China Warning

Please click here for a chart of gold futures (GC_F).

Note the following:

• The chart shows gold has moved up above $5000 again.   The up move in gold is triggered by China's warning.  The same warning from China is hampering the budding stock market rally from oversold conditions.
• China is warning its financial institutions to reduce their holdings of U.S. Treasuries.  China is also warning its financial institutions to limit purchase of new U.S. Treasuries.
• Chinese banks are large holders of U.S. Treasuries.
  • China is being proactive to stop potential ire from President Trump.  China is not framing this action as a loss of confidence in the U.S. but more of a diversification move.
  • This is a major development prudent investors should pay attention to.
• Another major international development that prudent investors need to pay attention to is the historic election win of Prime Minister Takaichi in Japan.  Her Liberal Democratic Party (LDP) has gained a supermajority in parliament.  Takaichi's win has major implications for investors.
  • Stocks in Japan have risen on the win.  iShares MSCI Japan ETF (NYSE:EWJ) is in our portfolio.
  • In our analysis, any big dip in the Japanese stock market should be bought.
  • Takaichi's win has a mixed impact on the carry trade.  The carry trade is important because funds have borrowed hundreds of billions of dollars in Japan and invested it in U.S. securities, lately in AI stocks.
  • Takaichi's win brings Japan closer to the U.S.
  • Takaichi is taking a stronger stand against China.
  • Takaichi is taking a stand in favor of Taiwan.
  • Takaichi is likely to spend more on defense, boosting defense stocks.  iShares US Aerospace & Defense ETF (BATS:ITA) as well as Select STOXX Europe Aerospace & Defense ETF (BATS:EUAD) are in our portfolio.
  • Takaichi will visit the U.S. on March 19.  Expect more details of the $550B planned Japanese investment in the U.S. as part of the trade deal.  The details may move several stocks.
• In important news, the FDA is finally acting against copycat weight loss drug company Hims & Hers Health Inc (NYSE:HIMS). In response, HIMS has reversed itself.  Novo Nordisk A/S (NYSE:NVO) is filing a lawsuit. NVO and Eli Lilly (NYSE:LLY) are rising.  As full disclosure, we gave a signal to buy NVO stock when it was at $44.12 when NVO stock had plunged on the news of HIMS selling its copycat pills for $49 and analysts were issuing sell signals.  Our contrary buy signal was based on the analysis that the FDA would act.  That call has proven spot on.  As full disclosure, on Friday after hours, we gave a signal to take partial profits on NVO stock around $50.61 when NVO stock jumped on the news of FDA action.

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 Microsoft Corp (NASDAQ:MSFT).

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

In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

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 (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).

Gold

The momo crowd is aggressively buying SPDR Gold Trust (NYSE:GLD), iShares Silver Trust (NYSE:SLV), VanEck Gold Miners ETF (NYSE:GDX), and Global X Silver Miners ETF (NYSE:SIL).

Bitcoin

Bitcoin (CRYPTO: BTC) is seeing selling on the China warning.

What To Do Now

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

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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.

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