WEEKLY STOCK MARKET DIGEST: BE FOREWARNED – AI EXUBERANCE SHOWS INITIAL CRACKS BUT POWELL’S ITCH PROPELLING MARKET HIGHER

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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.’

AGGRESSIVE STOCK BUYING ON RISING LAYOFFS AND REVENUE RISE AT THE LARGEST CHIP MANUFACTURER TSMC

May 10, 2024

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

Buying On Rising Layoffs

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 vigorously risen from the recent pullback.
  • The chart shows that RSI reached oversold levels during the recent pullback and now has risen to touch the lower band of the overbought zone.  Historically, this setup leads to more stock market gains.
  • The chart shows that the volume during the recent rise is not heavy.  This indicates lack of conviction.
  • The chart shows that the stock market is now in the resistance zone.
  • In The Arora Report analysis, stops of the short sellers are right above the resistance zone.   If the stock market rises further, Wall Street’s hunt and destroy algorithms will kick in, taking out the stops of short sellers and igniting a short squeeze.  The result of such a scenario would be a new stock market high.  
  • Yesterday in the Morning Capsule we shared with you:

Jobless claims came at 231K vs. 213K consensus.  This indicates that the job market is beginning to slow.

  • The bulls latched on to the rise in jobless claims and aggressively bought stocks.  There is merit to this line of thinking because Powell is already itching to cut rates and rising layoffs will give him an excuse to cut rates.
  • Prudent investors need to be somewhat careful as weekly jobless claims series is very volatile.
  • For proper analysis at The Arora Report, in addition to the weekly data, we look at a four week moving average of initial jobless claims.  The four week moving average is now at 215K – up 2.26% from the prior week and down 10.14% from a year ago.  Considering the size of the U.S. economy, a rise of 2.26% over the prior week is hardly meaningful, but do not tell that to trigger happy stock market bulls.  Prudent investors should watch the trend over a period of several weeks, not just one week.  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.
  • Adding to the optimism this morning is a report of rising revenues at the world’s largest chip manufacturer Taiwan Semiconductor Manufacturing Company (TSM).  TSM is manufacturing a vast majority of the artificial intelligence chips, and the data shows sales are booming.  Here are the details:
    • April revenues came at T$236.02B.  This is up 59.6% year-over-year and up 21% month-over-month.
    • January – April revenue came at T$828.67B. This is 26% year-over-year.
  • Data from TSM is bringing buying into artificial intelligence stocks such as Nvidia (NVDA), AMD (AMD), Micron (MU), and Applied Materials (AMAT).
  • 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.

China

Stocks in Hong Kong have reached a nine month high.  There is China risk, but stocks in Hong Kong represent the best value in the whole world at this time.  The ETF of choice is FXI.  For the buy zone and short, medium, and long term ratings, please see ZYX Emerging Model Portfolio.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Apple (AAPL) Meta (META), NVDA, and Tesla (TSLA).

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

In the early trade, money flows are negative in Alphabet (GOOG).

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 *** 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 rising along with tech stocks.

Markets

Our very, very short-term early stock market indicator is ***.  Remember, today is a Friday, and short squeezes tend to occur on Fridays.  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 $2367, silver futures are at $28.61, and oil futures are at $79.53.

S&P 500 futures are trading at 5250 as of this writing.  S&P 500 futures resistance levels are 5256, 5400, and 5500 : support levels are 5210, 5020, 4918.

DJIA futures are up 81 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.

 

AI FAVORITE ARM EARNINGS SHOW CRACKS APPEARING IN ULTRA BULLISH AI STORY

May 9, 2024

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

Cracks In Ultra Bullish AI Story

Please click here for a chart of Arm stock (ARM).

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Note the following:

  • The Morning Capsule is about the big picture, not an individual stock. The chart of ARM stock is being used to illustrate the point.
  • ARM has been one of the top artificial intelligence favorites of the momo crowd.
  • ARM is a British semiconductor design firm that is mostly owned by Japanese company SoftBank (SFTBY).  ARM is known for licensing its designs for smartphone CPUs, such as those used in Apple’s iPhones.  Lately, ARM has been pivoting to artificial intelligence.
  • The chart shows the gap down after the release of this quarter’s earnings. This indicates another crack in the ultra bullish short-term AI story promoted by momo gurus.
  • The chart shows a gap up after last quarter earnings.
  • Here are the details of ARM earnings:
    • ARM reported Q4 (March) earnings of $0.36 vs. $0.30 consensus.
    • Revenues came at $928M vs. $866M consensus.
    • Revenues rose 46.6% year-over-year.
    • For Q1 (June), the company projects earnings of $0.32 – $0.36 vs. $0.31 consensus.
    • The company projects revenues of $875M – $925M vs. $866M consensus.
    • For FY25, the company projects earnings of $1.45 – $1.65 vs. $1.54 consensus.
    • The company sees revenues of $3.8B – $4.1B vs. $3.98B consensus.
    • Royalty revenue was $514M up 37% year-over-year.
  • The chart shows that from the peak after last quarter earnings to the recent low, ARM stock lost 47.8% of its value.
  • The Arora Report was one of the first to pick up on the AI theme back in 2022 allowing members of The Arora Report to buy artificial intelligence stocks near the lows before the run up started.  An example is members of The Arora Report buying Nvidia (NVDA) at an average price of $125.51 before the run up to over $974.
  • The drop in ARM stock again shows you how spot on The Arora Report guidance has been – a fortune is to be made in artificial intelligence all the way to 2030, but in the short-term exuberance is overdone.  At times, it will be treacherous – 47.8% drop in ARM stock from the peak proves the point.  You need to consistently follow a proven system with a long track record such as the ZYX Change Method.
  • ARM stock is falling for two reasons.
    • Whisper numbers had moved much higher above the consensus going into earnings.  Stocks move based on the difference between whisper numbers and the actual numbers.  Whisper numbers are the numbers that analysts privately share with their best clients.  Whisper numbers are often different from the numbers the same analysts publish.  Whisper numbers is a technique used by analysts to drum up business.  This is the reason that prudent investors do not depend on free data that floats around the internet and on the media.  Prudent investors know better, but unfortunately many individual investors do analysis based on the free data and then spend years trying to figure out why their analysis never works out.

ARM beat the consensus numbers for the prior quarter and raised numbers for the current quarter over the consensus. However, it did not help because whisper numbers were so much higher.

    • For FY25, ARM guidance, even though inline with the consensus numbers, is way below the whisper numbers.
  • On a separate note, in The Arora Report analysis Airbnb (ABNB) projections indicate that the consumer may be pulling back on summer travel.
  • Jobless claims came at 231K vs. 213K consensus.  This indicates that the job market is beginning to slow.
  • 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.

U.K.

Bank of England (BOE) left its key interest rate unchanged at 5.25%. BOE is expected to cut rates in June.

BOE Governor Andrew Bailey says that BOE may reduce interest rates faster than markets expect.   

In The Arora Report analysis, BOE moves will likely encourage Powell to do what he is itching to do irrespective of the data.

China

The Chinese economy appears to be rebounding.  Exports increased 1.5% year-over-year vs. 1.0% consensus.

Magnificent Seven Money Flows

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

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

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 *** 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 selling.

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 $2322, silver futures are at $27.94, and oil futures are at $79.59.

S&P 500 futures are trading at 5202 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 96 points.

 

DISNEY, UBER, STARBUCKS, AND MCDONALD’S SEND A POWERFUL SIGNAL TO INVESTORS BUT MOMO CROWD OBLIVIOUS

May 8, 2024

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

Consumer Pulling Back

Please click here for a chart of Disney stock (DIS).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of DIS is being used to illustrate the point.
  • The chart shows the drop in DIS stock on earnings.
  • Overall, Disney earnings were good.  The reason the stock was hit is because Disney projects operating income for its Experiences segment which consists of parks will show no growth in the June quarter vs. a consensus of 12% growth.   Theme parks are important for Disney as they account for 52% of its operating profit.
  • The Arora Report’s detailed analysis of Disney’s earnings and conference call indicates that the consumer is now resisting high park prices and is pulling back.
  • This morning, the stock of ride hailing and food delivery company Uber (UBER) is falling.  In The Arora Report analysis, the main reason behind the drop in UBER stock is that the consumer is pulling back.
  • On May 6, the big meat producer Tyson stock (TSN) fell after reporting earnings.  The Arora Report’s analysis of earnings show that the consumer is pulling back.
  • On April 30, Starbucks stock (SBUX) fell after reporting earnings.  In The Arora Report’s analysis of the earnings and conference call, the main reason behind SBUX earnings shortfall is that the consumer is pulling back.
  • On April 30, McDonald’s (MCD) reported earnings.  The earnings showed flat to declining trends.  In The Arora Report analysis, the reason is that the consumer is becoming price wary.
  • The foregoing is just a sampling.  The Arora Report analysis of earnings so far shows that the consumer pulling back is impacting a large number of companies.
  • Further, The Arora Report analysis shows that about 60% of consumers are pulling back, but the remaining 40% are still on a spending binge.
  • As a member of The Arora Report, none of the foregoing should surprise you – we have been sharing with you that liquidity of consumers at the low end was drying up.
  • The U.S. economy avoided a recession for two reasons:
    • Excessive consumer spending that was triggered by the free money from the government.  This factor is now abating.
    • Excessive fiscal spending by the U.S. government.  This spending continues.
  • The consumer pulling back impacts earnings.  However, in The Arora Report analysis, so far Wall Street analysts have not properly adjusted their earnings estimates.  By next quarter, they will need to adjust their estimates.  Prudent investors need to get ahead of upcoming reductions in earrings estimates.
  • It is important to remember that there are three other factors driving this stock market higher:
    • Exuberance over AI.  Yesterday we shared with you real examples of Nvidia (NVDA) and Palantir (PLTR).  For the first time, smart money is willing to take on the momo crowd.  In The Arora Report analysis, a fortune is to be made from artificial intelligence between now and 2030.  However, in the short term, the move up in many stocks is overdone.  Again, prudent investors need to look ahead and not just through the rearview mirror.
    • The Fed’s second blunder that has dramatically eased financial conditions.  Here, prudent investors need to carefully watch on an ongoing basis, as Powell appears to be itching to compound his blunder.  The thinking in some conservative circles is that Powell’s stance when the data does not justify it is to help with Biden’s reelection.  Trump has already stated that he will not reappoint Powell.  The Arora Report is politically neutral.  Our sole job is to help investors.  Having said that, it is important that investors do not let their politics get in the way of making money.
    • Reckless fiscal spending by the U.S. government.  The spending continues with no sign of abating.
  • The stock market always has crosscurrents.  Powell’s actions and fiscal spending will likely lead to more buying of stocks, even though other factors seem to be at the cusp of turning.
  • 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.
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Magnificent Seven Money Flows

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

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

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 *** in the early trade.

For longer-term, please see gold and silver ratings.

Oil

API crude inventories came at a build of 0.509M barrels vs. a consensus of a draw of 1.430M barrels.

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 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 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 $2322, silver futures are at $27.54, and oil futures are at $77.55.

S&P 500 futures are trading at 5193 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 52 points.

 

PAY ATTENTION TO NEW CHANGE IN ARTIFICIAL INTELLIGENCE STOCKS – NVIDIA AND PALANTIR

May 7, 2024

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

Artificial Intelligence Change You Need To Know

Please click here for a chart of Palantir stock (PLTR).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of PLTR stock is being used to illustrate the point.
  • One of the reasons behind the success of The Arora Report and its popularity among individual investors, investment advisors, and money managers is The Arora Report’s proven track record of identifying change early.  Those investors who identify a change early always come out ahead.  The premise behind the ZYX Change Method is that the most profits are generated with the lowest risk by successfully predicting change before the crowd.
  • The chart shows that PLTR, a popular artificial intelligence stock,  ran up going into earnings.
  • The chart shows that the move up yesterday was on heavy volume.  There is a large group of investors in the stock market that follow only traditional technical analysis and has no comprehension that traditional technical analysis no longer works as well as it used to.  Please click here to see the reasons.  In traditional technical analysis, volume means confirmation.
  • The chart shows that the move up yesterday was on high volume.
  • The buying yesterday was mostly by the momo crowd on hopium and by the followers of traditional technical analysis on volume confirmation.
  • The chart shows a big drop after earnings.  It is a reminder that earnings are always a risk event.  Results can be in either direction.  It is also important to know that the momo crowd always buys ahead of earnings on hopium.
  • PLTR reported great earnings.  Here are the details:
    • PLTR reported revenues of $634M vs. $615M consensus. The revenues are up 21% from a year ago.
    • The company reported adjusted operating income of $226M vs. $200M consensus.
    • PLTR was originally focused on government and defense business but is now increasingly capturing commercial business.
    • PLTR generated commercial revenue of $299M vs. $292M consensus.  This represents a 27% increase from the prior.
    • The government revenue came at $335M vs. $322M consensus.  This represents a growth of 16%.
    • The company is very upbeat, and commentary about the future is very positive.
    • The company is guiding full year revenue to $2.677B – $2.689B vs. the prior range of $2.652B – $2.668B.
  • PLTR stock is being hit for two reasons:
    • It is an expensive stock.  If it was not for the momo crowd,  the stock would have been trading much lower in the first place.  The drop in the stock shows that now at least some investors are paying attention to valuation and are willing to take on the momo crowd.
    • As good as earnings and projections are, there is deceleration in commercial business growth.  This shows that prudent investors who dig into the details of the hard numbers, especially growth, are willing to take advantage of the strength in AI stocks and sell.
  • The drop in PLTR stock represents for the first time a new change in how smart money is now willing to take on the momo crowd.  
  • Another important observation for prudent investors today is on Nvidia (NVDA).  Here again, just like Palantir, a change is underway.  This morning, there was an upgrade by a major Wall Street bank, but the stock is falling in the pre market.  The reason is that those in the know were buying yesterday on the hopes of selling today to the segment of the momo crowd that depends on free media.  This is the first time this commonplace phenomenon is coming to the premium AI stock – King Nvidia.  A famous investor who is part of smart money recently reduced his stake in NVDA stock.  Prudent investors need to remember that once the mania phase is over, the segment of the momo crowd that depends on free media often becomes the fodder for smarter players.
  • Among earnings of note, Disney stock (DIS) is falling on earnings.  Whisper numbers had ratcheted up going into earnings.  Earnings are good but are less than whisper numbers.  There will be a separate post on Disney with a buy zone, recommended quantity, and target zone.  There is also a trade around position in DIS.  The trade around position has been highly profitable and partial profits have been taken.  A trade around position is a technique used by billionaires and hedge funds that can significantly increase your profits and lower your risks.  Please see Trade Management Guidelines to learn more.
  • 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) and Alphabet (GOOG).

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

In the early trade, money flows are negative in  Meta (META), Nvidia (NVDA), Microsoft (MSFT), and 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 *** 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

Oil is volatile on conflicting reports from the Middle East.

The momo crowd is *** 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 range bound.

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 $2324, silver futures are at $27.58, and oil futures are at $77.91.

S&P 500 futures are trading at 5213 as of this writing.  S&P 500 futures resistance levels are 5256, 5400, and 5500: support levels are  5020, 4918, and 4852.

DJIA futures are up 57 points.

 

BUFFETT HOLDING RECORD CASH AND SELLS APPLE, HERE IS HOW MUCH CASH YOU SHOULD HOLD

May 6, 2024

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

Holding Cash

Please click here for a chart of Berkshire Hathaway stock (BRK.B).

Note the following:

  • The Morning Capsule is about the big picture, not an individual stock.  The chart of BRK.B stock is being used to illustrate the point.
  • The chart shows Warren Buffett’s company BRK.B broke out at the beginning of the year with the rest of the market.
  • The chart shows that BRK.B has been consolidating in the resistance zone
  • Buffett has made two important disclosures.
    • Buffett is now holding a record amount of cash, $189B.
    • Buffett reduced his Apple (AAPL) position by 22% to $135.4B as of March 31, 2024.  Buffett was holding $174.3B of AAPL stock at the end of 2023.  Buffett appears to have sold about 115M shares or about 13% of his AAPL holdings.
  • Buffett said, “Today things aren’t attractive.”  How much cash should you hold? The Arora Report provides this guidance every day in the protection band.  Please see the “Protection Band And What To Do Now” section below.
  • Buffett also said, “We’d love to spend it, but we won’t spend it unless we think they’re doing something that has very little risk and can make us a lot of money.”  This is, in part, also the secret behind The Arora Report’s success and popularity among individual investors, investment advisors, and money managers. The Arora Report teaches investors not to rush in and buy just because you have cash.  It is to your own benefit to wait for dips in the buy zones and to also not buy when market conditions are not favorable.
  • In The Arora Report analysis, Buffett chose not to do a major buyback of BRK.B stock because he knows that BRK.B stock, along with the rest of the stock market, is overvalued. 
  • Prudent investors should note the following:
    • Buffett sold a large amount of AAPL stock at a time when he was already holding record cash.
    • Buffett sold AAPL stock in spite of Berkshire having to pay tax on a gain of $11.2B.
    • Even though Buffett sold AAPL stock, he called Apple a better business than Coca-Cola (KO) and American Express (AXP).
    • Buffett praised Tim Cook as a great manager.
    • Buffett says Apple is a great business and Tim Cook is a great manager, but he sold a lot of Apple stock when he did not need cash.
    • Prudent investors should pay attention to what Buffett did, not what he said.  Think about it – if you were still holding a large amount of Apple stock, would you not say positive things about Apple to prop up AAPL stock?
    • Apple is the largest position in the ZYX Buy Model Portfolio.  Since the stock was bought at an average price of $4.68, there are large unrealized gains.
  • Prudent investors are waiting for remarks by several Fed speakers that are ahead.
  • The momo crowd is aggressively buying stocks in the early trade based on the weekend pump.
  • 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 Meta (META), Nvidia (NVDA), Microsoft (MSFT), and Tesla (TSLA).

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

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 *** 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 *** oil in the early trade.

As a full disclosure, there is a new signal to buy oil in ZYX Buy.

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) continues to see buying after Friday’s jobs report.

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 $2332, silver futures are at $27.51, and oil futures are at $78.73.

S&P 500 futures are trading at 5161 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 156 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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