A MUST SEE CHART FOR PRUDENT INVESTORS, TRUMP TO HELP TESLA DOMINATE, NVIDIA HEAT PROBLEM

By?Nigam Arora ?& Dr. Natasha Arora

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

The Trump Trade

Please click here for a chart comparing biotech ETF (XBI) to Dogecoin (DOGE.USD).

Note the following:

• The chart shows that biotech XBI has lost 5.35% since Trump’s election.? Companies in this ETF are producing innovative life saving drugs, employ brilliant scientists, own significant intellectual property, and are often bought out at large premiums.
• The chart shows that Dogecoin has gained 48.78% since Trump’s election.? Dogecoin was initially developed as a joke.? At one time, it was endorsed by Elon Musk; its name is the same as the acronym of Trump’s Department of Government Efficiency.? The main use of Dogecoin is speculation by the meme crowd.? Dogecoin has an active meme crowd community behind it.
• The contrast between the performance of XBI and Dogecoin shown on the chart is emblematic of, in large part, what investors are buying and selling in the wake of Trump’s re-election.
• On top of investors rushing into speculative assets, sentiment is extremely positive.? Historically, extremely positive sentiment is a contrary indicator.? In plain English, it means sell.? As we have previously stated, sentiment is not a precise timing indicator.
• In spite of all the warning signals, The Arora Report call remains to buy the dips.? There are two main reasons:
• -- There is an old saying on Wall Street that no one has ever been fired for losing clients’ money.? However, money managers get fired for lagging far behind their benchmarks.? No money manager, irrespective of his/her view of the market, wants to commit career suicide by not chasing the market at the year end. Bearish money managers who have missed out on this rally are likely to buy the dips and chase the stock market into the year end.
• -- Right now, hopium is at an extreme.? There is nothing in the way of hopium.? Since Trump is not yet president, there is no reality to confront hopium.? Right now, the momo crowd is buying based on the best case of all of the positives that may come out of Trump’s policies, and they are ignoring all of the negatives.
• The plan is to start taking profits on new buys before hopium meets reality between Christmas and Trump’s inauguration.?
• As a note of caution, this is not a call for wholesale buying.? This is a call to buy on the margin based on the protection band.??
• For those wanting next level information, listen to the podcast “OPPORTUNITIES FROM TRUMP HOPIUM: EIGHT INSIGHTS .”
• Trump’s transition team is starting the work to help those who helped Trump get elected.? An example is the Trump team wanting to change the rules around self-driving cars in the U.S. to help Tesla (TSLA).? Musk has been a big supporter of Trump.? Over a period of time, expect many such moves from Trump’s team.? As a full disclosure, The Arora Report gave a signal to buy TSLA after Trump’s win.? The trade has been nicely profitable.? The system has also triggered a signal for a trade around position in TSLA, but publication of the signal may be delayed because TSLA stock has gapped up significantly.
• Trump has appointed Chris Wright as the next Department of Energy Secretary.? Wright is the CEO of Liberty Energy (LBRT).? Liberty Energy is engaged in fracking. Wright is also on the board of smart modular reactor company Oklo (OKLO) that is backed by OpenAI founder Sam Altman.? Money is flowing into gas and nuclear stocks on Wright’s appointment.
• The most important event for the market this week is Nvidia (NVDA) earnings that will be released on Wednesday after the close.? This morning, NVDA is seeing aggressive selling because of a report of Blackwell chips heating up in data centers.
• In the early trade, retail investors are aggressively buying Trump stocks based on the weekend pump.? Professional investors are front running retail investors as they hope to sell at higher prices to retail investors later.
• 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. The protection band is one of the large number of unique edges that are available to members of The Arora Report.

See also ? SENTIMENT FROM TESLA EARNINGS COUNTERBALANCES RISING YIELDS, GOOD FOR NVIDIA

Magnificent Seven Money Flows

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

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

In the early trade, money flows are negative in 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 *** (To see the locked content, please take a 30 day free trial ) stocks in the early trade.? Smart money is *** in the early trade.

Note for new members: Smart money often sells into the strength generated by momo crowd buying and buys into the weakness generated by momo crowd selling.? Over a long period of time, investors come out ahead by adopting smart money’s ways.? The exception is in a raging bull market – for very short term trades, consider following the momo crowd and not smart money.

Very Very Short-Term Indicator

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.

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.

See also ? SHOCKING JOBS REPORT BUT PAY ATTENTION TO THE NUANCES – EXCUSE FOR A FED RATE CUT

For longer-term, please see oil ratings.

Bitcoin

Bitcoin (BTC.USD) is range bound.

Markets

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.

S&P 500 futures are trading at 5901? as of this writing.? S&P 500 futures resistance levels are 5926, 6017, and 6131: support levels are 5748, 5622, and 5500.

DJIA futures are down 33 points.

Gold futures are at $2608, silver futures are at $31.06, and oil futures are at $67.64.

Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror.? The proprietary protection band from The Arora Report is very popular.? The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding *** in cash, Treasury bills, short term fixed income, 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.

See also ? BUYING IN STOCKS ON INFLATION DATA, MUSK AND RAMASWAMY DOGE

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 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.

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