Samsung Strike

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

Note the following:

  • The chart shows yesterday SOXL traded in the range of $135.02 – $160.54 and closed at $151.89.   In traditional technical analysis, the fact that the closing was so much higher than the low price is seen as a sign that the semiconductor rally is ready to resume again.  No investor should rely solely on technical analysis as it no longer works as well as it used to.
  • The chart shows this morning semiconductor stocks are rallying.
  • Semiconductors are rallying for the following reasons:
    • Samsung Electronics Co Ltd (OTC:SSNLF) is expected to face a strike starting tomorrow.  Samsung is the largest memory chip maker in the world.  This is especially helping the stocks of Micron Technology Inc (NASDAQ:MU) and SanDisk Corp (NASDAQ:SNDK).
    • Two fully loaded Chinese tankers and one Korean tanker have exited the Strait of Hormuz.  This is giving rise to optimism that oil will start moving through the Strait of Hormuz soon.  As a result, oil is pulling back.
    • As oil pulls back, on the prospect of lower oil prices helping inflation, yields are pulling back and bonds are moving higher.
    • Vice President Vance is talking up a deal with Iran.  Iran is saying it will retaliate beyond the Middle East if the U.S. attacks again.  However, as has been the case, the stock market reacts positively to any potentially good news related to Iran but ignores any potential negative news.
    • This morning, there is optimism that NVIDIA Corp (NASDAQ:NVDA) earnings will exceed whisper numbers.  As is their pattern, the momo crowd is buying NVDA stock and semiconductor stocks ahead of Nvidia earnings.  Earnings is a risk event, both to the upside and the downside.  As previously shared with you, NVDA stock fell after earnings in three of the last four quarters.  The momo crowd buys ahead of risk events because the momo crowd considers only potential rewards and ignores the risks.  In contrast, smart money typically does not buy ahead of risk events because smart money looks at both risk and reward.
  • SpaceX (SPCX) IPO paperwork is likely to become public this afternoon.  This will likely add more excitement to investors and result in more buying of stocks.
  • In important earnings, Target Corp (NYSE:TGT) earnings are better than whisper numbers.  Target's turnaround is in progress.  Lowe’s Companies Inc (NYSE:LOW) earnings are inline with whisper numbers.
  • FOMC minutes will be released at 2pm ET.
  • Philadelphia Fed President Paulson suggests an interest rate hike is on the table.

Europe

Kocher of the European Central Bank (ECB) is saying that ECB may hike interest rates in June if the Iran war does not end.

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 Amazon.com, Inc. (NASDAQ:AMZN), Nvidia (NVDA), and Tesla Inc (NASDAQ:TSLA).

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

In the early trade, money flows are negative in Microsoft Corp (NASDAQ:MSFT).

In the early trade, money flows are positive 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 range bound.

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.