By Nigam Arora & Dr. Natasha Arora
To gain an edge, this is what you need to know today.
Turkey Is Biggest Winner
Please click here for a chart of Turkey ETF (TUR).
Note the following:
- In Syria, the regime of Bashar al-Assad has fallen after a lightning fast advance by rebels over 11 days. Bashar al-Assad’s father Hafez al-Assad seized power in a military coup in November 1970. In a stunning development, the 54-year al-Assad rule of Syria has ended. Bashar al-Assad has been granted asylum in Russia.
- Hayat Tahrir al-Sham’s (HTS), the rebel group that captured Syria’s capital Damascus, origin goes back to al-Qaeda. This group was essentially the Syrian branch of al-Qaeda. HTS is trying to rebrand itself with assurance to minorities and has so far, not engaged in violence. However, in The Arora Report analysis, prudent investors should be aware that this is a rigid Islamist group that had once vowed to impose Sharia law.
- In The Arora Report analysis, there is a power vacuum in Syria. The danger is the establishment of an Islamic caliphate.
- In The Arora Report analysis, the biggest winner from the situation in Syria is Turkey.
- The chart shows stocks in Turkey are up. Foreign money is flowing into Turkish stocks this morning.
- The chart shows that Turkey ETF TUR is now at the top band of the resistance zone.
- As clarity develops, there may be an opportunity in Turkey. ZYX Emerging has continuously followed Turkey for 17 years.
- Turkey is a member of NATO, but is also closely aligned with Russia. Turkey has also been a big supporter of Hamas in Gaza.
- The U.S. relationship with Turkey lately has been tense. Now, Turkey will have more leverage against both the U.S. and Russia.
- The U.S. has about 900 troops in Syria. The U.S. is conducting airstrikes against ISIS targets in Syria to prevent ISIS from gaining power. Yesterday, the U.S. conducted 75 airstrikes in Syria.
- The biggest losers are Iran, Russia, and Hezbollah. Russia has a naval base and an air base in Syria. The Russian naval base in Syria is Russia’s only warm water naval base.
- Due to the prospects of instability, investors are buying gold, silver, and oil. Investors are selling bitcoin and other cryptos. This again shows that bitcoin and cryptos are not a hedge against global instability.
- In The Arora Report analysis, China is gearing up to fight Trump’s potential tariffs. China has picked Nvidia (NVDA) as the first target. As a result, NVDA stock is seeing selling.
- China is promising stimulative monetary policy. Stocks in Hong Kong and Shanghai are jumping. Foreign money is flowing into China.
- More inflation data is coming this week. Consumer Price Index (CPI) will be released on Wednesday at 8:30am ET, and Producer Price Index (PPI) will be released on Thursday at 8:30am ET. This data may be market moving.
- 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. The 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 Tesla (TSLA).
In the early trade, money flows are neutral in Apple (AAPL), Meta (META), and Nvidia (NVDA).
In the early trade, money flows are negative in Amazon (AMZN), Alphabet (GOOG), and Microsoft (MSFT).
In the early trade, money flows are neutral in S&P 500 ETF (SPY) and negative 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.
Very Very Short-Term Indicator
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.
Gold
The momo crowd is *** gold in the early trade. Smart money is *** gold in the early trade.
For longer-term, please see gold and silver ratings.
Oil
Oil is being bought on instability in Syria.
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 under $100K and seeing selling on Syria developments.
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 6096 as of this writing. S&P 500 futures resistance levels are 6131 and 6256: support levels are 6017, 5926, and 5748
DJIA futures are up 30 points.
Gold futures are at $2687, silver futures are at $32.69, and oil futures are at $68.26.
Protection Band And What To Do Now
It is important for investors to look ahead and not in the rearview mirror. The proprietary protection band from The Arora Report is very popular. The 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.
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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.
