PAY ATTENTION TO PUTIN ON TAIWAN, THE POWER OF DIVERSIFICATION ON DISPLAY

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

Pay Attention To Putin On Taiwan

If you are holding stocks such as Apple (AAPL), Tesla (TSLA), Starbucks (SBUX), Blackrock (BLK), Nike (NKE), and Nvidia (NVDA) or if you are holding ETFs that have a large weighting in these stocks, you need to pay attention.

Before Russia’s invasion of Ukraine, China out of the blue started issuing statements that Ukraine was a part of Russia.  Now, out of the blue Putin is saying Taiwan is a part of China.  Why do you think Putin is making this statement out of the blue?

We have been keeping you informed regarding the developments about Taiwan and China.   Having said that, it is important that you develop a deep understanding of the matter because you have significant money on the line if you are holding the stocks mentioned above or ETFs containing those stocks.  For your convenience, listen to the podcast titled “Prudent Investors: Keep A Close Eye On China And Taiwan.”  If you have not yet listened to the podcast, consider listening to it.  If you do not have access to the podcast, please click here.    

Power Of Diversification On Display

Please click here for a chart of Dow Jones Industrial Average ETF DIA.

Note the following:

• The power of diversification is on full display today.  As of this writing, Dow Jones Industrial Average (DJIA) is up 0.81%, but Nasdaq 100 is down 1.76%.
• The chart shows a strong rally in DJIA started in the pre-market.  The rally started because of good earnings from non-tech stocks.
• Caterpillar (CAT), Honeywell (HON), McDonald’s (MCD), and Merck (MRK), four components of the DJIA, reported good earnings today and are up 8.29%, 3.73%, 3.39%, and 1.99% respectively.
• Tech stocks are down.  Microsoft (MSFT) has fallen another $4.91 today, even after the recent big drop after earnings.
• The Arora Report portfolios are properly constructed with appropriate diversification for these market conditions.
• There will be more changes in Model Portfolios along these lines in the near future.  Due to its importance, here is the important reminder from the Morning Capsule.

Ironically, the portfolios of many investors who are not members of The Arora Report are mostly in technology stocks and cryptos.  There are reports that many such portfolios are down 60% – 70% for the year.  Those who focused on call options on technology stocks have lost 80% – 90% of the value of their portfolios.

• The chart shows when the Treasury auction results were announced.  It tailed badly.  Here are the results:
  • $35B 7-year Treasury note auction
  • High yield: 4.027% (When-Issued: 4.016%)
  • Bid-to-cover: 2.43
  • Indirect bid: 63.2%
  • Direct bid: 22.7%
• Apple (AAPL) and Amazon (AMZN) earnings are to be released after market close.  Depending on the earnings, the market can tank, or it can stage a substantial rally.
• Wall Street is positioned for better than expected earnings from both AAPL and AMZN.  A deeper understanding of positioning can give you an edge.  Consider listening to the podcast titled “Market Mechanics: Positioning.”
• Tomorrow morning PCE will be released at 8:30am ET.  PCE is the Fed’s favorite inflation gauge.  These numbers have the potential to cause a significant market move if they are different than the consensus.
• The VUD indicator is the most sensitive measure of net supply demand in real-time. The orange represents net supply and the green represents net demand.
• The chart shows that the VUD indicator is orange, indicating net supply of stocks.

Money Flows

The momo crowd money flows since the Morning Capsule are 🔒 (To see the locked content, please take a 30 day free trial).

Smart money flows since the Morning Capsule are 🔒.

Short squeeze money flows are 🔒.

A Special Note To New Subscribers

Note the smart money behavior.  Smart money tends to sell into strength on strong up days.

New subscribers should consider adopting smart money’s way of investing and trading.

Sentiment

Sentiment is 🔒. It is 🔒 in tech stocks but 🔒 in other stocks.

Sentiment is a contrary indicator at extremes.  In plain English, this means that when sentiment becomes extremely positive it is time to sell and when sentiment becomes extremely negative it is time to buy.

Close

There appear to be sell on close orders.

There is merit to watching the pattern of market on close orders as they represent the day’s dominant net cumulative activity by many professionals and funds.

Gold

The momo crowd money flows in gold are 🔒 since the Morning Capsule.

Smart money flows are 🔒 in gold since the Morning Capsule.

Oil

The momo crowd money flows in oil are 🔒 since the Morning Capsule.

Smart money flows in oil are 🔒 since the Morning Capsule.

Buy Zones And Buy Now Ratings

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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.