Important Data Ahead, Tesla Turning On Massive Nvidia Cluster, 10 Drugs Name For Price Cuts

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

Important Data Ahead

Please click here for a chart of Invesco QQQ Trust Series 1 QQQ.

Note the following:

• The chart shows that Nasdaq 100 has pulled back after touching the low band of the resistance zone.
• The chart shows that the stock market is consolidating around the downward sloping trendline.
• The chart shows that RSI is neither overbought nor oversold.
• In The Arora Report analysis, from a technical perspective, the stock market is positioned such that it is waiting for the new economic data that is ahead.
• Important data is ahead.
  • JOLTS - job openings data will be released at 10am ET.
  • Consumer confidence data will also be released at 10am ET.
  • ADP employment change will be released on Wednesday at 8:15am ET.
  • Thursday will bring initial jobless claims, GDP-second estimate, personal income and spending, and most importantly PCE prices. PCE is the Fed’s favorite inflation gauge.
  • On Friday, the mother of all numbers will be released – the jobs report.
• Medicare has released the list of 10 drugs that it is targeting for price reduction. All of the drug companies are expected to litigate. The impacted drug companies are Bristol-Myers Squibb Co BMY, Johnson & Johnson JNJ, Merck & Co Inc (NYSE: MRK), AstraZeneca plc (NASDAQ: AZN), Novartis AG NVS, Amgen, Inc. AMGN, AbbVie Inc ABBV, and Novo Nordisk A/S NVO.
• In The Arora Report analysis, the list of 10 drugs is mostly inline with expectations, and as such, do not expect it to impact the stocks of these companies in a major way. 
• Today, Tesla Inc TSLA is turning on a massive NVIDIA Corp NVDA cluster consisting of 10,000 H100 GPUs. The cluster will be used to train FSD (Full Self-Driving). Tesla is also spending $1B to build its own Dojo supercomputer.
• 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.

Shift

Many companies are pushing their employees to come to the office. A shift away from working at home is taking place. The latest is Amazon.com, Inc. AMZN CEO Andy Jassy warning remote workers, “It’s probably not going to work out for you.”  This has broader implications including on cities, office real estate, consumer spending, and travel.

Magnificent Seven Money Flows

In the early trade, money flows are negative in Amazon, Tesla, Nvidia, Microsoft Corp MSFT, Alphabet Inc Class C GOOG, Meta Platforms Inc META, and Apple Inc AAPL.

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

Momo Crowd And Smart Money In Stocks

The momo crowd is buying stocks in the early trade. Smart money is 🔒 in the early trade. To see the locked content, please click here to start a free trial.

Gold

There is a serious attempt underway to persuade retail investors to buy silver.  

The momo crowd is buying gold in the early trade. Smart money is 🔒 in the early trade.

For longer-term, please see gold and silver ratings.

The most popular ETF for gold is SPDR Gold Trust GLD. The most popular ETF for silver is iShares Silver Trust SLV. 

Oil

The momo crowd is buying oil in the early trade. Smart money is 🔒 in the early trade.

For longer-term, please see oil ratings.

The most popular ETF for oil is United States Oil ETF USO.

Bitcoin

Bitcoin BTC/USD is just below $26,000 as the trading volume is drying up.

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.

Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror.

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding 🔒 in cash or Treasury bills 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.

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 2008 financial crash, the start of a mega bull market in 2009, the COVID crash, the post-COVID bull market, and the 2022 bear market.  Please click here to sign up for a free forever Generate Wealth Newsletter.