Will President Trump Back Off?

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

Note the following:

  • Semiconductors are the leading sector that has been driving the stock market higher.  SOXL is the momo crowd’s favorite semiconductor ETF.
  • The chart shows that the drop after Samsung Electronics Co Ltd (OTCPK:SSNLF) great earnings led SOXL below zone 2 (support), but SOXL managed to close above the low band of zone 2 as dip buyers stepped in.
  • The chart shows volume yesterday was higher.
  • The chart shows that in the early trade this morning, SOXL is below the low band of zone 2.
  • In our analysis, of note is that semiconductor stocks are falling on Iran related news.  This is a shift from recent investor behavior.  Recent behavior has been investors buying semiconductor stocks on bad news from Iran on the narrative that semiconductors and AI have nothing to do with Iran.  
  • Prudent investors should carefully watch if dip buyers step in and push SOXL back in the support zone.
  • President Trump is saying that the ceasefire with Iran may be "over."  Here is the key question for investors: Will President Trump back off with his eye on the midterm elections?
  • In our analysis, investors should draw a conclusion from the following statement from President Trump, "Now I’ll let our wonderful negotiators keep talking if they want, but I don’t see it.”
  • The U.S. has revoked Iran’s license to export oil.  The U.S. hit over 80 targets in Iran.  Iran responded with strikes at Bahrain and Kuwait.  These two countries have U.S. bases.
  • Investors are eagerly awaiting the FOMC minutes.  The FOMC minutes will give a glimpse into how Warsh intends to run the Fed.  FOMC minutes will be released at 2pm ET and may be market moving.
  • We have been warning investors that a potential failure point in the AI trade is being fueled with private market debt.  This is different from the internet bubble of the late 1990’s.  In our analysis, Amazon.com, Inc. (NASDAQ:AMZN) bond sale yesterday shows that investor demand is cooling.  The oversubscription for Amazon debt was only 1.6X vs. 4X for high grade corporate deals seen recently.  As a reference in March 2026, Amazon debt was 3.4X oversubscribed.  

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 negative in Amazon (AMZN), Apple Inc (NASDAQ:AAPL), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

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

Momo Crowd And Smart Money In Stocks

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).

Oil

API crude inventories came at a draw of 0.399M barrels vs. a consensus of a draw of 1.5M barrels.

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.