By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Extraordinary Move In Treasuries
Please click here for a chart of 20+ year Treasury bond ETF (TLT).
Note the following:
- The chart shows that TLT has fallen below the support/resistance zone. This prior support zone has now become a resistance zone.
- The chart shows that after a breakdown below the zone, Treasuries have continued to fall.
- The chart shows a downward sloping trendline and a significant move lower away from the trendline.
- The chart shows that the down move is on heavy volume. This indicates conviction.
- Historically, at a time of geopolitical tension, money rushes into U.S. Treasuries, and U.S. Treasuries rocket up. Based on history, on Iran attacking Israel, U.S. Treasuries should have moved up. But as the chart shows, Treasuries have continued to move down.
- In The Arora Report analysis, Treasuries moving down in spite of the Iranian attack on Israel is quite extraordinary.
- Prudent investors pay attention when something extraordinary happens in the markets.
- Lower Treasuries mean lower stock valuations. All investors should fully grasp this point. To help, there are a number of podcasts in Arora Ambassador Club that make understanding this important concept easy and practical.
- As is their pattern, the momo crowd is oblivious to this extraordinary development and is buying stocks. The momo crowd’s buy the dip without analysis mentality is on full display.
- Fed Chair Powell has been itching to cut interest rates. Clearly, the bond market is not only defying him, but it is telling him he is wrong. Powell will be participating in a Q&A. We will be paying close attention to what he says.
- San Francisco Fed President Mary Daly is saying there is no urgency to cut rates.
- Wall Street seems to be coming around. A major bank is accepting the real risk of a rate hike. Of course, as a member of The Arora Report, you already knew in advance that the data could force the Fed’s hand to raise rates at a time when everyone expects rate cuts.
- Lower Treasury bonds mean higher yields in the U.S. Higher yields mean a higher dollar.
- Central Banks of China, India, and Indonesia intervened in the forex market to defend their currencies against the dollar.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
International Monetary Fund (IMF)
IMF is warning the U.S. on excessive spending and ballooning debt. IMF is also increasing its forecast of global growth in 2024 to 3.2% from 3.1%.
Housing Slows
After a breakneck pace, new home construction is finally slowing. Here are the details:
- March housing starts came at 1.321M vs. 1.485M consensus.
- March building permits came at 1.458M vs. 1.518M consensus.
China – Beneath The Surface
China GDP growth beat the consensus. In The Arora Report analysis, looking beneath the surface, there is weakness. Here are the details:
- GDP came at 5.3% year-over-year vs. 4.8% consensus.
- March Industrial Production came at 4.5% year-over-year vs. 6.0% consensus.
- March Retail Sales came at 3.1% year-over-year vs. 5.1% consensus.
Magnificent Seven Money Flows
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), Apple (AAPL), Alphabet (GOOG), and Meta (META).
In the early trade, money flows are negative in 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 *** (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is *** in the early trade.
Gold
The momo crowd is *** gold in the early trade. 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) halving is projected to be on April 19. So far, whales have been very successful in using the halving as a pump to get mom and pop excited to buy bitcoin over $70,000 while whales themselves took profits.
Bitcoin is trading around $63,000 as of this writing. Of course, as a member of The Arora Report you already knew this could happen. The easiest way to understand bitcoin halving and what is different this time is to listen to the podcast titled “BITCOIN HALVING – SIX SECRETS WHALES DO NOT WANT YOU TO KNOW.”
Markets
Our 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.
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.
Gold futures are at $2392, silver futures are at $28.43, and oil futures are at $84.77.
S&P 500 futures are trading at 5113 as of this writing. S&P 500 futures resistance levels are 5210, 5256, and 5400: support levels are 5020, 4918, and 4852.
DJIA futures are up 233 points.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash or Treasury bills 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.
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 seven 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.
To take a free 30-day trial to paid services to gain access to more opportunities, please click here.
This post was just published on ZYX Buy Change Alert.
Markets can generate substantial wealth for knowledgeable investors. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE
TRIAL TO PAID SERVICES.
Please click here to take advantage of a FREE 30 day trial.
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.
