Amazon Debunks Rumor That Hurt Nvidia; Gold Hits $3500, Yen Hits 140; Stocks Bounce On India Talks

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

Safe Havens

Please click here for an enlarged chart of gold ETF SPDR Gold Trust GLD.

Note the following:

• The weekly chart shows the longer term big picture of the safe haven gold.
• The chart shows gold has gone parabolic. Gold hit a record $3500 before pulling back.
• Gold and Japanese yen are considered safe havens. Money is rushing into these safe havens. Yen hit the psychologically important level of 140. As full disclosure, there are positions in gold ETF (GLD) and yen ETF Invesco Currency Shares Japanese Yen Trust (FXY) in our ZYX Allocation Model Portfolios.
• Money is flowing into safe havens as foreign investors lose faith in the U.S. dollar. The dollar has been the reserve currency of the world, which is one of the reasons for the nation’s prosperity. It has allowed the U.S. to borrow and spend recklessly. The national debt stands at $36.7T, not including unfunded liabilities. Including unfunded liabilities such as social security and Medicare, the debt stands at over $1.34 million for every household in the U.S.
• Right now, the stock market is a prisoner of news on trade talks. In our analysis, stock market bulls are overly optimistic in their assertion that trade agreements will be reached very quickly. In our analysis, it is going to be a mixture of progress and delays.
• In our analysis, the stock market can significantly rally on trade deals.
• From this morning, there are two great examples illustrating the foregoing point.
  • Thailand Prime Minister Paetongtarn Shinawatra announced trade talks with Thailand, originally scheduled for April 23, have been delayed. A set of issues remains to be resolved.
  • Stock futures are reversing to buying in the early trade on positive news of "significant progress" in India trade talks. Vice President JD Vance met with India Prime Minister Narendra Modi. Vance said, "We believe a stronger India means greater economic prosperity, but also greater stability across the Indo- Pacific, which is, of course, a shared goal for all of us.
• In addition to studying ways to fire Fed Chair Powell, there are signals from the White House that President Trump is planning to undercut the Federal Reserve, bringing its legitimacy into question, if Powell does not cut interest rates. The Fed rate decision will be announced on May 7.
• A flurry of Fed speak is ahead today that may provide investors with insights. Vice Chair Philip Jefferson is speaking at 9am ET. Philadelphia Fed President Patrick Harker is speaking at 9:30am ET. Minneapolis Fed President Neel Kashkari is speaking at 1:40pm ET. Richmond Fed President Tom Barkin is speaking at 2:30pm ET. Governor Adriana Kugler is speaking at 6pm ET.
• Adding to the positive sentiment this morning is that Amazon.com, Inc. (AMZN) has debunked a rumor that hurt NVIDIA Corp (NVDA), Advanced Micro Devices, Inc. (AMD), Micron Technology Inc (MU), Broadcom Inc (AVGO), Marvell Technology Inc (MRVL), and other AI stocks yesterday. The rumor was that Amazon was pulling back on AI infrastructure. Amazon has denied the rumor.
• Tesla Inc (TSLA) earnings are ahead after the regular session close. Due to the popularity of TSLA stock with retail investors, moves in TSLA stock impact stock market sentiment.

Magnificent Seven Money Flows

In the early trade, money flows are positive in AMZN, NVDA, TSLA, Microsoft Corp (MSFT), Alphabet Inc Class C (GOOG), Meta Platforms Inc (META), and Apple Inc (AAPL).

In the early trade, money flows are positive 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 BTC/USD is seeing buying.

Arora Protection Band And What To Do Now

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