To get a head start, here's what you need to know today.

Nvidia could be next

Please click here for an enlarged table Taiwan Semiconductor Mfg. Co. Ltd. TSM.

Note the following:

• This article is about the bigger picture, not a single stock. The chart of the TSM share is used to illustrate this.
• TSM is the world's largest semiconductor foundry for advanced semiconductors. TSM makes chips for companies NVIDIA Corp NVDA And Apple Inc AAPL.
• The chart shows the support/resistance zone. This was previously the resistance zone.
• The chart shows that TSM made a breakthrough in early trading after the earnings release. If the breakout continues, this zone will become the support zone.
• The RSI on the chart shows that the stock still has room to rise.
• As for earnings, the rumors for TSM were slowly rising above consensus. Whisper numbers are numbers that analysts provide privately to their best clients. Whisper numbers often differ from the numbers the same analysts publish to the public. Stocks move based on the difference between the whisper numbers and the reported numbers. TSM reported numbers that were better than the whisper numbers.
• Here's the most important question for prudent investors: How do you make ASML Holding NV (NASDAQ: ASML Earnings (see yesterday's Morning Capsule) with TSM Earnings? The answer is that TSM is more focused on AI, including Nvidia. This is why the Arora report has previously signaled aggressive investors for a trade-around position change in NVDA stock. The trade around position is separate and distinct from the core NVDA position, which is long from $12.55.
• The consumer treats himself to his money again after a short decline. Prudent investors pay attention to consumers because the U.S. economy is 70% consumer-based. Find the latest retail sales here.
  • Total retail sales were 0.4% versus a consensus of -0.2%.
  • Non-auto retail sales were 0.5% versus consensus of 0.1%.
• Initial jobless claims were 241,000 versus a consensus of 270,000.
• Bonds fall on strong economic data.
• The retail sales and jobless claims data add to other data showing that the Fed's rate cut delivered an additional blow with the 50 basis point rate cut.
  • Before the Fed cut rates, we told you in the Arora Report analysis that the data justified a 25 basis point rate cut. The latest data shows that the call for the Arora report was spot on, as were almost all of Arora's calls regarding the Fed and the economy over the past 17 years.
• The Fed's job is to maintain stability, not to exacerbate the blow. In fact, the Fed's job is to take away the punch bowl.
• In the Arora Report's analysis, the reason the stock market has not yet experienced the usual seasonal downturn in September and October is because the Fed has increased despite the hard data.
• Notable Earnings: Elevance Health Inc ELVone of Blue Cross Blue Shield's largest licensees, reported worse-than-expected profits. The stock is down about 15% premarket as of this writing. As a reminder: it used to be the largest health insurer in the country UnitedHealth Group Inc UNH also reported rising medical costs.

Magnificent seven flows of money

In early trading, money flows are positive Amazon.com, Inc. AMZNNvidia (NVDA), Microsoft Corp MSFT, Meta Platforms Inc META, Tesla Inc TSLAand Apple (AAPL).

In early trading, money flows are neutral Alphabet Inc. Class C GOOG.

In early trading, money flows are positive 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 advantage by knowing the money flows in SPY and QQQ. Investors can gain a greater advantage 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 silver ETF is iShares Silver Trust SLV. The most popular ETF for oil is United States oil ETF USO.

Bitcoin

Bitcoin relies on optimism that Trump will be elected.

Protective tape and what to do now

It's important for investors to look forward and not in the rearview mirror.

Consider continuing to hold good, very long-term existing positions. Depending on your individual risk preference, consider a protective 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 while participating in the uptrend.

You can determine your protection limits by adding cash to protections. The high protection range is suitable for older or conservative people. The low guard band is suitable for younger or aggressive people. If you do not hedge, the total cash balance should be higher than stated above, but significantly lower than cash plus hedges.

A 0% protection band would be very bullish and would mean a full investment at 0% in cash. A 100% protection band would be very pessimistic and would indicate the need for aggressive cash hedging and hedges or aggressive short selling.

It is worth remembering that if you do not have enough cash, you will not be able to take advantage of new opportunities. When adjusting hedging levels, consider adjusting partial stop levels for equity (non-ETF) positions; Consider introducing wider stops on remaining volumes and creating more headroom for high beta stocks. High beta stocks are those that move more than the market.

Traditional 60/40 portfolio

The inflation-adjusted probability-based risk return does not currently support a strategic bond allocation with a long duration.

Those who want to stick with the traditional allocation of 60% stocks and 40% bonds might consider focusing only on high-quality bonds and bonds with maturities of five years or less. Those looking to refine their investments might consider using bond ETFs as tactical rather than strategic positions at this time.

The Arora Report is known for its precise statements. The Arora report rightly called the big artificial intelligence rally before all others, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus decline in 2020, the DJIA -Rally to 30,000 when the price was at 16,000, the start of a mega bull market in 2009 and the financial crash of 2008. Please click here to register for free forever Create a wealth newsletter.

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