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.’

JP MORGAN KICKS OFF EARNINGS SEASON, INTEL AND AMD CHINA PROBLEM, POTENTIAL IRANIAN ATTACK

April 12, 2024

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

High Expectations

Please click here for a chart of JP Morgan stock (JPM).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of JPM stock is being used to illustrate the point.
• JP Morgan has kicked off earnings season.
• The chart shows that immediately after earnings release, JPM stock fell about 5%.
• The chart shows that the dip buyers immediately stepped in with aggressive buying.
• The chart shows the rising trendline after JPM reported earnings in January.
• The chart shows that after today’s earnings release the trendline is broken, at least temporarily.
• JPM reported EPS of $4.63 vs. $3.82 consensus.  JPM reported revenues of $42.5B vs. $38.53B consensus.
• Even though JPM reported better than consensus, whisper numbers have been jacked up going into earnings.    Whisper numbers are the numbers analysts privately share with their best clients.  These numbers are often different from the numbers the same analysts publish.  This is a technique used by analysts to generate business.
• The foregoing illustrates why you need to be very careful following Wall Street analysts unless you are one of their best clients.  Prudent investors depend on independent, objective sources such as The Arora Report for analysis.
• Bank earnings are very complex.  Here is a plain English analysis from The Arora Report of JPM earnings:
  • The quarter was fine.
  • The guidance was slightly less than expected.
  • Going forward, expenses will be higher than expected.
  • Going forward, NII will be slightly less than expected. NII is the difference in the interest income between what the bank charges borrowers and what the bank pays to depositors.
• JPM is in the ZYX Buy Model Portfolio. It is long from $34.14. This represents a 458% gain for members of The Arora Report.  There will be a separate post on what to do now.
• Citigroup (C) reported earnings better than the consensus and better than whisper numbers.  Citigroup is a restructuring story.  So far, restructuring appears to be working.
• Citigroup is the most lucrative stock among major banks, but consider buying it only in the buy zone.  Citigroup is in the portfolio that surrounds the Core Model Portfolio.
• Wells Fargo (WFC) reported earnings better than the consensus but less than the whisper numbers.
• The take home message for investors is two fold:
  • Do not trust published estimates from Wall Street analysts.  If you are their best client, focus on their whisper numbers or rely on independent sources such as The Arora Report.
  • The bar this earnings season is very high.  Since the economy has stayed strong, many companies will be able to meet the bar.  However, if the economy weakens, companies will start missing whisper numbers in future quarters.  The easiest to understand source of macro data is the Morning Capsules.  It is important for investors to stay tuned to the macro data.
• Intel (INTC) and AMD (AMD) have a new China problem.  China is instructing its telecom carriers to stop using AMD and INTC chips.
• We have previously written that prudent investors should stay alert to a potential Iranian attack on Israel.  Wall Street has become complacent and the momo crowd is oblivious.  However, you need to know that there are intelligence reports indicating that Iran is preparing an attack.
• 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 neutral in Amazon (AMZN).

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

In the early trade, money flows are negative 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 futures have crossed $2400 on intelligence reports of a potential Iranian attack.  

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 futures are jumping on intelligence reports of a potential Iranian attack.  

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) is 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 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 $2414, silver futures are at $29.25, and oil futures are at $86.78.

S&P 500 futures are trading at 5216  as of this writing.  S&P 500 futures resistance levels are 5256, 5400, and 5500: support levels are 5210, 5020, and 4918.

DJIA futures are down 229 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.

BUYING IN THE STOCK MARKET ON TAMER PPI AND ECB SIGNAL

April 11, 2024

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

Buying In The Stock Market

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 shows that the stock market is decisively below the trendline.
• The chart shows that the stock market is stabilizing at the level where it fell yesterday after the release of hotter Consumer Price Index (CPI).
• Stock futures were down before the release of Producer Price Index (PPI).  Stock futures jumped on the release of PPI data.
• PPI came tamer than expected.  Here are the details:
  • Headline PPI came at 0.2% vs. 0.3% consensus.
  • Core PPI came at 0.2% vs. 0.2% consensus.
• In The Arora Report analysis, PPI is more well behaved compared to CPI because PPI is mostly goods oriented.  Cheaper goods from China are flooding the market.  Of note is that inflation is going the other way in China compared to the U.S.  Here is the latest data from China:
  • CPI came at 0.1% vs. 0.1% consensus.
  • PPI came at 0.1% vs. 0.1% consensus.
• Weekly initial claims came at 211K vs. 218K consensus.  This indicates that the jobs picture is remaining strong.
• Statistically, yesterday’s fall of 1% in S&P 500 was the fifth such fall in 2024.  In the prior instances in 2024, S&P 500 gained an average of 1% the following day.  Those who buy based on statistics are aggressively buying stocks.
• 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.

Europe

The European Central Bank (ECB) is keeping its key interest rate at 4%, in line with consensus.  ECB is preparing to cut rates in June.  This is helping to bring buying into the stock market.

It is likely that the paths of the ECB and the Fed are diverging.

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 (AAPL).

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

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) is seeing ***.  Bitcoin is above $70,000.

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 $2358, silver futures are at $28.13, and oil futures are at $85.61.

S&P 500 futures are trading at 5212 as of this writing.  S&P 500 futures resistance levels are 5256, 5400, and 5500 : support levels are 5210, 5020, and 4918.

DJIA futures are up 5 points.

RAISE CASH, NEW DATA SHOWS HOTTER INFLATION – MOMO GURUS WRONG AGAIN, BULL MARKET INTACT

April 10, 2024

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

Raise Cash

It is time to increase cash by 4%.  Hedges were recently raised.  Please see the protection band section below.

The bull market is intact, but the probability of a pullback has gone up. The tentative plan is to buy the pullback.  Stay tuned to the Real Time Feeds

Hotter Inflation 

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 shows that the stock market has broken the upward sloping trendline that has defined the rally.
• The chart shows the Arora call to raise hedges prior to the drop.
• The chart shows the support zone from which the breakout occurred.  The tentative plan is to buy if the stock market pulls back to the support zone.  However, this will need to be adjusted – read the next point.
• The probability of the stock market pulling back to the support zone is less than 50%. The reason is that the buy the dip crowd is already aggressively buying the dip and is prepared to aggressively buy more.  Stay tuned to the Real Time Feeds of The Arora Report for more information.
• The new data shows that inflation is hotter than expected.  Here are the details:
  • Headline CPI came at 0.4% vs. 0.3% consensus.
  • Core CPI came at 0.4% vs. 0.3% consensus.
• As a reference, the new data equates to inflation at an annualized rate of 4.8%.  The Fed’s target is 2%.
• In The Arora Report analysis, this time, the momo gurus are going to have difficulty persuading their followers to buy stocks.  One reason is that momo gurus have been wrong at every step of the way this year.  Having said that, do not underestimate the cleverness of momo gurus to come up with a new narrative to persuade investors to buy stocks.  At the same time, do not underestimate the power of greed in the momo crowd.  The momo crowd is very easy to influence because at best, the momo crowd does shallow analysis and is driven by the herd mentality.
• It is worth repeating that the bull market is intact.  
• It is also worth repeating that the tentative plan is to buy on a pullback.  
• It is also worth repeating that you can buy the pullback only if you are holding enough cash or you have hedged positions.   
• Notwithstanding the foregoing, nothing is cast in stone.  Prudent investors stay flexible and respond to new data as it comes in.  The foregoing is only the most probable scenario, but it can change rapidly. For this reason, it is important to regularly read the Morning Capsules.
• 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.

Buy Zones And Buy Now Ratings

Consider not starting any new positions from the long side unless there is a specific post or there is an inverse ETF.

Starting new positions from the short side is fine.

This tentative plan will change as new data comes in.  Consider being patient and staying tuned to the Real Time Feeds.

Magnificent Seven Money Flows

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

In the early trade, money flows are negative 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

API crude inventories came at a build of 3.034M barrels vs. a consensus of 2.415M 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) is being sold on hotter inflation data. This shows again the false narrative that bitcoin have promoted of bitcoin being a hedge against inflation.

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 $2350, silver futures are at $28.05, and oil futures are at $85.73.

S&P 500 futures are trading at 5186 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 down 446 points.

IMPORTANT CPI DATA AHEAD – CPI WILL DETERMINE THE NEAR TERM DIRECTION OF THE STOCK MARKET

April 9, 2024

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

Stocks And Bonds Diverge

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

Note the following:

• The chart shows that TLT has fallen in the support zone.
• Historically, when bonds fall, so do stocks.  This time, stocks have continued to levitate.
• Historically falling bonds often lead to a sell-off in tech stocks.
• Clearly, stock investors and bond investors see the future differently.
• Bond investors appear to be concerned about three things.
  • Rising national debt may keep yields high.
  • Rising government budget deficit may someday lead to a failed Treasury auction.  Therefore, bond investors want a premium in yields, causing bond prices to go lower.
  • If the economy is strong, there is no need for a rate cut.
• In contrast to bond investors, stock investors are ignoring all of the three concerns.  There is some validity to what stock investors are doing for two reasons:
  • Powell is itching to cut rates even though the data does not show a need to cut rates.  As we have previously shared with you, some conservative analysts believe Powell is playing politics to help Biden get re-elected.  Trump has said that he will not reappoint Powell.
  • AI is unleashing a tremendous amount of productivity.
• Prudent investors should stay alert because historically bonds have often led stocks.  Further, large bond investors tend to be smarter than stock investors.
• In The Arora Report analysis, the main reason for the divergence between stocks and bonds is that the stock market is dominated by the momo crowd and the sentiment is extremely positive.
• The divergence is going to come to a head Wednesday morning when CPI data is released. Stay tuned to The Arora Report Real Time Feed for what to do after the release of the CPI data.
• For the day, you need to know that the momo crowd historically buys ahead of key data on hope strategy.  So far, in the premarket, the momo crowd’s pattern is holding.  In contrast, smart money tends to lighten up ahead of key data because the data represents risk.
• 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 Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Microsoft (MSFT), Meta (META), and Tesla (TSLA).

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

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

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 *** in oil in the early trade.  Smart money is *** in the early trade.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is over $70,000 as retail investors continue to buy due to the bitcoin halving pump.  Those who seriously want to know the truth about bitcoin halving should listen to the podcast titled “BITCOIN HALVING – SIX SECRETS WHALES DO NOT WANT YOU TO KNOW” in Arora Ambassador Club.

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 $2368, silver futures are at $28.20, and oil futures are at $86.23.

S&P 500 futures are trading at 5266 as of this writing.  S&P 500 futures resistance levels are 5400 and 5500 : support levels are 5256, 5210, and 5020.

DJIA futures are up 42 points.

ARTIFICIAL INTELLIGENCE AS CONSEQUENTIAL AS ELECTRICITY – SAYS MOST INFLUENTIAL BANKER IN THE WORLD

April 8, 2024

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

AI As Consequential As Electricity

Please click here for a chart of JPMorgan stock (JPM).

Note the following:

• The Morning Capsule is about the big picture, not an individual stock.  The chart of JPM stock is being used to illustrate the point.
• JP Morgan is the largest U.S. bank.  Its CEO Jamie Dimon is the most influential banker in the world.  Prudent investors pay attention to what Jamie Dimon says.  Prudent investors recognize that Dimon has access to more private data than almost anyone else.
• Jamie Dimon said, “We are completely convinced the consequences will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet, among others.”
• The trendline on the chart shows the strong up move in JP Morgan stock since the last earnings.
• A quick look at the JPM chart shows that JPM is doing significantly better than popular stocks such as Apple (AAPL) and Tesla (TSLA).
• JP Morgan will kick off the earnings season on Friday, April 12.
• JPM is long from $34.14 in the  ZYX Buy Model Portfolio from The Arora Report.  The current price of $197.85 represents a gain of 480% for members of The Arora Report.
• A part of the rise in JPM stock is due to AI.  This illustrates the point that we have been sharing with you that the beneficiaries of AI are far beyond popular AI tech stocks such as Nvidia (NVDA).  
• The Arora Report was one of the first to say that a fortune is to be made in AI all the way to 2030.  However, making a fortune from AI is not going to be a straight line.  It will be treacherous at times.   To emphasize the importance of making a fortune in AI, along the way, The Arora Report has continuously reinforced this message.  The purpose of this capsule is to reinforce this message again with information from JP Morgan.
• The stronger your conviction about AI and the more knowledge you have, the more money you will extract from the markets.  At the same time, two points are important.
  • There is too much AI hype.  This over-hype can cause you losses.
  • There are also many gurus calling AI a fad.  You will be doing yourself a disservice by believing such gurus. The easiest way to build the AI knowledge you need to make a fortune is to listen to the podcasts in Arora Ambassador Club.
• Here are the key points from Jamie Dimon’s letter to shareholders:
  • The importance of AI simply cannot be overstated.
  • JPM has 300 use cases in production today.
  • AI has helped JPM significantly reduce risk in retail business by reducing fraud.
  • JPM has 2500 professionals working on AI and supportive tasks.
• The markets are taking a sigh of relief that over the weekend, Iran did not attack Israel.
• In The Arora Report analysis, prudent investors should not join the momo crowd in being oblivious to the potential of a wider Middle East conflict.  In The Arora Report analysis, the response from Iran is likely to be a surprise and at a time of Iran’s choosing and certainly not based on what stock market traders think.  
• 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 NVDA, Amazon (AMZN), Meta (META), and TSLA.

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

In the early trade, money flows are negative in AAPL.

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

The momo crowd is *** in 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

After the weekend hype, retail investors are aggressively buying bitcoin (BTC.USD) ETFs.  This time it is the retail buying and not bitcoin whales that is running up bitcoin.  Bitcoin has moved above $72,000.

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 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 $2346, silver futures are at $27.72, and oil futures are at $86.35.

S&P 500 futures are trading at 5258 as of this writing.  S&P 500 futures resistance levels are 5400 and 5500 : support levels are 5256, 5210, and 5020.

DJIA futures are up 35 points.

To take a free 30-day trial to paid services to gain access to more opportunities, please click here.

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.