Mag7 Earnings

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

Note the following:

  • The chart shows an island reversal in semiconductors.  In traditional technical analysis, this is a negative pattern and often indicates a top.  Prudent investors should carefully watch semiconductors because semiconductors are the leading sector leading the stock market higher from the March 30 low.
  • The chart shows semiconductors are moving higher in the early trade on good earnings from Seagate Technology Holdings PLC (NASDAQ:STX) and NXP Semiconductors NV (NASDAQ:NXPI).
  • Dutch semiconductor company NXPI reported doubling its first quarter profits.  This indicates demand for non-AI semiconductors is increasing.
  • As full disclosure, NXPI is in our portfolio – long from an average of $92.30.
  • Disk drive maker Seagate reported earnings significantly better than whisper numbers and projected strong demand.  AI is increasing the need for storage.  The three major disk drive manufacturers Seagate, Western Digital Corp (NASDAQ:WDC), and Toshiba Tec ADR (OTC:TSHTY) are not meaningfully increasing production.  Enthusiasm from Seagate is being carried over to semiconductor memory makers Micron Technology Inc (NASDAQ:MU) and SanDisk Corp (NASDAQ:SNDK).
  • In our analysis, Seagate projections are assuaging fears from a report yesterday that OpenAI was not meeting its internal targets.   
  • President Trump is leaning toward leaving the Iran blockade in place for a long time.  The hope is that economic pressure will accomplish what military attacks did not accomplish.  It appears that President Trump is ruling out the options of simply leaving and declaring victory or bombing Iran again.  Please see the oil section below.
  • Durable orders data is strong.  Here are the details:
    • Durable orders came in at 0.8% vs 0.5% consensus.
    • Durable orders ex-transportation came at 0.9% vs 0.6% consensus.
  • Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), and Microsoft Corp (NASDAQ:MSFT) will report earnings today after hours.  Apple Inc (NASDAQ:AAPL) will report earnings tomorrow after hours. These earnings will determine where the stock market goes next.

Housing Starts

Housing starts are very strong, but building permits that reflect the future are weak.  Here are the details:

  • Housing starts for March came at 1.502M vs. 1.356M prior.
  • Building permits for March came at 1.372M vs. 1.538M prior.

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 Amazon (AMZN), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative in Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), and Meta (META).

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

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).

Oil

Oil is moving higher on President Trump's plan to leave the Iran blockade for longer.  There is concern that the Iran war will not be resolved and will persist as a low level conflict.  If this is the case, it will negatively impact the global economy.  For the time being, the stock market momo crowd is oblivious.  On the other hand, U.A.E leaving OPEC is positive for the global economy in the long term.  

API crude inventories came at a draw of 1.79M barrels vs. a consensus of a build of 0.3M 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.