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

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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.’

 

U.S. POLICY HEADACHE AS JAPAN OUTPACES THE S&P 500 BY 81% – BANK OF JAPAN RATE HIKE SENDS YEN LOWER

Sep 18, 2026

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

Reaction To Japan Rate Hike

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

Note the following:

  • The chart shows Japan ETF EWJ has outperformed S&P 500 by 81%.  Excluding the impact of the currencies, Nikkei 225 has outperformed the S&P by about 152% year-to-date.
  • Overnight, Bank of Japan (BOJ) increased its key interest rate to 1.25%.  This is the highest rate in three decades.
  • Expectations were that if BOJ were to raise its key rate, the yen would strengthen.  However, the yen has fallen on the news.  In The Arora Report analysis, the reason for the perverse reaction is that the vote in favor of a rate hike was 7 to 2.   This indicates division at BOJ.  Such division may make further rate hikes difficult.  In The Arora Report analysis, the risk in Japan is inflation going above 2%.  In such an environment, further rate hikes will be needed.  
  • The move in the yen is creating a policy headache for the U.S.
    • Japan is a large holder of U.S. Treasuries.  To protect the yen, Japan may need to sell U.S. Treasuries so that it has dollars to intervene in the forex market.  Such a selling will increase yields in the U.S.  Yields are already rising in the U.S. creating headaches and leading the Fed to raise interest rates for the first time since July 2023.
    • There is risk to the U.S. stock market from the carry trade, in addition to the risk from rising yields emanating from Japan.  In the carry trade, funds have borrowed hundreds of billions of dollars in Japan to invest in the U.S., primarily in the AI trade.
  • As a full disclosure Japan ETF EWJ that has outperformed the S&P 500 by 81% year-to-date is in ZYX Allocation in the Core Model Portfolio.  There are large unrealized gains on The Arora Report position in EWJ.
  • This is also an important moment for prudent investors to focus on the goal of excellent portfolio construction.  The goal of excellent portfolio construction is to improve risk adjusted returns – seeking more return without simply taking more risk.
    • The S&P 500 may contain more than 500 stocks, but its top 10 holdings now account for roughly 38% of the index, creating unusually high concentration risk.
    • Much of that concentration is tied directly or indirectly to the same dominant theme – AI and the massive capital spending surrounding it.
    • International diversification can broaden the sources of return and reduce dependence on a small group of U.S. mega-cap stocks.
    • Japan is a current example.  The Arora Report’s position in Japan has added geographic, sector and currency diversification while generating 81% more price return year-to-date than the S&P 500.
    • That combination of diversification plus higher return is what sound portfolio construction seeks to achieve.
  • Today is triple witching.  In triple witching, stock index futures, options on indexes, and options on stocks expire on the same day.  Yesterday, the stock market, especially semiconductor stocks, staged a major rally driven by triple witching.  In the early trade today, there is upward pressure from triple witching.
  • In important news, hackers used Anthropic’s Claude to break into OpenAI systems.  Although the stock market has dismissed AI safety issues, AI safety issues continue to be a risk.
  • Leading economic 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

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), and Tesla (TSLA).

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

In the early trade, money flows are neutral in S&P 500 ETF (SPY) and positive 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 *** 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 *** 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 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 7701 as of this writing.  S&P 500 futures resistance levels are 7733, 7795, and 7831 : support levels are 7626, 7541, and 7318.

DJIA futures are down 153 points.

Gold futures are at $4375, silver futures are at $67.17, and oil futures are at $97.08.

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.

See also  SMART MONEY CONCERNED BUT MOMO CROWD LOVES BIGGER BAND-AID FOR U.S. DEBT, JACKSON HOLE TEST FOR WARSH

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.

 

TRIPLE WITCHING, FALLING OIL, AND FED HOPIUM DRIVE BUYING IN THE STOCK MARKET BUT DOWNSIDE RISKS REMAIN

Sep 17, 2026

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

Triple Witching

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 yesterday the stock market fell below the low band of zone 2 (support) before recovering to close at the low band of zone 2.
  • The chart shows that this morning the stock market is jumping and has already reached the upper band of zone 2.  The jump this morning is coming for three reasons:
    • Triple witching is tomorrow.  In triple witching, stock index futures, options on indexes, and options on stocks expire on the same day.  Triple witching appears to be to the upside.
    • President Trump said he has directly spoken to Iranians.  President Trump’s comment is bringing oil lower.  President Trump is expected to meet Gulf leaders in New York on Tuesday.
    • Previously, momo gurus were urging their followers to buy stocks because they claimed to know that Fed Chair Warsh would go for a dovish rate hike.  As usual, momo gurus were wrong.  The rate hike was not dovish.  Yesterday, the stock market reacted negatively.  Momo gurus are on the job with a new narrative to run up the stock market.  The new narrative is that they know for sure that there will not be many rate hikes in the future.
  • Buying is especially strong in AI stocks.  Of note is new data from CoreWeave (CRWV) and Nebius (NBIS) that compute prices are going higher.  In The Arora Report analysis, higher prices may support current valuations.
  • Initial jobless claims came at 196K vs. 209K consensus.  This shows the jobs picture remains well behaved.
  • 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

Housing is becoming weaker as interest rates rise.  Here is the latest data:

  • Housing starts came at 1.275M vs. 1.325M consensus.
  • Building permits came at 1.394M vs. 1.410M consensus.

U.K.

In spite of the Fed and European Central Bank (ECB) raising rates, the Bank of England (BOE) decided to leave its key interest rate unchanged.  However, BOE is signaling that it is open to future rate hikes.

Inflation in the U.K. in August was at 3.1% year-over-year vs. BOE target of 2%.

Eurozone

Inflation in the eurozone came as expected.  Here is the data:

  • CPI came at 0.4% month-over-month vs. 0.4% consensus.
  • Core CPI came at 0.2% month-over-month vs. 0.2% consensus.

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), Meta (META), Tesla (TSLA), and Apple (AAPL).

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

Momo Crowd And Smart Money In Stocks

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

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 *** in the early trade.

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

Oil

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

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

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

The dollar is 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 7717 as of this writing.  S&P 500 futures resistance levels are 7733, 7795, and 7831 : support levels are 7626, 7541, and 7318.

DJIA futures are up 630 points.

Gold futures are at $4380, silver futures are at $65.97, and oil futures are at $99.82.

 

MOMO CROWD BETS ON DOVISH HIKE AHEAD OF FED, STRONG RETAIL SALES SURPRISE

Sep 16, 2026

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

Dovish Hike Hopium

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 the stock market is in zone 1 (support).
  • The chart shows buying in the early trade in stocks this morning.
  • The buying in stocks is mostly from the momo crowd.  The momo crowd’s pattern is to buy ahead of key events, such as the Fed’s rate decision because the momo crowd buys on hopium of the potential rewards and does not take risk into account. In contrast, smart money takes into account both potential risks and rewards, and as such, seldom buys ahead of key events.
  • Momo gurus are doing a great job with the narrative that today’s hike will be a dovish hike.  Momo guru’s job is to run up the stock market under the disguise of analysis.
  • In The Arora Report analysis, a dovish hike means “one and done” or some other way of Fed Chair Warsh communicating that the Fed will not engage in further interest rate hikes.  
    • The first problem is that Fed Chair Warsh has clearly stated that he does not want to give forward guidance, so how is he going to communicate that the rate hike is dovish without forward guidance? 
    • The second issue is that Fed Chair Warsh has come out strongly in favor of controlling inflation.  If Fed Chair Warsh comes out dovish, it will fly in the face of what he has been consistently saying.  Fed Chair Warsh coming out dovish will negatively impact his carefully built image that he is an inflation fighter.  
  • In The Arora Report analysis, one of the most important Wall Street mechanics is positioning.  The stock market is positioned to go higher, irrespective of what the Fed does.  For those who want a deeper understanding of positioning, consider listening to the podcast in Arora Ambassador Club titled “Market Mechanics: Positioning.”  To get on the waitlist to join Arora Ambassador Club, please fill out the form below.
  • Further in The Arora Report analysis, there is potential for violent moves in the stock market if the market reaction after the Fed announcement is not inline with positioning.  
  • The Fed’s rate decision will be released at 2pm ET.
  • Prudent investors closely watch retail sales data as the U.S. economy is 70% consumer based.  Retail sales are strong.  Here is the latest retail sales data:
    • August headline retail sales came at 1.2% vs. 0.9% consensus.
    • August retail sales ex-auto came at 1.4% vs. 0.5% consensus.
  • As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents.  Please scroll down to see the Arora Protection Band.  The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.
See also  WEEKLY STOCK MARKET DIGEST: WHAT PRUDENT INVESTORS NEED TO KNOW NOW

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), Meta (META), Nvidia (NVDA), and Tesla (TSLA).

In the early trade, money flows are neutral in Apple (AAPL), Amazon (AMZN).

In the early trade, money flows are negative in Microsoft (MSFT).

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.  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 build of 7.14M barrels vs. a consensus of a draw of 1.8M barrels.

Oil is pulling back this morning on hopes of some kind of resolution of the Iran War.

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 along with crypto related stocks such as Coinbase (COIN), Strategy (MSTR), and Circle Internet Group (CRCL).  The reason is the Crypto Related Clarity Act failed in the Senate.

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 7678 as of this writing.  S&P 500 futures resistance levels are 7700, 7831, and 7900 : support levels are 7318, 7194, and 7032.

DJIA futures are up 96 points.

Gold futures are at $4350, silver futures are at $65.17, and oil futures are at $103.95.

 

TRUMP SAVES THE STOCK MARKET BUT WILL THE FED FOLLOW, 10 YEAR TREASURY OVER 5%

Sep 15, 2026

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

Market Positioning

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 is a 15 minute chart to illustrate the price action since three AI leaders advocated for an AI slowdown.
  • The chart shows the initial drop on AI slowdown fears.
  • The chart shows that the stock market rallied from the lows.
  • The stock market rally was primarily driven by President Trump.  President Trump acted on both fronts that were driving the stock market lower.  One was AI fears, and the second was rising oil.
    • On the AI front, President Trump rejected calls for slower AI development.  President Trump emphasized that a slowdown could impact the U.S.’s position vs. China.  At the All-In Summit, Nvidia (NVDA) CEO Jensen Huang had President Trump on speaker phone live before the audience.  President Trump said that those advocating for an AI slowdown were engaging in a “sick conspiracy.”
    • On the oil front, President Trump posted, “The failing nation of Iran wants to make a deal, quickly and badly. I will determine whether or not the USA will choose to engage - The concept of which we are open to."
  • As of this writing, the yield on 10 year Treasuries is hovering around 5%.  This is the highest level since 2007.  Here is the key question: Will the 10 year yield back off from here, or will it march toward 5.25%?  In The Arora Report analysis, the stock market is positioned for the yield to back off.  The stock market is not prepared for the yield to rise to 5.25%.  
  • President Trump says the U.S. should have lower interest rates.  The FOMC meeting starts today.  The Fed’s rate decision will be announced tomorrow at 2pm ET.  Fed fund futures are predicting a 92.5% probability of a rate hike.  Here is the key question: Will the FOMC listen to President Trump?  On the surface, the Fed will say it is independent.
  • In The Arora Report analysis, the hard data clearly establishes the need for the Fed to raise interest rates.
  • Further in The Arora Report analysis, an even more important question is how the markets will react to the Fed decision.  There is no consensus. There is a fair probability  that long end yields will come down and stocks will go up if the Fed raises rates as this will indicate that the Fed is being responsible.  On the other hand, if the Fed does not raise rates, this will hurt the Fed’s reputation and will be negative in the long term.  However, the momo crowd may aggressively buy stocks as the momo crowd is addicted to artificially low interest rates.
  • 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 Nvidia (NVDA).

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

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

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 *** 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.

See also  CRITICAL SPEECH FROM FED CHAIR KEVIN WARSH AHEAD – WALL STREET POSITIONED FOR A BULLISH OUTCOME

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 range bound.

Markets

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

The dollar is stronger.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

S&P 500 futures are trading at 7692 as of this writing.  S&P 500 futures resistance levels are 7700, 7831, and 7900 : support levels are 7318, 7194, and 7032.

DJIA futures are down 43 points.

Gold futures are at $4295, silver futures are at $64.25, and oil futures are at $101.56.

 

HERE IS HOW PRUDENT INVESTORS SHOULD THINK ABOUT AI SAFETY AND FEAR MONGERING; KEY SAUDI PIPELINE HIT

Sep 14, 2026

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

AI Safety Warnings

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

Note the following:

  • Semiconductors are important because semiconductors have been the leading sector in the AI trade, and SOXL is the momo crowd’s favorite ETF.
  • The chart shows a major pullback from the June high to the July low.
  • The chart shows the July low occurred at the low band of zone 3 (support).
  • The chart shows a rally from the July low on the collapse of Situational Awareness.  Situational Awareness was a $45B fund that lost 67% in July.
  • The chart shows the rally led SOXL to the bottom band of zone 2 (resistance).
  • The chart shows that the rally failed to extend above the low band of zone 2.  Since then, SOXL pulled back to below the top band of zone 3 in late August.
  • The chart shows that the latest rally was subdued.
  • The chart shows this morning SOXL is seeing selling and has pulled back below the top band of zone 3.
  • The trigger for this morning’s selloff is concurrence between Dario Amodei (CEO of Anthropic), Sam Altman (CEO of OpenAI), and Elon Musk (CEO of SpaceX (SPCX)) that out of safety concerns, the development of AI frontier models should be slowed.
  • In spite of fear mongering, here are the factors that make it difficult to slow down AI:
    • Competition between AI labs
    • Competition from China
    • Momentum for existing AI data center projects
    • Pressure on AI labs to regenerate returns
  • The call for an AI slowdown is being muddied as politicians twist the facts to gain political advantage ahead of the midterm elections.
  • For those who want deeper knowledge of this key subject, an in-depth podcast titled “THE NEXT PHASE OF AI PART 4: HERE IS HOW INVESTORS SHOULD THINK ABOUT THE AI DOOMSDAY CALL” will be published shortly in Arora Ambassador Club.
  • There is panic in the early trade in several AI stocks.  As a member of The Arora Report, as usual, you have been ahead of the curve.  We have been sharing with you the probabilities of as much as a 30% - 50% pullback in some AI stocks.  At the same time, under a different scenario, the stock market can still run up from here after the period of seasonal weakness in September and October.  The Arora Protection Band is already striking a good balance between different high probability scenarios.
  • Oil is rising this morning.  Brent crude has gone over $108 and WTI crude has gone over $104.
    • Iraq based fighters attacked Saudi Arabia’s East-West pipeline, forcing it to shut down.  Saudi Arabia has been using this pipeline to bypass the Strait of Hormuz.  The pipeline carries seven million barrels of oil per day.
    • Houthis have fired missiles on Saudi Arabia.
    • On Friday, oil fell and stocks rallied on the news of a pending meeting between Gulf countries and Iran.  The meeting has been postponed as the parties have failed to reach a consensus.
  • As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents.  Please scroll down to see the Arora Protection Band.  The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.

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 Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), and Meta (META).

In the early trade, money flows are negative in Amazon (AMZN), 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 *** 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 *** oil in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

Interest rates and bonds are range bound.

The dollar is stronger.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

S&P 500 futures are trading at 7673 as of this writing.  S&P 500 futures resistance levels are 7700, 7831, and 7900 : support levels are 7318, 7194, and 7032.

DJIA futures are down 206 points.

Gold futures are at $4277, silver futures are at $63.29, and oil futures are at $104.14.

 

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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.

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