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.’
NVIDIA BACKED DATA CENTER IPO COLLAPSES, OPENAI REVENUE QUESTIONS WHIPSAW AI STOCKS; GOOD TREASURY AUCTION
Oct 9, 2026
To gain an edge, this is what you need to know today.
Headwinds For The AI Trade
Please click here for a chart of Nvidia stock (NVDA).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of NVDA stock is being used to illustrate the point.
- The chart shows the breakout in NVDA stock above zone 1 was not sustained.
- The chart shows NVDA stock has fallen back into zone 1 (resistance).
- RSI on the chart shows NVDA stock can go either way.
- NVDA stock fell deep into zone 1 yesterday for two reasons:
- The $5B IPO of datacenter company Firmus in Australia collapsed. Firmus is backed by Nvidia. The reason the IPO collapsed is investors balked at the valuation.
- There was a report that OpenAI’s run rate was $50B vs. $70B expectation.
- The drop in NVDA stock brought in very aggressive selling in AI stocks yesterday.
- In The Arora Report analysis, prudent investors should note that the foregoing is another sign that in this next phase of AI, the character of the market, especially AI stocks, is changing. Until recently, the market was so excited about AI that the stock market would not have cared about the collapse of an Nvidia backed IPO and OpenAI’s run rate. All of a sudden, the stock market is now caring about such issues. The whipsaw in AI stocks illustrates that there is now higher risk in AI stocks.
- The best way to gain deeper knowledge about the next phase of AI is to listen to the podcast series “The Next Phase Of AI” in Arora Ambassador Club.
- After selling AI stocks yesterday, investors are buying AI stocks this morning. The reason is that OpenAI expects to have a run rate of $70B by the end of 2026.
- Oil has pulled back on President Trump’s statement that he does not plan to attack Iran before the midterm elections. This is also helping to bring buyers to the stock market.
- Also helping the stock market is that the 30 year Treasury auction yesterday went well. Here are the details:
- $22B 30 year Treasury bond
- High yield: 5.618% (When-Issued: 5.617%)
- Bid-to-cover: 2.54
- Indirect bid: 72.3%
- Direct bid: 20.9%
- SpaceX (SPCX) is buying 800 MHz spectrum. This is fueling speculation that SPCX plans to compete with AT&T (T), Verizon (VZ), and T-Mobile (TMUS).
- There is a report that Apple (AAPL) is cutting component orders for the iPhone 18 Pro by 15%. The reason appears to be that customers, especially in Asia, are balking at the higher price and demand is running lower than expected. In The Arora Report analysis, so far the stock market has been assuming that Apple customers are price insensitive. Now, there is the first indication that the stock market might be wrong.
- Delta Air Lines (DAL) is cutting its outlook due to surging fuel costs. Delta owns a refinery and thus, has been shielded from part of fuel price increases. Delta’s announcement is hitting other airline stocks such as American Airlines (AAL), United Airlines (UAL), and Southwest Airlines (LUV).
- University of Michigan Consumer Sentiment will be released at 10am ET and may be market moving.
- As an actionable item, the sum total of the foregoing is in the Arora Protection Band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the Arora Protection Band. The Arora Protection Band is one of the large number of unique edges that are available to members of The Arora Report.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Amazon (AMZN), Alphabet (GOOG), Nvidia (NVDA), Microsoft (MSFT), Meta (META), and Tesla (TSLA).
In the early trade, money flows are negative in 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 *** (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 ***. Today is a Friday. Short squeezes tend to happen on Fridays. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Gold
The momo crowd is *** in gold in the early trade. 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 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 7841 as of this writing. S&P 500 futures resistance levels are 7900 and 8000 : support levels are 7831, 7795, and 7733.
DJIA futures are up 27 points.
Gold futures are at $4205, silver futures are at $60.94, and oil futures are at $90.81.
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.
SAMSUNG PROFIT +783%, TSMC SALES +51%: EARLY INDICATORS OF A MARKET CHARACTER SHIFT, WATCH OIL AND YIELDS
Oct 8, 2026
To gain an edge, this is what you need to know today.
Signs Of Market Character Shift
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows the stock market has pulled back to the bottom of zone 1.
- The chart shows the stock market was at an all time high only two days ago.
- It is important for the stock market to hold the low band of zone 1. If the stock market decisively breaks below zone 1, it would raise the specter that the breakout to a new high two days ago was a false breakout.
- Momo gurus are trying their best this morning to run up the stock market by urging their followers to aggressively buy stocks. For a change, in the early trade, the stock market is not running up.
- There are very bullish reports from Samsung (SSNLF) and TSMC (TSM). Samsung is important because it is one of the three largest memory manufacturers in the world, and memory demand for AI is soaring. TSMC is important because it manufactures the most advanced AI semiconductors for the likes of Nvidia (NVDA) and Advanced Micro Devices (AMD).
- Samsung is projecting a 783% year-over-year rise in Q3 operating profit to a new record of 107.4T won vs. 106.1T won consensus.
- TSMC reported Q3 revenue rise of 51% year-over-year to NT$1.49T.
- The numbers from two semiconductor leaders are extraordinarily positive. Yet, TSM stock fell in Taiwan and Samsung stock fell in Korea.
- Yesterday, in the Morning Capsule we shared with you the expectation that the 10 year Treasury auction would go well. That call turned out to be spot on. The Treasury auction was good. Here are the results:
- $39B 10 year Treasury note
- High yield: 5.300% (When-Issued: 5.317%)
- Bid-to-cover: 2.77
- Indirect bid: 80.3%
- Direct bid: 17.1%
- Prudent investors need to pay attention that in spite of a good Treasury auction, bonds did not rally as expected. Today, the Treasury is conducting a 30 year bond auction. Prudent investors should carefully watch to see how well the auction is received and how the market reacts.
- This morning in the early trade, semiconductors are coming under pressure, and in turn, the AI trade is seeing selling. This morning, the market is ignoring the good data from Samsung and TSMC and focusing instead on yields and oil.
- In The Arora Report analysis, prudent investors should note that the foregoing are early indicators of a market character change. Only a month ago, stocks and bonds would have staged a massive rally on a good Treasury auction and good results from Samsung and TSMC. Now, there is selling.
- This morning, oil is rising for the following reasons:
- There are reports that the U.S. could attack Iran prior to the midterm elections.
- Iran is increasing attacks on tankers.
- Three people were killed in Saudi Arabia due to Houthi attacks.
- Initial jobless claims came at 197K vs. 200K 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 neutral in Apple (AAPL), Meta (META), and Alphabet (GOOG).
In the early trade, money flows are negative in Amazon (AMZN), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA).
In the early trade, money flows are mixed in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).
Momo Crowd And Smart Money In Stocks
The momo crowd is *** 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 selling.
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 7827 as of this writing. S&P 500 futures resistance levels are 7831, 7900, and 8000 : support levels are 7795, 7733, and 7626.
DJIA futures are down 316 points.
Gold futures are at $4152, silver futures are at $59.31, and oil futures are at $92.17.
GLOBAL BOND SELLOFF BLOCKS MOMO CROWD’S UBER BULLISHNESS IN STOCKS, TREASURY AUCTION WILL BE THE TEST
Oct 7, 2026
To gain an edge, this is what you need to know today.
Treasury Auction Will Be The Test
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows the stock market made a new all time high yesterday and closed at an all time closing high.
- The chart shows that after going above the top band of zone 1 (resistance), yesterday the stock market pulled back to close near the top band of zone 1.
- The chart shows this morning the stock market is pulling back deeper into zone 1.
- The chart shows yesterday’s rally was not on heavy volume, indicating lack of conviction broadly among investors. In yesterday’s Morning Capsule, The Arora Report provided you with stats and warned there was hidden weakness below the surface.
- Yesterday’s rally was almost exclusively due to aggressive momo crowd buying of AI stocks.
- After yesterday’s new high, momo gurus were sure that the stock market rally would continue today and were urging their followers to aggressively buy the new high. Prudent investors should note that momo gurus pretend to have a crystal ball and are always sure of what is going to happen next.
- Getting in the way of the momo crowd’s uber bullishness this morning is a global bond selloff.
- U.S. 30 year Treasury yield has risen to 5.719%, the highest level since 2002.
- French government bond yields have risen about 0.16% this morning, a rather sharp move. The yield on 10 year French government bonds has risen to 4.91%.
- In the U.K., the 10 year yield has risen by 0.11% to 5.48%.
- The Reserve Bank of India raised its rates by 25 basis points to 5.5% to contain inflation.
- Markets always have crosscurrents. The latest comments from Bank of Japan (BOJ) Governor Ueda are less hawkish than expected. Japan is very important because of the carry trade and its impact on the U.S. markets.
- Prudent investors should pay attention to today’s $39B 10 year Treasury auction and the stock market’s reaction. Expectations are that the auction will be well received. If expectations are met and the auction is good, yields could fall and the stock market could see buying. On the flip side, if there is a surprise and the auction is weak, it could cause the global bond selloff to continue and, in turn, become a headwind for the stock market. For next level information on interpreting Treasury auction results, listen to the podcast titled “TREASURY AUCTION DATA: IGNORE THE MOST POPULAR” in Arora Ambassador Club.
- FOMC minutes will be released at 2pm ET. In The Arora Report analysis, yields have risen much higher than expectations after the last Fed meeting. FOMC minutes will be insightful, especially if it turns out that the Fed has been blindsided.
- Elon Musk plans for SpaceX (SPCX) to buy $40B worth of Nvidia (NVDA) chips. How does Musk plan to pay for the chips? Of course, mostly by borrowing. This illustrates the heavy borrowing that is going on to build AI infrastructure on top of heavy borrowing by governments across the globe.
- Intel (INTC) stock fell on rumors that Taiwan Semiconductor Manufacturer (TSM) and Musk were discussing a collaboration for Terafab. Currently, Intel is working with Terafab. This morning, INTC stock is stabilizing.
- Yesterday, we shared with you the news from Advanced Micro Devices (AMD) and Constellation Energy (CEG). AMD and CEG were big gainers yesterday. These two stocks ignited a rally in AI stocks yesterday. In the early trade today, stocks that saw major gains yesterday such as AMD and CEG are pulling back.
- 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).
In the early trade, money flows are negative in Amazon (AMZN), Alphabet (GOOG), Nvidia (NVDA), Microsoft (MSFT), Meta (META), 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.
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 draw of 2.090M barrels vs. previous build of 1.019M 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 seeing selling.
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 7842 as of this writing. S&P 500 futures resistance levels are 7900 and 8000 : support levels are 7831, 7795, and 7733.
DJIA futures are down 415 points.
Gold futures are at $4120, silver futures are at $60.07, and oil futures are at $90.17.
S&P EYES RECORD HIGH AS TECH STOCKS RALLY ON FALLING YIELDS AND OIL, YET HIDDEN WEAKNESS LURKS BELOW
Oct 6, 2026
To gain an edge, this is what you need to know today.
Hidden Weakness
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows the stock market is nearing a record high.
- The chart shows a sustained new high would push the stock market above zone 1 (resistance).
- RSI on the chart shows the stock market is neither overbought nor oversold. The RSI pattern indicates there is room for the market run.
- In The Arora Report analysis, in the middle of all of the bullishness, prudent investors should not ignore the concentration risk. Roughly 40% of S&P 500 is concentrated in the top 10 stocks. Historically, concentration does not end well. The prevailing wisdom is that this time is different. Investors said the same thing in 1973 and 2000 before significant market drops. In the 1973 – 1974 bear market, S&P 500 fell 48.2%. In the 2000 – 2002 dot com crash, S&P 500 fell 49.2% and Nasdaq Composite fell about 78%.
- Further in The Arora Report analysis, prudent investors should also not ignore the hidden weakness below the surface.
- S&P 500 is up 13.6% year to date. However, the top 10 stocks and semiconductors are driving much of the gain. When the top 10 stocks and semiconductors are excluded, the rest of S&P 500 has gained only 5.2%.
- About 38% of S&P 500 stocks are down more than 20% from their 52 week highs. About 50% of Russell 3000 stocks are in a bear market.
- Four additional factors are adding to the bullishness in the stock market this morning:
- Oil is pulling back. This is primarily for two reasons:
- There are reports that more tankers are traveling through the Strait of Hormuz with their lights and radios off.
- The E.U. is releasing 100M barrels of diesel and oil.
- Yields are pulling back. Yields are pulling back due to oil pulling back.
- Advanced Micro Devices (AMD) is planning to increase chip supply in 2027 to meet growing demand.
- Google (GOOG, GOOGL) and Constellation Energy (CEG) have announced a plan to bring 890 MW of nuclear power to the grid. Constellation Energy is the largest operator of nuclear plants in the U.S.
- Oil is pulling back. This is primarily for two reasons:
- 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), Meta (META), and Tesla (TSLA).
In the early trade, money flows are neutral in 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 7859 as of this writing. S&P 500 futures resistance levels are 7900 and 8000 : support levels are 7831, 7795, and 7733.
DJIA futures are up 223 points.
Gold futures are at $4199, silver futures are at $61.67, and oil futures are at $87.07.
STOCKS IN BRAZIL SURGE; DOLLAR RISES ON FRANCE CONCERNS; EARNINGS SEASON AHEAD
Oct 5, 2026
To gain an edge, this is what you need to know today.
Europe Debt Concerns
Please click here for a chart of Brazil ETF (EWZ).
Note the following:
- The chart shows EWZ leaped above zone 1 on election results.
- RSI on the chart shows EWZ is overbought. An overbought ETF is susceptible to a pullback.
- Brazil matters to U.S. investors because it is Latin America’s largest economy and a major supplier of oil, iron ore, soybeans, and critical minerals. Its economic policies are connected to global commodity prices, U.S. inflation, and corporate profit margins.
- Brazilian stocks are surging as investors price in a greater chance of spending cuts, privatizations, and lower taxes following Flávio Bolsonaro’s stronger than expected election performance. Bolsonaro, the candidate of the right wing Liberal Party, received approximately 47% of the vote against President Lula’s 45%, setting up an October 25 runoff with the presidency still undecided.
- Flávio Bolsonaro’s father Jair Bolsonaro was previously president of Brazil and very close to President Trump. Jair Bolsonaro is now in jail.
- In The Arora Report analysis, if Bolsonaro wins the runoff election, Brazil will likely again be closer to the U.S. If Bolsonaro wins, it will be good for U.S. strategic interests and a negative for China.
- Under Lula, Brazil has deepened ties with China, its largest trading partner, and disagreements with the U.S. over trade and security have widened. Brazil also belongs to BRICS, the group that includes Russia, India, and China. BRICS promote greater use of local currencies in trade to reduce dependence on the U.S. dollar.
- Brazil ETF EWZ is in ZYX Emerging Model Portfolio. The Arora Report has continuously followed Brazil for 19 years.
- Brazil has enormous potential but has repeatedly undermined it through poor economic management. In The Arora Report analysis, if Brazil gets its policies right, Brazilian stocks and Brazil ETF EWZ can go much higher.
- Persistent budget deficits have contributed to high borrowing costs, while political interference in companies such as Petrobras (PBR) has damaged investor confidence under governments of both the left and the right.
- Credible spending discipline and predictable business policies could create room for lower interest rates and stronger corporate earnings.
- Further in The Arora Report analysis, EWZ can benefit from rising earnings and higher valuations, with a stronger Brazilian real potentially adding to returns in dollars, provided Brazil follows through with lasting reforms.
- Concerns are mounting for France’s debt. Earlier today, yields on French 10 year bonds were 146 bps above German 10 year bonds. This is the highest yield difference since the 2011 Europe debt crisis. The euro is slumping. The euro is the largest component of the dollar index. As a result, the dollar is rising. Prudent investors should keep a careful eye on French debt as it has the potential to quickly mushroom and impact markets in the U.S.
- There is also an unconfirmed report of plague spreading in Russia. It is nothing to be concerned about at this time, but it is worth keeping an eye on. You may recall that The Arora Report was one of the first, if not the first, in 2020 to warn that the stock market would fall because of COVID.
- Iran is saying that it will close the Strait of Hormuz until the U.S. meets its conditions. Iran also appears to have increased the tax on ships. So far in the early trade, both the oil and stock markets are ignoring Iran developments.
- ISM Non-Manufacturing Index will be released at 10am ET and may be market moving.
- FOMC minutes will be released on Wednesday.
- Earnings season starts this week with Delta Air Lines (DAL) reporting on Friday and more reporting next week. The stock market is expecting very strong earnings. In The Arora Report analysis, the probability is high that earnings will be strong. Having said that, there is significant downside to the stock market if earnings do not measure up.
- 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) and Microsoft (MSFT).
In the early trade, money flows are neutral in Amazon (AMZN).
In the early trade, money flows are negative in Apple (AAPL), Alphabet (GOOG), Meta (META), 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.
Note for new members: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling. Over a long period of time, investors come out ahead by adopting smart money’s ways. The exception is in a raging bull market – for very short term trades, consider following the momo crowd and not smart money. Smart money is an important indicator but is only one of hundreds of indicators that go into determining the Arora Protection Band and signals. Please click here and here to understand how signals are generated.
Very Very Short-Term Indicator
The Arora Report’s proprietary very, very short-term early stock market indicator is ***. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Gold
The momo crowd is *** in gold in the early trade. 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 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 7772 as of this writing. S&P 500 futures resistance levels are 7795, 7831, and 7900 : support levels are 7733, 7626, and 7541.
DJIA futures are down 48 points.
Gold futures are at $4180, silver futures are at $61.90, and oil futures are at $89.33.
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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.

