|
|
发表于 2025-10-7 11:29 AM
|
显示全部楼层
Foreigners are beginning to prefer holding gold over holding dollars. In our analysis, if this trend continues, it is a big negative for the U.S.
Concern is developing among smart money about the implications of persistent, aggressive buying in gold. The traditional interpretation is that something is about to go very wrong with the U.S. stock market and the AI trade.
In our analysis, the traditional interpretation is not applicable here for several reasons:
Those who have a long term track record in gold are not buying right here.
Demand for physical gold is weak.
Buying in gold is mostly coming from the momo crowd. The momo crowd is not doing any analysis before buying gold. They are buying gold because it is going up.
We are long gold from about $1000.
As full disclosure, our plan is to issue signals to buy more gold on significant pullbacks.
The sentiment in gold is extremely positive. For prudent investors, buying gold when sentiment is extremely positive is a high risk proposition.
The volatility index VIX was created in 1990. Normally, VIX goes down when S&P 500 goes up. For the first time since the creation of VIX, VIX has risen over five consecutive days while S&P 500 has also gained over the five day period. This signal has never happened before, so there is no historical precedent. In our analysis, the interpretation is that the reason VIX has not fallen is that smart money is using VIX derivatives to hedge as the stock market rises.
Prudent investors also need to know that as the stock market rises and the momo crowd becomes more aggressive in buying, smart money continues to take advantage of the strength to trim positions.
A Tesla Inc (NASDAQ:TSLA) event is ahead. Expectations are for a lower cost Model Y, but rumors are running rampant of Tesla getting into the eVOL business. These rumors have resulted in aggressive momo crowd buying in Joby Aviation Inc (NYSE:JOBY) and Archer Aviation Inc (NYSE:ACHR). As full disclosure, JOBY is in our portfolio.
Magnificent Seven Money Flows
Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, to get ahead and get an edge, investors need to dig below the surface of the Mag 7 stocks. It is equally important to rise above the noise of daily news on the Mag 7 stocks. The best way to get an edge, dig below the surface, and rise above the noise of the daily news is to pay attention to early money flows in the Mag 7 stocks on a daily basis. When there is significant news in the Mag 7 stocks that rises above the threshold of noise and impacts your entire portfolio, it is covered in the main section above.
In the early trade, money flows are positive in Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), and NVIDIA Corp (NASDAQ:NVDA).
In the early trade, money flows are neutral in Apple Inc (NASDAQ:AAPL) and Microsoft Corp (NASDAQ:MSFT).
In the early trade, money flows are negative in Alphabet Inc Class C (NASDAQ:GOOG) and Tesla (TSLA).
In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ QQ).
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 (CRYPTO: BTC) is seeing buying.
What To Do Now
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.
|
|
狗仔卡
