WEEKLY STOCK MARKET DIGEST: MARKET MECHANICS HAVE TAKEN OVER, SEASONALLY POSITIVE NOVEMBER UNDERWAY IN THE STOCK MARKET

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By Nigam Arora & Dr. Natasha 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.’

DEPLOY CASH AND REDUCE HEDGES, APPLE LOWERS GUIDANCE, HOURLY EARNINGS MODERATE

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

Deploy Cash And Reduce Hedges

It is time to deploy more cash.  Please scroll down to the “Protection Band And What To Do Now” section below.

Consider reducing hedges.  Please see separate posts.

Hedges by themselves have become nicely profitable.  It is time to book some of those profits.

These signals are based on the presumption that market mechanics will continue to drive the stock market to the upside.  Market mechanics are very powerful.  To gain an edge by knowing market mechanics in-depth, listen to the podcasts in Arora Ambassador Club.

However, keep in mind that geopolitics and new data may cause reversal of this call quickly.  Four important risks to keep in mind are the following:

  • Hezbollah opening a northern front in Israel
  • Government shutdown
  • Unsustainable U.S. government spending
  • Unsustainable U.S. consumer spending

Wage Increases Moderate

Please click here for a chart of Apple stock (AAPL).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of AAPL stock is being used to illustrate the point.  AAPL is the largest stock and carries heavy weight in indexes.  For this reason, all investors should pay attention to AAPL.
  • The chart shows that Apple stock fell after earnings.
  • The chart shows that in spite of Apple lowering its revenue guidance, the stock is still in the support/resistance zone.
  • The chart shows that the Arora call was given to hedge AAPL position when the stock traded as high as $188.85.  AAPL stock is trading at $174.40 as of this writing in the premarket.
  • Apple is long from $4.68 and is the largest position in ZYX Buy Model Portfolio.
  • Hedges on Apple position have now become very profitable.  There is likely to be a new signal to take partial profits on Apple hedges.
  • In after hours in response to Apple guidance, AAPL stock fell as low as $171.19.  This morning, the momo crowd is taking advantage of the dip and aggressively buying AAPL stock.
  • Here are the important details from Apple earnings:
    • Apple (AAPL) provides limited guidance.  The guidance implies that the revenue for the all important December quarter will be about 5% below the consensus.
    • On the positive side, Apple has an installed base of over 2B devices and service revenues are growing.  Apple reported services revenue of $22.3B vs. $21.6B consensus.
    • Apple revenues fell for the fourth consecutive quarter.
    • iPhone sales came at $43.8B in line with the consensus.
    • Apple business in China declined by 2.5% to $15.1B.
    • On the positive side, Apple revenue in India hit an all time high.  However, in India Apple is starting from a very small base.
  • Prudent investors need to keep an eye on the antitrust trial of Alphabet (GOOG, GOOGL).  Alphabet is reportedly paying $20 – $25B per year to Apple to keep Google as the default search engine in Safari.  If Alphabet loses at the trial, this large Apple revenue may vanish.  
  • Consider buying AAPL stock if not in it or starting a trade around position if already in it, when AAPL stock falls in the new Arora buy zone.  The new buy zone is ***(To see the locked content, please take a 30 day free trial).  A trade around position is a technique used by billionaires. To learn more, see Trade Management Guidelines.
  • The chart shows that those investors who bought AAPL stock when it fell in Arora buy zone have made great profits.
  • Prudent investors should note that based on Apple’s earnings, if it was any other stock, it would have already fallen in the new Arora buy zone.  
  • The jobs report is weak for the first time in a long time.  The most important data point is that in spite of headlines of large union wage hikes, the average hourly earnings increase is less than expected and amounts to only 2.4% annualized.  Here are the details:
    • Non-farm payrolls came at 150K vs. 175K consensus.
    • Non-farm private payrolls came at 99K vs. 143K consensus.
    • Unemployment rate came at 3.9% vs. 3.8% consensus.
    • Average work week came at 34.3 vs. 34.3 consensus.
    • Average hourly earnings came at 0.2% vs. 0.3% consensus.
  • Yields are falling and bonds are rising on the weak jobs report.
  • 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.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet, Meta (META), Tesla (TSLA), and Apple.

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 *** stocks in the early trade.

Gold  

Gold has moved above $2000 on the weak jobs report.

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

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 range bound.

Markets

Our very, very short-term early stock market indicator is ***.  However, remember it is Friday.  Fridays have crosscurrents.  Short squeezes often occur on Fridays causing the market to rise.  On the other hand, many funds may lighten up to reduce risk ahead of the weekend not knowing what is going to happen in the Middle East.  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 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.

Gold futures are at $2006, silver futures are at $23.22, and oil futures are at $82.71.

S&P 500 futures are trading at 4353 as of this writing.  S&P 500 futures resistance levels are 4400, 4460, and 4600: support levels are 4318, 4200, and 4000.

DJIA futures are up 189 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.

See also  SUPER MICRO FOLLY, STOCK MARKET DIRECTION DEPENDS ON WHICH POWELL SHOWS UP – OBJECTIVE OR POLITICAL

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.

 

APPLE EARNINGS AND JOBS REPORT AHEAD, MARKET MECHANICS TAKING OVER

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

Market Mechanics

Please click here for a chart of Apple stock (AAPL).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  A chart of AAPL stock is being used to illustrate the point.
  • AAPL is the largest stock and carries heavy weight in the indexes.  For this reason, AAPL stock is very important to the stock market.  Apple reports earnings after the market close.
  • The chart shows that AAPL stock made a lower low below the support/resistance zone.
  • The chart shows that AAPL stock moved up back into the support/resistance zone yesterday on the Fed and market mechanics induced rally.
  • Market mechanics continue to drive aggressive stock buying this morning.
  • Apple has been showing declining growth for several quarters, and Apple has China troubles.  AAPL stock is also very expensive.  However, none of the traditional fundamentals seem to matter in the case of Apple because a large number of investors believe in Apple and they want to buy AAPL stock.
  • We will be carefully looking at Apple’s sales in China, iPhone sales, services growth, and AI plans.  The mention of AI is still very powerful.  For example, AMD (AMD) reported weak earnings Tuesday.  After earnings, the stock fell to $94, but aggressive buying came in when the company gave rosie projections of its AI chip.  The stock moved up $14 from its low.
  • The all important jobs report will be released Friday at 8:30am ET.  The jobs report will test the budding rally in stocks.
  • Initial jobless claims came at 217K vs. 214K consensus.  This indicates that the jobs picture is staying strong.   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.
  • Q3 Unit Labor Costs – Prelim came at -0.8% vs. 1.5% consensus.  In The Arora Report analysis, this is very positive data for the stock market. 
  • Q3 Productivity – Prelim came at 4.7% vs. 3.6% consensus.  In The Arora Report analysis, this increase in productivity is also very positive for the stock market.  In the long run, the use of AI will significantly increase productivity.  
  • Please be sure to read yesterday’s Afternoon Capsule as hedges were reduced and the call was to deploy more cash, i.e. buy more stocks.
  • A part of yesterday’s rally in the afternoon was blind money buying.  Blind money buying will continue today.
  • 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.

England

The Bank of England left its rate unchanged at 5.25% vs. 5.25% consensus.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple.

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 *** stocks in the early trade.

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

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) has crossed $35,000.

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 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.

Gold futures are at $1997, silver futures are at $23.11, and oil futures are at $80.76.

S&P 500 futures are trading at 4295 as of this writing.  S&P 500 futures resistance levels are 4318, 4400, and 4460: support levels are 4200, 4000, and 3950..

DJIA futures are up 220 points.

 

POSITIVE STOCK MARKET SEASONALITY AHEAD AFTER LONGEST LOSING STREAK SINCE PANDEMIC CRASH, AI EXCITEMENT

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

Positive Treasury News

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 is a monthly chart to give you a long term perspective.
  • The chart shows that the stock market has just finished a three consecutive month losing streak.
  • The chart shows this is the longest losing streak since the pandemic.
  • As the stock market enters November, it is rare to have four consecutive losing months.
  • The chart shows that the last time a four consecutive month drop occurred, it was in 2011.  Long time members of The Arora Report may recall that in 2011, The Arora Report was one of the rare services that produced large positive returns.  Most services and banks lost money.  
  • On the positive side, there have only been five prior times when the stock market went down in August, September, and October.  These five times were in 2016, 1990, 1977, 1957, and 1952.  In each of these five times, the stock market went up in November.
  • The chart shows RSI divergence.  From a longer term perspective, this is a technical negative.
  • Yesterday, we wrote:

In The Arora Report analysis, the Treasury issuance statement is of utmost importance to stock investors.  If yields rise further on long term bonds, this will be a negative for the stock market. On the other hand, if yields fall, it will be a positive for the stock market.

  • We also previously wrote:

In The Arora Report analysis, Treasury issuance announcement is more important for investors than the Fed decision.

  • Here are the details of the Treasury announcement:
    • “The U.S. Department of the Treasury is offering $112 billion of Treasury securities to refund approximately $102.2 billion of privately-held Treasury notes maturing on November 15, 2023. This issuance will raise new cash from private investors of approximately $9.8 billion. The securities are: A 3-year note in the amount of $48 billion, maturing November 15, 2026; A 10-year note in the amount of $40 billion, maturing November 15, 2033; and A 30-year bond in the amount of $24 billion, maturing November 15, 2053.”
  • In The Arora Report analysis, the details of the announcement are better than expectations.  This is bringing in buyers in the stock market in the early trade.  
  • Today is Fed day. The Fed will announce its decision at 2pm ET, followed by Powell’s press conference at 2:30pm ET.
  • ADP Employment Change came at 113K vs. 100K consensus.  This indicates that the jobs picture continues to stay strong.
  • Prudent investors should take note of the foolishness that the momo crowd often exhibits.  WeWork (WE), once valued over $47B due to excitement by venture capitalists and the momo crowd, is filing for bankruptcy.  WE stock once valued over $500 has fallen to $1.37 as of this writing in the premarket.  
  • In yesterday’s Afternoon Capsule, we wrote:

AMD reports earnings after hours today.  AMD earnings are particularly important as they can impact market sentiment due to AMD’s popularity among retail investors.

  • AMD reported earnings worse than expected, but investors are buying the stock anyway on excitement about its AI chip.
  • Starting today, Microsoft (MSFT) is selling its AI Copilot to enterprises for $30 per month.  The expectations are that 7M people will be using Copilot by the end of 2024.  Considering that there are 300M paid Microsoft users, investors are excited about the potential of AI Copilot.
  • This is the first day of the month.  On the first two days of the month, blind money flows into the stock market.  Blind money is the money that flows into the stock market without any analysis and irrespective of market conditions.  This morning, Wall Street is front running blind money and buying stocks to sell to blind money at a profit later in the day.
  • 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.
See also  MAKE OR BREAK MOMENT FOR AI FRENZY AHEAD – NVIDIA EARNINGS, HOPES DASHED IN U.K.

Bank Of Japan

We have been sharing with you the importance of Bank of Japan (BOJ) actions to the U.S. stock market.  BOJ unexpectedly stepped into the bond market to intervene against speculators.  The 10-year JGB touched 0.97%.  This is a new high in a decade. 

Magnificent Seven Money Flows

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

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

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.

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

API crude inventories came at a build of 1.347M barrels vs. a consensus of a draw of 1.601M 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) continues to be range bound.

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 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 $1995, silver futures are at $22.88, and oil futures are at $83.09.

S&P 500 futures are trading at 4213 as of this writing.  S&P 500 futures resistance levels are 4318, 4400, and 4460: support levels are 4200, 4000, and 3950.

DJIA futures are up 44 points.

 

TREASURY ANNOUNCEMENT MORE IMPORTANT THAN FED’S, JAPAN ABANDONS YIELD CONTROL, TESLA UNDER $200

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

The Folly Of Investor Celebration

Please click here for a chart of 20+ year Treasury bond ETF (TLT).

Note the following:

  • The chart shows when The Arora Report predicted that a record supply of Treasuries was ahead.  A record supply meant higher yields and lower bond prices.
  • With the benefit of hindsight, The Arora Report prediction has proven spot on.
  • The chart shows that since the Arora call, there has been a significant drop in bond prices.
  • The chart shows that bonds are consolidating significantly below the lower resistance zone.
  • We shared with you in yesterday’s Afternoon Capsule:
  • The announcement from the U.S. Treasury is adding to the buying pressure in stocks.  Here are the details of the Treasury announcement:
    • From October to December, the Treasury will borrow $776B.  In The Arora Report analysis, this amount is $76B less than the consensus.
    • From January to March, the Treasury will borrow $816B.
  • That is $1.592T of borrowing over six months.  Investors are celebrating by buying stocks.  What is wrong with this picture?  Celebrating this level of borrowing is a folly.
  • The second part of the Treasury announcement is still ahead.  In the Treasury’s issuance announcement, the Treasury will provide details of the duration of the notes and bonds it will be selling.
  • Details of the issuance have the potential to move the yields, and in return bonds, by a large amount.  If more issuance is of long duration, long term yields will rise.  If most of the issuance is in the short term, the impact is uncertain.
  • In The Arora Report analysis, the Treasury issuance statement is of utmost importance to stock investors.  If yields rise further on long term bonds, this will be a negative for the stock market. On the other hand, if yields fall, it will be a positive for the stock market.
  • The FOMC meeting starts today.  The FOMC decision will be announced at 2:00pm ET tomorrow followed by Powell’s press conference at 2:30 pm ET.
  • In The Arora Report analysis, Treasury issuance announcement is more important for investors than the Fed decision.
  • Tesla (TSLA) is an important stock for the sentiment in the stock market.  As of this writing, TSLA stock is trading below $200.  The reason for the drop is two fold:
    • ON Semiconductor (ON), a supplier of silicon carbide chips for electric vehicles, reported lower than expected earnings and painted a weak picture of demand from EV manufacturers.
    • Panasonic (PCRFY), a supplier of batteries for Tesla vehicles, is cutting battery production.
  • The drop in TSLA stock hit other EV stocks such as RIVN, LCID, FSR, and PSNY.  Lithium stocks and ETF such as LTHM, LIT, SQM, ALB, SGML, and LAC have also been hit.
  • Among the important earnings this morning, earnings from CAT, PFE, AMGN, and BP are lower than expected.
  • 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.

Japan

We have been sharing with you the importance of Bank Of Japan (BOJ) policies for U.S. stock investors.  In a major development, BOJ is abandoning strict yield control.  In the long term, this is negative for the U.S. stock market.  

China

In China, factory activity has returned to contraction.  Here are the details:

  • Manufacturing PMI came at 49.5 vs. 50.2 consensus.
  • Non-Manufacturing PMI came at 50.6 vs. 51.8 consensus.

After this data, there are more demands for government stimulus.

Eurozone

Eurozone inflation eases.  Here are the details:

  • Headline CPI came at 0.1% month-over-month vs. 0.3% consensus.
  • Headline CPI came at 2.9% year-over-year vs. 3.1% consensus.
  • Core CPI came at 0.2% month-over-month.  The prior was 0.2%.
  • Core CPI came at 4.2% year-over-year vs. 4.2% consensus.

Flash Q3 GDP came at -0.1% vs. 0.0% consensus.  This indicates that the economy in Europe is shrinking.

Magnificent Seven Money Flows

In the early trade, money flows are positive in  Meta (META), Microsoft (MSFT), and Alphabet (GOOG).

In the early trade, money flows are neutral in  Apple (AAPL) and Amazon (AMZN).

In the early trade, money flows are negative in Tesla and Nvidia (NVDA).

In the early trade, money flows are mixed in S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ).

See also  SMARTEST BANKER IN THE WORLD SENDS A MESSAGE TO INVESTORS – ARE YOU LISTENING?

Momo Crowd And Smart Money In Stocks

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

Gold   

Gold continues to stay above $2,000. 

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) continues to levitate.

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 down, and bonds are ticking up.

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 $2004, silver futures are at $23.12, and oil futures are at $82.99.

S&P 500 futures are trading at 4194 as of this writing.  S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.

DJIA futures are down 33 points.

 

SOME CHINESE ABANDONING APPLE, STOCK BUYING ON NO RESPONSE FROM IRAN, ALL EYES ON BANK OF JAPAN

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

Buying On Iran, Ignoring Apple

Please click here for a chart of Apple stock (AAPL).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of AAPL stock is being used to illustrate the point.
  • This morning investors are aggressively buying stocks on no military response from Iran or its proxies over the weekend to Israeli actions in Gaza.
  • Investors are ignoring the potential bad news on Apple.  Apple is the largest stock and carries a very heavy weight in the indexes.
  • There are reports that many Chinese are abandoning iPhones in favor of Huawei’s Mate 60 Pro.
  • The chart shows when the Morning Capsule read,

Another challenge to Apple is a chip breakthrough in China leading to Huawei Mate 60 Pro.  Previously due to the U.S. chip sanctions, Huawei was not able to produce a 5G phone.  In a breakthrough, Semiconductor Manufacturing International, aka SMIC, a Chinese state-owned chip manufacturer was able to produce an advanced chip.  Before the U.S. ban, Huawei had 12% of the smartphone market globally.  Especially in China, the ban benefited Apple.  The U.S. government is concerned and investigating how Huawei was able to produce such an advanced phone.  This is an important subject for investors.

  • As a member of The Arora Report, you have had an advanced notice of Apple’s trouble in China through various posts.
  • China is also targeting Apple’s largest supplier Foxconn with tax audits and land use audits.  Foxconn is the main assembler of iPhones.
  • The chart shows that after the iPhone 15 release, attempts to break above the top band of the support/resistance zone have failed.
  • The chart shows that AAPL stock is currently below the low band of the support/resistance zone.
  • The chart shows that members of The Arora Report were able to buy AAPL stock last year at a lucrative price when it dipped in the Arora buy zone.
  • Why are investors ignoring the news from China regarding Apple?  In The Arora Report analysis, the reason appears to be that the impact will be felt in the current quarter and not in the last quarter.
  • Apple will report earnings later this week for the last quarter.
  • Good earnings from McDonalds (MCD) have brought in more buying.  MCD is a member of Dow Jones Industrial Average.
  • 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.

Bank Of Japan

We have been sharing with you that the Bank of Japan’s (BOJ) actions are very important to the U.S. stock market for two reasons.

  • Many funds have been borrowing in yen at very low rates and investing in the U.S. stock market.
  • Japanese institutions are big holders of U.S. Treasury bonds.

The Bank of Japan will announce its decision tonight.  There is no consensus.  Opinions range from BOJ doing nothing to BOJ completely abandoning its yield curve control policy.

Fed

The FOMC meeting starts tomorrow.  The rate decision will be announced on Wednesday at 2pm ET followed by Powell’s press conference at 2:30pm ET.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Amazon (AMZN), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Meta (META), Tesla (TSLA), and Apple.

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.

Gold 

Gold is over $2000.

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

Oil is being sold on no military action from Iran over the weekend.

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) continues to levitate, but there is some disappointment that whales did not run it up higher over the weekend, taking advantage of low liquidity.

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 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.

Gold futures are at $2009, silver futures are at $23.62, and oil futures are at $84.25.

S&P 500 futures are trading at 4161 as of this writing.  S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.

DJIA futures are up 212 points.

 

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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.

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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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