran that Iran has stopped messaging U.S. negotiators due to Israel continuing to strike Lebanon.
ISM Manufacturing Index 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 Meta (META), Nvidia (NVDA), and Microsoft (MSFT).

In the early trade, money flows are negative in Amazon (AMZN), Alphabet (GOOG), 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 *** 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. 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 7610 as of this writing. S&P 500 futures resistance levels are 7700, 7900, and 8000 : support levels are 7318, 7194, and 7032.

DJIA futures are up 32 points.

Gold futures are at $4529, silver futures are at $75.76, and oil futures are at $89.88.

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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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