Watch SK Hynix

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 yesterday SOXL was not able to sustain the initially rally and closed at the top band of zone 2 (support).
  • The chart shows in the early trade, SOXL has dipped into zone 2.
  • Investors are anxiously awaiting trading in SK Hynix (SKHY).  How SK Hynix trades will move SOXL and, in turn, the entire stock market.  Here are the key points to pay attention to regarding SK Hynix:
    • SK Hynix IPO was priced at $149.
    • SK Hynix offering was 7X oversubscribed.
    • Many large institutions and hedge funds received less allocation than anticipated.  This may increase demand after SK Hynix starts trading.
    • SK Hynix trades at a discount to Micron Technology Inc (NASDAQ:MU). Micron forward PE is 6.7 vs. 5.4 for SK Hynix.
    • SK Hynix is growing faster than Micron.
    • SK Hynix is the largest NVIDIA Corp (NASDAQ:NVDA) memory supplier.
  • The wisdom among the crowd is that SKHY will quickly move to $185 and thus close the discount to MU.
  • In our analysis, prudent investors should also be aware of another scenario.  Instead of SK Hynix moving from $149 to $185 to close the discount to Micron, MU stock could move down.
  • Especially if SKHY does not trade well, prudent investors who took partial profits or hedged semiconductor positions in accordance with the May 19 posts would be positioned well.  Our portfolios have been heavy in semiconductors, and the position in semiconductor ETF (SMH) has a gain of 7440%.
  • The U.S. has approved Circle Internet Group Inc.’s (NYSE:CRCL) cryptobank.  The cryptobank approval is a key milestone.
  • For the umpteenth time, the U.S. and Iran have agreed to stop attacking each other.  The stock market is reacting positively, and oil is reacting negatively.

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), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative in Apple Inc (NASDAQ:AAPL), Alphabet Inc Class C (NASDAQ:GOOG), Nvidia (NVDA),

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 seeing buying.

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.