Fed Decision Ahead

Please click here for an enlarged chart of SK Hynix Inc – ADR (NASDAQ:SKHY).

Note the following:

  • This article is about the big picture, not an individual stock.  The chart of SKHY stock is being used to illustrate the point.
  • South Korea’s SK Hynix is one of the world’s three largest memory makers.  It competes with Micron (MU) and recently listed its stock in the U.S.
  • The chart is an hourly chart to give you a better picture.
  • The chart shows that after the recent U.S. IPO, SKHY traded as high as $194.80, and as the chart shows, has now pulled back to $128.45 as of this writing in the premarket.  This range gives you an idea of the extreme volatility since the U.S. listing.
  • The chart shows SKHY has traded as low as $113.70 and as high as $132.10 in the early trade this morning.  This range gives you an idea of the extreme volatility today.
  • SK Hynix reported outstanding earnings but still less than consensus and significantly less than whisper numbers.  Here are the details:
    • SK Hynix reported operating income of 61T Korean won vs. 64T won consensus.  The reported operating income is up 257% year-over-year.
    • SK Hynix reported  revenue of 79T won vs. 84T won consensus.
  • In South Korea, SK Hynix shares at one point were down about 20% but recovered to close down 9.6%.
  • Adding to the negative sentiment is that momo crowd darling Vertiv Holdings Co (NYSE:VRT) reported revenue of $3.27B vs. $3.38B consensus. Vertiv is a leader in providing cooling to AI datacenters.
  • On the positive side, disk drive maker Seagate Technology Holdings PLC (NASDAQ:STX) reported earnings better than consensus and whisper numbers.  Here are the details:
    • Seagate reported earnings $5.71 vs. $5.10 consensus.
    • Seagate reported revenue of $3.63B vs. $3.5B consensus.
    • Seagate guides fiscal Q1 EPS of $7.10 – $7.50 vs. $5.85 consensus.
    • Seagate guides Q1 revenue of $4.0B – $4.2B vs. $3.78B consensus.
  • The Trump administration has taken a major step to protect U.S. production of humanoid robots and power inverters.  The import of Chinese humanoid robots and connective inverters is being banned.  Tesla Inc (NASDAQ:TSLA) is a beneficiary as it is a major manufacturer of humanoid robots.  On the inverter side, Enphase Energy Inc (NASDAQ:ENPH) and Solaredge Technologies Inc (NASDAQ:SEDG) are beneficiaries. 
  • Speculation will build if the U.S. will also ban Chinese large language models that compete with OpenAI and Anthropic. 
  • There is additional volatility in the stock market ahead of the Fed’s rate decision that will be announced at 2pm ET.
  • The momo crowd’s pattern is to buy ahead of the Fed decision on hopium.  This morning, the momo crowd’s pattern is punctuated by earnings from SK Hynix, Seagate, and fuel cell company Bloom Energy Corp (NYSE:BE).
  • On the negative side, in a surprise, Iran attacked U.S. forces in Jordan.  Iran linked Iraqi groups attacked Saudi oil installations.  Oil is rising as a result of these attacks.

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 Alphabet Inc Class C (NASDAQ:GOOG) and Microsoft Corp (NASDAQ:MSFT).

In the early trade, money flows are neutral in Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META), NVIDIA Corp (NASDAQ:NVDA), and Tesla (TSLA).

In the early trade, money flows are negative in Apple Inc (NASDAQ:AAPL).

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).

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.