The Unthinkable Happened For Smart Crypto Bulls, Trump's Tariff Plan Hampers Stock Market Rally

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

New Tariffs

Please click here for an enlarged chart comparing gold ETF SPDR Gold Trust (GLD) to bitcoin ETF iShares Bitcoin Trust ETF ( IBIT).

Note the following:

• The chart shows gold has outperformed bitcoin in 2025 by 13.92%.
• The higher the volatility, the higher return prudent investors demand to compensate for higher volatility.
• The chart shows bitcoin has been very volatile.  In contrast, gold has had very low volatility – just a smooth rise.
• The chart proves that the unthinkable for smart crypto bulls has happened.  Smart crypto bulls had been basking in their glory that the Trump family, many cabinet members, many congressmen, and Wall Street had positioned themselves to heavily profit from cryptos.  There is no data that shows that the powerful people in the U.S. are positioned to profit from rising gold.  As a matter of fact, it appears that some on Wall Street have been shorting gold. If the foregoing was not enough, with hundreds of millions of dollars of campaign contributions, crypto bulls have convinced President Trump to set up a U.S. strategic bitcoin reserve.  Crypto bulls have been pushing for the U.S. government to sell its gold to finance a bitcoin buying spree.   In addition, both the meme crowd and momo crowd have been aggressively buying cryptos.
• The chart shows that in the face of the foregoing, gold has outperformed the biggest crypto, i.e. bitcoin.
• For gold to outperform bitcoin has been unthinkable for smart crypto bulls. Afterall, their argument has been that gold is useless and that is why the U.S. government should sell its gold and buy bitcoin.  
• Here is how the unthinkable has happened.
  • Foreign central banks, including those in China, India, Turkey, and Poland, have been buying gold.
  • Smart money is buying gold all across the globe.
• For those who want next level information on the very important subject of investing in bitcoin and gold, there are several podcasts available in Arora Ambassador Club. 
• The stock market's attempt to break above the micro resistance zone and to run up aggressively is being hampered by two statements from Trump:
  • Trump intends to impose 25% tariffs on autos, chips, and drugs starting in April.
  • Trump is blaming Ukraine for starting the Russia-Ukraine war.
• Trump's statement about Ukraine is beginning to bring the trust in Trump into question.
• FOMC minutes will be released at 2pm ET.  At The Arora Report, we will be reading the report to gain insights into the Fed's thinking.  The minutes may be market moving.

Housing

Housing is weakening.  Month-over-month single family housing starts dropped 8.4%.  In addition to the data, the latest earnings from luxury home builder Toll Brothers (TOL) are significantly below whisper numbers.  Here is the latest housing data:

• Housing starts came at 1.366M vs. 1.40M consensus.
• Building permits came at 1.483M vs. 1.45M consensus.

Magnificent Seven Money Flows

In the early trade, money flows are neutral in Apple Inc (AAPL), Alphabet Inc Class C (GOOG), Microsoft Corp (MSFT), NVIDIA Corp (NVDA), and Tesla Inc (TSLA).

In the early trade, money flows are negative in Amazon.com, Inc. (AMZN) and Meta Platforms Inc (META).

In the early trade, money flows are negative in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Bitcoin

Bitcoin is range bound.

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 a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. 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.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.