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.’
NONTRADITIONAL OPPORTUNITIES FOR INVESTORS FROM BIDEN PLAN, POSITIVE SEASONALS
To gain an edge, this is what you need to know today.
Nontraditional Opportunities
Please click here for a chart of Applied Materials (AMAT).
Note the following:
- The Morning Capsule is intended to give you the big picture. It is not about an individual stock or ETF. AMAT is being used to illustrate the point.
- The traditional definition of infrastructure is roads, bridges, sewers, airports, ports, etc.
- Yesterday, we gave you the breakdown of the $2.25 trillion that Biden plans to spend.
- You would have noticed that a majority of the spending is not on the traditional infrastructure.
- Assuming the bill is passed, investors need to look for opportunities in nontraditional areas.
- The plan intends to spend $50 billion for semiconductors.
- Silicon nationalism is now in full force where countries want to develop their own semiconductor capabilities in a significant departure from the present regime.
- Prime beneficiaries will be semiconductor manufacturing equipment stocks.
- AMAT is a major semiconductor manufacturing equipment stock.
- Over the years, we have written several times, ‘If you could buy one stock….’ Those calls have proven spot on. AMAT is in the Arora Model Portfolio in ZYX Buy. It is long from $16 and is trading at $137.20 in the premarket as of this writing. This represents a 757% gain.
- The chart shows the strong trendline.
- The chart shows a nice gain from the buy signal given for a Trade Around position on March 24.
- In addition to semiconductor equipment manufacturers, there are several other opportunities on the horizon. In due course, we will be providing you signals on these additional opportunities.
- As a note of caution, if you do not own AMAT or you are a newer subscriber, consider not rushing into buying AMAT right here. We are simply using AMAT to illustrate the point. The best action many private investors, investment advisors, and money managers alike can take is to attend the Bullet Proof seminar so as to be properly positioned to take advantage of opportunities in a systematic manner.
Positive Seasonality
From a seasonality point of view, April is a positive month. Out of the last 15 years, S&P 500 has closed higher in April in 14 of the 15 years. The average return has been 2.98%.
The Blind Money
It is the start of a new quarter. Blind money is rushing into Wall Street. Wall Street is front-running this money by aggressively buying tech and momo stocks.
Initial Claims
Initial Jobless Claims came at 719K vs. 696K consensus.
Jobs Report
Jobs Report will be released tomorrow morning.
Afternoon Capsule
The market is closed for the Good Friday holiday tomorrow. There will be no Afternoon Capsule today due to the holiday.
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 🔒.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
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 $1719, silver futures are at $24.46, and oil futures are $60.30.
S&P 500 futures resistance levels are 4000 and 4200: support levels are 3950, 3770 and 3630.
DJIA futures are up 60 points.
Protection Bands and What To Do Now?
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold existing positions. Based on individual risk preference, on dips, consider holding 🔒 in cash or treasury bills or short-term bond funds 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, 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.
ENTHUSIASM FOR THE MOST AMBITIOUS GOVERNMENT PLAN SINCE THE 1960S
To gain an edge, this is what you need to know today.
Biden Infrastructure Plan
Please click here for a chart of U. S. Steel (X ).
Note the following:
- Biden’s infrastructure plan is the most ambitious government plan since the 1960s.
- The Morning Capsule is about the big picture not about an individual stock.
- The chart of U. S. Steel illustrates the move in infrastructure stocks.
- The chart shows Arora’s buy signal on X. Buy signals have also been given on an Infrastructure Model Portfolio with 10 stocks in ZYX Buy. There is a new infrastructure ETF in ZYX Global.
- The chart shows that X has broken out and has a gain of 26% based on the price as of this writing in the premarket in four days since the Arora buy signal.
- Here are the details of the Biden plan.
- The plan has a price tag of $2.25 trillion.
- The plan will be financed by raising the corporate tax rate from 21% to 28%.
- There will be a minimum of 21% tax on global corporate earnings.
- The plan will be paid by this tax increase over 15 years.
- It is clear that at least in the initial years, there will be a deficit between the spending and the revenues. The deficit will be financed by more borrowing.
- The plan has four parts and will be executed over eight years.
- $620 billion will go to transportation.
- $650 billion will go to initiatives like clean water and broadband.
- $580 billion will go to enhancing manufacturing.
- $400 billion will go to the care of the elderly and disabled individuals.
ADP
ADP is the largest payroll processor in the U. S. It uses its data to give a glimpse of the employment picture ahead of the official jobs report that will be released on Friday at 8:30 am ET.
ADP employment change came at 517K vs. 525K consensus.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 momo stocks. Smart money is 🔒.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is🔒.
For longer-term, please see gold and silver ratings.
Oil
API data showed a build of crude inventories of 3.910M barrels vs. consensus of a build of 107K barrels.
The momo crowd is🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
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 $1686, silver futures are at $24.08, and oil futures are $60.26.
S&P 500 futures resistance levels are 4000 and 4200: support levels are 3860, 3770 and 3630.
DJIA futures are up 3 points.
LESSONS FROM ONE OF THE WORLD’S BIGGEST HIDDEN FORTUNES LOST IN FIVE DAYS
To gain an edge, this is what you need to know today.
Lessons From A Big Fortune Lost
Please click here for a chart of ViacomCBS (VIAC).
Note the following:
- The Morning Capsule is about the big picture and not about an individual stock. The chart of VIAC is being used to illustrate the point.
- Almost everyone is familiar with CBS, Paramount, Comedy Central, MTV, and Nickelodeon. These are all brands owned by VIAC.
- VIAC stock lost 60% of its value in five days.
- Many of the world’s greatest fortunes are hidden.
- Until a few days ago, most people had never heard of one of the world’s greatest hidden fortunes belonging to Bill Hwang.
- Most of the fortune appears to have been lost over five days.
- Here are the mistakes that Mr. Hwang made,
- It appears that his fortune was north of $10 billion.
- It appears that his portfolio was about $50 billion.
- His portfolio seemed to be concentrated in two areas – traditional media stocks and Chinese technology stocks.
- Here are the lessons to learn,
- Do not use excessive leverage.
- Do not be concentrated only in a couple of sectors.
- Among our newer subscribers, including many investment advisors and money managers, it appears portfolios are concentrated in two sectors – FAANG stocks and aggressive momo stocks. This is a serious mistake.
- For guidance, read Accelerating Wealth section in Trade Management Guidelines.
- For more guidance, take a look at the Model Portfolios in ZYX Buy, ZYX Global (Allocation) and ZYX Emerging.
- If you are not an aggressive investor, focus on the Model Portfolios.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 stocks in the early trade. Smart money is 🔒.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
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 $1683, silver futures are at $24.11, and oil futures are $60.14.
S&P 500 futures resistance levels are 3950, 4000 and 4200: support levels are 3860, 3770 and 3630.
DJIA futures are down 43 points.
A VICIOUS SHORT SQUEEZE AND LOSSES AT BANKS FROM THE FIRE SALES
To gain an edge, this is what you need to know today.
Vicious Short Squeeze And Fire Sale
Please click here for a chart of Nasdaq 100 ETF (QQQ).
Note the following:
- Friday three rare events happened simultaneously.
- The chart shows a vicious short squeeze going into the close. A short squeeze of this magnitude is rare. The short squeeze brought Nasdaq above the neckline.
- Prime brokers liquidated about $20 billion worth of stock when a family office Archegos could not meet the demands from the banks for additional collateral. Archegos appear to have built very large positions using leverage, perhaps as much as five to seven times. In certain stocks, Archegos had built as much as 15% of economic interest. The stocks that were sold in a fire sale include VIAC, AMCX, FOXA and DISC. The margin call appears to have been prompted due to price action from VIAC doing a secondary at $85. All of the stocks in this group are traditional media stocks that have had incredible runs from momo buying. The second group of stocks on a fire sale were Chinese stocks such as GSX, TME and VIPS. The trigger has been increased regulation in China.Two major banks, NMR and CS, have incurred major losses from the fire sale. There are rumors of losses at MS, GS and WFC.
- It is rare for the two foregoing events to happen simultaneously.
- This is a warning for investors who are holding large amounts of momo stocks. It is a good time to review your positions in momo stocks and also review the ‘Protection Bands and What To Do Now?’ below.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 stocks in the early trade. Smart money is🔒.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is🔒.
For longer-term, please see oil ratings.
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 slightly 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 $1723, silver futures are at $24.87, and oil futures are $61.13.
S&P 500 futures resistance levels are 3950, 4000 and 4200: support levels are 3860, 3770 and 3630.
DJIA futures are down 171 points.
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,
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