By Nigam Arora & Dr. Natasha Arora

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

A Tell Ahead

Please click here for a chart of Walmart stock (WMT)

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of WMT stock is being used to illustrate the point.
  • Walmart is the largest retailer in the U.S.  For this reason Walmart earnings are very important to the stock market.
  • The chart shows that WMT stock has broken out of the resistance zone on earnings.
  • RSI on the chart shows that WMT stock is now over bought.
  • In The Arora Report analysis, the follow up to the initial WMT breakout will be a tell for the entire stock market with the exception of tech stocks.  If the breakout leads to a further rally, it will be a positive.  If the breakout fails, it will be a negative.  
  • WMT earnings are above the consensus and whisper numbers.  Here are the details:
    • Q1 earnings came at $0.60 vs. $0.52 consensus.
    • Q1 revenues came at $161.51B vs. $159.5B consensus.
    • U.S. comp sales rose 3.8%.
    • WMT projects Q2 EPS of $0.62 – $0.65 vs. $0.64 consensus.
    • WMT projects FY25 EPS at the high or slightly above  $2.23 – $2.37 vs. $2.36 consensus.
  • In The Arora Report analysis, Walmart is beating estimates because it is attracting wealthier consumers who previously did not shop at Walmart.  This is the result of consumers seeking value as a result of high inflation.  Walmart is benefiting from inflation.
  • WMT is in the ZYX Buy Model Portfolio.  It is long from $19.25.  Long time members of The Arora Report now have a gain of 228%. Along the way, based on Buy Now ratings and higher buy zones, there have been plenty of opportunities for newer members to buy WMT stock at great prices.  For new members, see the Buy Now rating and buy zone in the Model Portfolio.  There are plenty of opportunities in WMT and other great stocks in the Model Portfolio for new members.  In addition, there is a continuing stream of new ideas and opportunities in existing positions for new members.
  • Initial jobless claims came at 222K vs. 218K consensus, but whisper numbers were running around 240K.  In the early trade, stock market bulls are not liking this number.  Upon release of this data, some selling came into the stock market.   Stock market bulls’ reason that the Fed is more likely to cut rates earlier if jobless claims rise.  As we have written before, this data is volatile.  Investors should look at a four week moving average and not get carried away based on week to week fluctuations.  Initial jobless claims is a leading indicator and carries heavy weight in our adaptive ZYX Asset Allocation Model with inputs in ten categories.  In plain English, adaptiveness means that the model changes itself with market conditions.  Please click here to see how this is achieved.  One of the reasons behind The Arora Report’s unrivaled performance in both bull and bear markets is the adaptiveness of the model.  Most models on Wall Street are static.  They work for a while and then stop working when market conditions change.
  • The Fed’s Neel Kashkari said the Fed is likely to keep interest rates unchanged a bit longer.
  • More Fed speak is ahead from the Fed’s Barkin, Harker, Mester and Bostic.
  • 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.


Housing starts came at 1.36M vs. 1.44M consensus.  Building permits came at 1.44M vs. 1.48M consensus.

In The Arora Report analysis, the data indicates that the red hot market for new houses is beginning to cool.  

Magnificent Seven Money Flows

In the early trade, money flows are positive in Nvidia (NVDA).

In the early trade, money flows are neutral in Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Microsoft (MSFT), and Tesla (TSLA).

In the early trade, money flows are negative in Meta (META).

In the early trade, money flows are neutral 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, very short term trades, consider following the momo crowd and not smart money.


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.


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

For longer-term, please see oil ratings.



Bitcoin (BTC.USD) is continuing its run along with speculative stocks after CPI data yesterday and is now trading above $66,000.


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 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.

Gold futures are at $2386, silver futures are at $29.79, and oil futures are at $79.29.

S&P 500 futures are trading at 5333 as of this writing.  S&P 500 futures resistance levels are 5400, 5500, and 5622: support levels are 5256, 5210, and 5020.

DJIA futures are down 16 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.

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 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.

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This post was just published on ZYX Buy Change Alert.

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Picture of Nigam Arora

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.

Picture of Dr. Natasha Arora

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.

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