Iran Goads Trump

Please click here for an enlarged chart of oil futures (CL_F).

Note the following:

• The chart shows the move up in oil when Iran laid out its conditions for ending war.
• Why would talk of peace spike the price of oil?  The reason is Iran is simply goading President Trump.  There is zero probability of President Trump accepting any of Iran's conditions. Here are Iran's three conditions from a post from Iran's president:
  • "[Recognition of] Iran's legitimate rights"
  • "Payment of reparations"
  • "Firm int'l guarantees against future aggression"
• The chart shows when Iran escalated by hitting a ship in Iraqi waters.  Iran claims that the ship is U.S. owned.  Hitting ships is a change of strategy by Iran.
• Iran is further escalating in a number of ways.  Based on Iran's escalation, the stock market should have seen a major sell off.  Initially, the stock market sold off, but the lows have been aggressively bought.  The reason behind the buying is TACO (Trump Always Chickens Out) hopium.
• Iran's new supreme leader is going to speak for the first time on the war.  His tone and what he says will be instructive for investors.
• Previously President Trump had offered for the U.S. Navy to escort tankers through the Strait of Hormuz.  From our sources, yesterday there were multiple reports that the U.S. Navy was refusing requests to escort.  This morning, Energy Secretary Chris Wright is saying the U.S. is not ready to escort tankers through the Strait of Hormuz but could be ready by the end of the month.  This indicates that the war may be more drawn out than the stock market currently believes.
• Initial jobless claims came at 213K vs. 215K consensus.
• On the negative side, more problems are surfacing in private credit.  This is important for two reasons:
  • Private credit is heavily exposed to SaaS companies.
  • Private credit has been extensively used for AI data center build out.

Housing Starts

Housing data indicates that builders were more optimistic before than they are now.  Here are the details:

• Housing starts came at 1.487M vs. 1.340M consensus.
• Building permits came at 1.376M vs. 1.392M consensus.

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 neutral in Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative in Apple Inc (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA).

In the early trade, money flows are negative 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 (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (NYSE:SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Gold

The momo crowd is buying gold in the early trade, and this is reflected in gold ETF (GLD), silver ETF (SLV), VanEck Gold Miners ETF (NYSE:GDX), and Global X Silver Miners ETF (NYSE:SIL).  Smart money is inactive in the early trade.

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.