Important Tell For Stock Market

Please click here for an enlarged chart of Direxion Daily Semiconductor Bull 3X ETF (NYSE:SOXL).

Note the following:

  • SOXL continues to be a tell for the entire stock market because semiconductors are the leading sector and super aggressive investors are focused on SOXL.
  • The chart shows that in spite of blowout earnings from SanDisk Corp (NASDAQ:SNDK) and Western Digital Corp (NASDAQ:WDC), SOXL is slightly pulling back instead of breaking out.  The reason is that on one side, blowout earnings and even higher projections should cause SOXL to break out; but on the other hand, SOXL is up 216% from the March 30 low, and prudent investors are wondering how much more is there to go.
  • After the market close, Sandisk, maker of NAND memory, and Western Digital, a disk drive maker, reported blowout earnings significantly better than whisper numbers.  Both stocks immediately saw aggressive selling in the after market after earnings were reported.  Investors should consider watching these two stocks today to see if buying comes in and they go higher.
  • Apple Inc (NASDAQ:AAPL) reported robust earnings crediting the "most popular ever" iPhone.  Even without any material AI announcements, AAPL stock is higher as of this writing in the premarket. This indicates that if Apple comes with innovative AI announcements, AAPL stock has the potential to go up another $100.   As full disclosure, AAPL is in our portfolio, long from an average of $4.68.  Apple's new CEO John Ternus is a hardware engineer, and there are high hopes for a return to innovation like in the Steve Jobs era.
  • As of this writing, aggressive buying is coming into the stock market on news that Iran has submitted a new proposal.  Oil is falling on the news.
  • Two oil majors Exxon Mobil Corp (NYSE:XOM) and Chevron (NYSE:CVX) reported earnings better than whisper numbers.  Of special interest to prudent investors is that both oil majors are resisting pressure from the Trump administration to increase production to lower oil prices.
  • Yesterday, DJIA significantly outperformed other indexes primarily driven by only one stock Caterpillar Inc (NYSE:CAT).  Caterpillar reported earnings much better than whisper numbers due to demand for power equipment for AI data centers.  S&P 500 and Nasdaq 100 were held back by pension funds selling due to rebalancing.
  • Blind money will flow into the stock market today and Monday.  Blind money is the money that investors send to Wall Street at the beginning of the month without any analysis and without any consideration for market conditions.

Europe

Speculation is building that the European Central Bank and the Bank of England will raise rates in their next meetings.

Taiwan

Taiwan's Q1 GDP grew by a gigantic 13.7%.  The last time such growth was seen was in 1987.  The primary driver is AI semiconductors.  Taiwan Semicndctr Mnufctrng Co Ltd (NYSE:TSM), based in Taiwan, manufactures advanced AI chips for NVIDIA Corp (NASDAQ:NVDA) and CPUs for Apple.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Apple (AAPL), Microsoft Corp (NASDAQ:MSFT), Nvidia (NVDA), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are neutral in Alphabet Inc Class C (NASDAQ:GOOG) and Meta Platforms Inc (NASDAQ:META).

In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ:AMZN).

In the early trade, money flows are neutral in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ: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 (NYSE:USO).

Bitcoin

Bitcoin (CRYPTO: BTC) is seeing buying.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

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.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.