AI, Quantum, And Robotics in Focus – All Eyes On Nvidia CEO Keynote

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

All Eyes On Nvidia

An enlarged chart of NVIDIA Corp NVDA.

Note the following:

• This article is about the big picture, not an individual stock.  The chart of NVDA stock is being used to illustrate the point.
• The chart shows that NVDA stock ran up on Friday in advance of the Consumer Electronics Shows (CES).
• The chart shows that in the early trade NVDA stock is further gaining.
• The chart shows NVDA stock is at the low band of the resistance zone.
• CES kicks off with a keynote address from Nvidia's CEO Jensen Huang today at 6:30pm PST.
• Huang is usually positive about the future of Nvidia in his speeches.  NVDA stock is running up in anticipation of Huang's keynote address. Prudent investors should pay attention to what Huang says and how he says, as it will likely be market moving.
• There is also anticipation around the possible presentation of Nvidia's next gen chip Rubin.
• The themes for CES 2025 are artificial intelligence, quantum computing, and robotics.
• The momo crowd is aggressively buying.  They are focused on AI stocks.
• Adding to the buzz around AI today is positive earnings from Foxconn.  Foxconn is a supplier for both Apple Inc AAPL and Nvidia.  Stocks of NVDA, ASML Holding NV ASML, Taiwan Semiconductor Mfg. Co. Ltd. TSM, Applied Materials Inc AMAT, Super Micro Computer Inc SMCI, Dell Technologies Inc DELL, Vertiv Holdings Co VRT, Micron Technology Inc MU, SK Hynix (HXSCL, HXSCF), Infineon Technologies AG IFNNY, and STMicroelectronics NV STM are moving up Foxconn earnings.
• The stock market is also excited about Microsoft Corp MSFT decision to spend $80B on AI data centers in 2025.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Amazon.com, Inc., NVDA, MSFT, Alphabet Inc Class C, Meta Platforms Inc, Tesla Inc, and AAPL.

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

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.  The most popular ETF for silver is iShares Silver Trust.  The most popular ETF for oil is United States Oil ETF.

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.