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.’
NOISY JOBS REPORT TEMPORARILY DASHES BULLS HOPIUM, AMAZON GUIDANCE DISAPPOINTS, INDIA CUTS RATE
To gain an edge, this is what you need to know today.
Noisy Jobs Report
Please click here for a chart of / S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
- The chart shows that the stock market is in the micro resistance zone.
- Bulls were certain that the jobs report this morning would trigger a breakout of the stock market above the micro resistance zone.? Bulls were hoping for weaker jobs data that would allow the Fed to cut interest rates in March.? Bulls got their wish in the headline, but overall the jobs report is very noisy.? As a result, as of this writing, the stock market is still in the resistance zone.
- Here are the details of the jobs report:
- -- The most notable point from the jobs report is that the prior nonfarm payrolls have been revised from 256K to 307K.? This is a huge increase.
- -- Nonfarm payrolls came at 143K vs. 155K consensus.? This is a weaker number.
- -- Nonfarm private payrolls came at? 111K vs. 163K consensus.
- -- Average hourly earnings came at 0.5% vs. 0.3% consensus.
- -- Average work week came at 34.1 hours vs. 34.3 hours consensus.? This number is important as it shows people are working less.
- -- Unemployment rate came at 4.0% vs. 4.1% consensus.? This is a stronger number.
- In The Arora Report analysis, overall the data in this jobs report is too strong for the Fed to have a logical reason to cut interest rates.? Of course, the Fed does not always move in a logical fashion.? The Fed often does what it wants to do and then finds justification.
- Amazon (AMZN) reported strong earnings but guidance disappointed.? Amazon is guiding Q1 revenue of $151B – $155B vs. $158.33B consensus.? In The Arora Report analysis, cloud growth rate is also likely to slow at Amazon AWS even though Amazon plans a CapEx of $100B.? Further, in our analysis, Amazon CapEx plans indicate that Amazon is not concerned about DeepSeek.? Members of The Arora Report have very nice gains on AMZN stock.? The buy zone is in the ZYX Buy Model Portfolio.
- University of Michigan consumer sentiment will be released today at 10am ET and maybe market moving.
- 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.
India
For the long term investor, India represents one of the best opportunities.
The Reserve Bank of India cut interest rates by 25 bps by unanimous vote in an effort to spur the economy.? This is the first interest rate cut in about five years.? GDP growth is projected to come at 6.7%.
ZYX Emerging has covered India continuously for 18 years.? There are three India ETFs in the ZYX Emerging Model Portfolio.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Microsoft (MSFT), Meta (META), and Nvidia (NVDA).
In the early trade, money flows are neutral in Alphabet (GOOG).
In the early trade, money flows are negative in AMZN, Apple (AAPL), 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 *** (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.
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.
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 6105 as of this writing.? S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are up 36 points.
Gold futures are at $2883, silver futures are at $32.64, and oil futures are at $71.08.
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.
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.
TRUMP FOCUSED ON 10-YEAR YIELD AND NOT THE FED, SLOWER AI GROWTH FEARS ON ARM EARNINGS
To gain an edge, this is what you need to know today.
10 Year In Focus
Please click here for a chart of 20+ year Treasury bond ETF (TLT).
- The chart shows TLT had previously touched the top band of the support zone.
- The chart shows yesterday TLT broke out above the top band of the support zone.? TLT took a leg up for two main reasons:
- -- Treasury Secretary Scott Bessent said that Trump wants to focus on the 10-year yield to reduce borrowing costs instead of the Fed’s short term benchmark.
- -- The details of the Treasury funding.? In yesterday’s Morning Capsule, we wrote:
In an important development, the Treasury announced? $125B of securities, from 3 year to 30 year, to refund approximately $106B Treasuries maturing on February 15.? So far, the stock market likes this development, and there is aggressive buying on this news.
- Rallying bonds means lower yields.? Rallying bonds are also a positive for the stock market.
- Initial jobless claims came at 219K vs. 213K consensus.? This data adds to the murky jobs picture.? The official jobs report will be released tomorrow at 8:30am ET.? The official jobs report may bring clarity to the murky jobs picture and the data may be market moving.
- Arm (ARM) is a British company.? Its processor design is used in over 90% of smartphones, including iPhones.? In The Arora Report analysis, ARM stock is one of the bigger beneficiaries of the future AI move to the edge.? Arm is guiding $0.48 – $0.56 vs. $0.52 consensus, but whisper numbers have been much higher.? ARM stock is falling on guidance below whisper numbers. In The Arora Report analysis, Arm guidance is raising a concern that the growth of AI to the edge may be slower than the market currently expects.? However, Wall Street firms are coming to Arm’s defense and raising targets on ARM stock.
- Qualcomm (QCOM) earnings and guidance are better than the consensus and whisper numbers.? However, the stock is under pressure on slowing smartphone growth.? As the stock market is focused on slowing smartphone growth, in The Arora Report analysis, investors should look forward as Qualcomm will be a major beneficiary of AI’s move to the edge.? Consider initiating a position in QCOM if it falls in the buy zone.? The buy zone is in the ZYX Buy Model Portfolio.? Long time members of The Arora Report have very large gains in QCOM stock.
- The reaction to earnings from Arm and Qualcomm demonstrate crosscurrents.? As a member of The Arora Report, you have an advantage as The Arora Report is one of the rare resources that has a long track record of helping investors successfully navigate crosscurrents.
- Dependence on Apple (AAPL) has its perils.? Skyworks Solutions (SWKS) has been a main supplier of RF components to Apple.? SWKS stock is falling 28% on the news that Apple is going to shift some of its business to another vendor.? In The Arora Report analysis, the other vendor is likely Broadcom (AVGO).? There is a sympathy short trade on this news in Qorvo (QRVO).? It is too late to short SWKS.? The QRVO signal is in ZYX Short.
- Several food stocks have been under pressure, especially hard hit have been those impacted by rising prices of cocoa.? This morning, sentiment is lifting on these stocks as chocolate maker Hershey (HSY) beat earnings.
- Eli Lilly (LLY) has been the best performing pharmaceutical stock due to the popularity of its weight loss drugs.? LLY beat the consensus and whisper numbers and provided a very positive update on the pipeline. ? In the early trade, LLY stock is volatile in the premarket, having traded at low as $812.18 and as high as $875.? Prudent investors need to note that the wide range in a very short time seen in LLY stock this morning is becoming typical in many many stocks.? As a practical tip, in this market it is imperative to scale in and scale out.? Details of how to appropriately scale in and scale out are provided in the Trade Management Guidelines.? The buy zone for LLY is in the ZYX Buy Model Portfolio.? Members of The Arora Report have very large gains in LLY stock.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Amazon (AMZN), Meta (META), and Nvidia (NVDA).
In the early trade, money flows are neutral in Microsoft (MSFT).
In the early trade, money flows are negative in AAPL, Alphabet (GOOG), 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.
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.
For longer-term, please see oil ratings.
Bitcoin
Bitcoin (BTC.USD) is range bound.
Markets
Interest rates and bonds are 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.
S&P 500 futures are trading at 6102 as of this writing.? S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are up 94 points.
Gold futures are at $2879, silver futures are at $32.51, and oil futures are at $71.73.
AMD CHART HIGHLY INSTRUCTIVE FOR INVESTORS, GOOGLE’S AI MONETIZATION, APPLE NOT IMMUNE IN CHINA
To gain an edge, this is what you need to know today.
Instructive Chart
Please click here for a chart of Advanced Micro Devices stock (AMD).? Note the following:
- The Morning Capsule is about the big picture, not an individual stock.? The chart of AMD is being used to illustrate the point.
- The AMD chart is highly instructive for investors.? The chart shows that from late 2023 to early 2024, the momo crowd was running up AMD stock, causing it to more than double.
- We previously shared with you that AMD was not suitable for investing, but AMD was suitable for trading and have given signals as such.
- The chart shows that AMD stock has dropped grudgingly from a high of $227.30 to $107.67 as of this writing in the premarket.
- Prudent investors should note from the chart how fast the move up was in AMD stock and how slow the move down has been.? The move up was so fast because the momo crowd could not differentiate between AMD and Nvidia (NVDA). To the momo crowd, Advanced Micro Devices made GPUs and so did Nvidia.? This was the extent of the momo crowd’s analysis.
- Since the momo crowd does not do much analysis, the momo crowd never understood that there were major differentiators between Advanced Micro Devices and Nvidia.
- -- Nvidia’s chips were way more advanced than Advanced Micro Devices’ chips for AI applications.
- -- The biggest demand for GPUs was coming from large language model training.? The capabilities needed were in Nvidia’s chips, not in Advanced Micro Devices’ chips.
- -- Nvidia had developed a strong software moat, and Advanced Micro Devices was far behind in software.
- The momo crowd has continued to aggressively buy AMD stock during the entire period the stock has been moving downward.? ? The anecdotal evidence is that for many in the momo crowd, AMD stock is over 50% of their portfolio.? The momo crowd never did a deep analysis as the momo crowd suffers from confirmation bias.? The momo crowd resonates only with what supports its view point and ignores everything else.
- The chart shows volume was high yesterday prior to the report of earnings.? The reason for the high volume was the momo crowd was aggressively buying AMD stock with conviction ahead of earnings.
- The chart shows AMD stock took another leg down after reporting earnings yesterday after hours.
- Based on the historical precedence of the momo crowd’s behavior, at some point in the future, the momo crowd will panic and sell AMD stock.? At that time, The Arora Report is likely to give a buy signal to take advantage of the dip caused by the momo crowd panicking.
- Here are the important takeaways for investors from the AMD chart.Just like AMD stock ran up without proper analysis, many popular stocks have run up way above reason.? The prices of these stocks are totally divorced from reality.? Examples include quantum computing stocks such as ARQQ, IONQ, LAES, QBTS, QUBT, RGTI, and WKEY.Investors need to differentiate between investing and trading.? For example, right now, it is appropriate to only trade quantum stocks but due to quantum computing stocks being divorced from reality, they are not appropriate for investing at this time.? At The Arora Report, we will be giving buy signals for investing in quantum stocks when the momo crowd panics and sells them.Next time you experience FOMO, remember this chart of AMD stock.
- In the early trade, tech stocks are seeing selling on earnings from Advanced Micro Devices and Alphabet.? Investors are beginning to realize Google has an AI monetization problem.? Earnings show that Google Cloud growth is slower than expected, but Google is ramping up CapEx over $20B more than expected.
- Wall Street had continued to believe that Apple (AAPL) was immune from any government action in China.? To the contrary, The Arora Report has been warning you that there is a China risk in Apple. After Trump imposed tariffs on China, the Chinese government is starting the process of a potential investigation of how Apple charges app developers.
- In an important development, the Treasury announced? $125B of securities, from 3 year to 30 year, to refund approximately $106B Treasuries maturing on February 15.? So far, the stock market likes this development, and there is aggressive buying on this news.
- Factory orders came at -0.9% vs. -0.3% consensus, indicating manufacturing is slowing.
- There is conflicting data on the jobs picture.
- -- JOLTS report came at 7.6M vs. 8.156M prior.
- -- ADP is the largest payroll processor in the country and uses its data to give an advanced glimpse of the jobs picture ahead of the official jobs report.? ADP payrolls came at 183K vs. 155K consensus.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in Nvidia (NVDA).
In the early trade, money flows are negative in Amazon (AMZN), 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.
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
April gold futures briefly crossed over $2900, the highest level ever.? A new trade around position in gold was recently started in ZYX Allocation.??
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 5.025M barrels vs. a consensus of a build of 3.17M 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 range bound.
Markets
Interest rates are ticking? down, and bonds are ticking up.
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 6044 as of this writing.? S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are up 10 points.
Gold futures are at $2881, silver futures are at $32.69, and oil futures are at $71.97.
CHINA RETALIATES WITH TARIFFS ON U.S. – OIL DROPS ON GROWTH CONCERNS, PALANTIR HELPS SENTIMENT
To gain an edge, this is what you need to know today.
Retaliatory Tariffs
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
- The chart shows that the stock market opened significantly lower yesterday on Trump imposing tariffs on Canada and Mexico.
- The chart shows that the stock market rallied after Trump delayed tariffs on Canada and Mexico for one month.
- Sentiment in the stock market had dropped in the morning to bearish from extremely positive most of the last week.? However, sentiment quickly reverted back to extremely positive after Trump delayed tariffs.
- The chart shows that the rally this morning is being stalled on China imposing retaliatory tariffs on the U.S.
- China is retaliating by imposing tariffs on American goods.? Here are the immediate results of Chinese tariffs:
- -- Oil is falling on concerns about global growth.
- -- Stocks in Asia gave up some of their gains.
- -- Speculative sentiment is pulling back, at least temporarily.
- Among other notable actions, China is opening an anti-monopoly investigation against Google (GOOG, GOOGL).? China is also declaring apparel company PVH (PVH) and gene sequencing company Illumina (ILMN) as unreliable entities.? Prudent investors should note that China blocked Google search in 2010.? Gmail and YouTube are also blocked in China.? However, the Android operating system is widely used in China.? In The Arora Report analysis, here is the question prudent investors need to ask themselves: Why did China retaliate against Google, which does not do much business in China, and small companies like PVH and ILMN instead of going after highly visible American companies that do a lot of business in China such as Apple (AAPL) and Tesla (TSLA)? ?In The Arora Report analysis, the reason is that China is showing restraint and wants to de-escalate.? At least for the time being, this is positive for the stock market.
- Right now the consensus is that Trump will back off from China tariffs just like he did with Canada and Mexico.? However, prudent investors should keep in mind that unlike Mexico and Canada, China has ambitions to replace the U.S. as the major superpower.? As such, events can quickly and unexpectedly take a big negative turn causing stock prices, oil prices, and global growth to fall.? The Arora Report has a short position in oil that is nicely profitable.? For members of The Arora Report, this scenario is already taken into account in the protection band.
- There are always crosscurrents.? On the positive side, sentiment in AI software stocks is moving up due to the move up in Palantir (PLTR) stock.? PLTR stock is long from $20.15.? This represents a gain of 417% as of this writing in the premarket for members of The Arora Report.? PLTR is in the ZYX Buy Core Model Portfolio.? There will be a new post on the core PLTR position with a new buy zone and new target zone.? There is also a signal for a trade around position in PLTR.? A trade around position is a technique used by billionaires and hedge funds to increase returns and reduce risks.? Investors need to look ahead.? PLTR is likely to experience a windfall from Elon Musk’s DOGE.
- JOLTS job openings will be reported at 10am ET and may be market moving.
- 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.
Magnificent Seven Money Flows
In the early trade, money flows are positive in GOOG, TSLA, Amazon (AMZN), Meta (META), and Microsoft (MSFT).
In the early trade, money flows are neutral in Nvidia (NVDA).
In the early trade, money flows are negative in 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 *** 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.
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.
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 6023 as of this writing.? S&P 500 futures resistance levels are 6131, 6256, and 6500: support levels are 6017, 5926, and 5748.
DJIA futures are down 6 points.
Gold futures are at $2859, silver futures are at $32.55, and oil futures are at $71.21.
WHAT TO DO NOW IN THE AFTERMATH OF TARIFFS – WALL STREET CAUGHT ON THE WRONG SIDE
To gain an edge, this is what you need to know today.
What To Do Now
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark stock market index S&P 500 (SPX).
- The chart shows that in the early trade the stock market is below the micro resistance zone in the aftermath of the tariffs.
- The chart shows the stock market is still significantly above the 200 day moving average.? The 200 day moving average coincides with the support zone shown on the chart.
- Stock futures have improved from where they were trading on Sunday evening.
- President Trump’s executive orders on tariffs were issued on Friday.
- Going into Friday, Wall Street did not believe that Trump would actually impose tariffs, even though Trump had been very clearly saying for the last week that tariffs would go into effect on February 1.? The consensus on Wall Street was that it was simply a negotiating tactic.
- On Friday, when Trump issued an executive order imposing tariffs, at first, Wall Street was taken aback with surprise.? Then, a story was promoted that Trump was about to rescind the tariffs.? The story received so much publicity that the White House was forced to specifically state that the story was wrong.
- After the White House denied the story, the stock market started falling.? Momo gurus were able to arrest the fall by claiming it was going to be just like the tariffs Trump imposed on Columbia.? As we previously shared with you, the tariffs on Columbia were lifted very quickly.
- Wall Street was in shock when the tariffs were still in place on Sunday evening.? This led to a big drop in stock futures.
- In The Arora Report analysis, investors need to pay attention to the details in the executive order.? The executive order appears to be focused on drug flow into the U.S.
- -- Our latest information is that Mexico is open to cooperating with the U.S. on drugs.? It is conceivable that Trump and Mexico can reach an agreement related to drugs fairly quickly, which would likely result in the tariffs on Mexico being lifted.
- -- Our latest information is that Canada is resisting full cooperation with the U.S. on drugs.? The reason is that a wave of economic patriotism is sweeping Canada.? Canadian politicians are mischaracterizing Trump’s executive order as a trade war.
- Here are the other long term objectives Trump has from the tariffs:
- -- Reduce the trade deficit.
- -- Bring manufacturing to the U.S.
- -- Bring foreign capital to the U.S.
- -- Use money from tariffs to pay for income tax cuts.
- Here are the two main questions that will determine the course of the tariffs, and in turn, the course of the stock market.
- -- Will Trump stick with the executive order, or will he start mingling longer term objectives with the current executive orders?
- -- Will Canada and Mexico cooperate, or will they retaliate?
- In The Arora Report analysis, on the positive side, tariffs on China are less than expected.
- In The Arora Report analysis, the situation is very fluid, and the best course of action is to keep a close eye on which way it goes.
- At The Arora Report, we have been helping you look ahead.? Our call was to take profits ahead of Trump’s inauguration.? We repeated several times that once reality met hopium, the situation would change.? In contrast, Wall Street largely did not take profits and clung to hopium.
- Cash levels are low.
- -- A vast majority of money managers are at the lowest cash level in years.
- -- The momo crowd has invested more than 100% by taking margin.
- In contrast to the momo crowd and Wall Street, the protection band from The Arora Report looked ahead and took into account the volatility that was going to come when Trump started implementing his agenda.? As such, there is no change in the protection band.? However, investors need to stay alert – changes will be made to the protection band as new data comes in.??
- To help investors think, if Trump had rescinded tariffs over the weekend, the stock market would have been up over 1000 DJIA points this morning.? As a reference, DJIA futures are down 638 as of this writing in the premarket because Wall Street got it wrong.
- Both Wall Street and the momo crowd have great reasons to be concerned because they are prepared for only one scenario – the stock market going straight up to S&P 500 levels of 6500 – 7000.???
- Expect blind money to flow into the stock market today and tomorrow.? Blind money is the money that flows into the stock market on the first two days of the month without any analysis irrespective of market conditions.
- 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.
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 *** 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 *** gold in the early trade.
For longer-term, please see gold and silver ratings.
Oil
Oil is spiking for two reasons:
- Tariffs on Canadian oil.? Prudent investors should not that tariffs on oil are only 10%, not 25%.
- Rumors of potential Trump sanctions of Venezuelan 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.? Those who are still under the illusion that bitcoin is a hedge are disappointed.? The price action in bitcoin once again shows The Arora Report’s consistent call is spot on that bitcoin is not a hedge, but instead a speculative asset that is manipulated higher during risk-on periods.??
Markets
Interest rates are ticking down, and bonds are ticking up.
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 5969 as of this writing.? S&P 500 futures resistance levels are 6017, 6131, and 6256: support levels are 5926, 5748, and 5622.
DJIA futures are down 638 points.
Gold futures are at $2850, silver futures are at $32.30, and oil futures are at $74.42.
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