Computers In New Tesla Cars Failing But Tesla Stock Rockets On Trump's Support

To gain an edge, this is what you need to know today.

Extreme Positive Sentiment

Tesla Inc (TSLA) has seen a significant increase in stock prices, primarily driven by a mix of market sentiment and news. Here are some key observations:

• This article focuses on the overall market trend rather than individual stocks, using TSLA as an illustrative example.
• The stock price of TSLA appears to be in a parabolic rise.
• A recent buy signal indicated by The Arora Report suggests a 66.8% increase in TSLA shares in just under six weeks.
• However, the Relative Strength Index (RSI) indicates that TSLA is overbought, which often leads to a potential price pullback.
• Recent stock gains are partly fueled by speculation that former President Trump may change regulations to exempt Tesla from having to report car crashes, which are critical for safety assessments. So far, Tesla has reported over 1,500 crashes.
• Interestingly, despite reports of computer failures in new Tesla models, the stock price continued to rise. This rise showcases the power of overly positive market sentiment, where bad news might not impact stock prices.
• A new group of investors, who typically oppose electric vehicles, is now buying TSLA in response to Trump's association with Tesla CEO Elon Musk.
• The Arora Report warns that electric vehicle (EV) sales may decline, posing risks to TSLA's stock price, though bullish analysts maintain that Tesla's future relies on its relationship with Trump and plans for autonomy and robotaxis.
• Intelligent investors recognize that extreme positive sentiment can serve as a signal to sell, leading to profit-taking amid buying activity.
• Retail sales data shows a mixed picture, with maintaining car purchases but a decline in other buying areas: the latest figures show overall retail sales rose by 0.7%, surpassing the expected 0.5%, while retail sales excluding autos grew by only 0.2%, below the 0.4% forecast.
• The Federal Open Market Committee (FOMC) is beginning its meeting today, with a rate decision to be announced tomorrow.

Magnificent Seven Money Flows

At the outset of trading, the money flow is positive in both Alphabet Inc Class C and Tesla, while it stands neutral for Meta Platforms Inc. Conversely, there is a negative money flow in Apple Inc, Amazon.com, Inc., Microsoft Corp, and NVIDIA Corp. The SPDR S&P 500 ETF Trust and Invesco QQQ Trust Series 1 are also seeing negative money flows.

Momo Crowd And Smart Money In Stocks

Investors benefit from staying informed about money flows in stock indices like SPY and QQQ. Knowing when institutional investors (smart money) are active can provide greater insights into market dynamics. ETFs like the SPDR Gold Trust (GLD) and iShares Silver Trust (SLV) are also important for tracking gold and silver investments.

Bitcoin

Bitcoin is experiencing upward momentum as speculation arises that Trump will announce a bitcoin reserve on his first day if he returns to office.

Protection Band And What To Do Now

Investors are advised to look ahead instead of reviewing past performance. A unique protection band developed by The Arora Report helps to synthesize various data points and indicators into actionable insights.

Maintaining existing long-term positions is recommended, with protective strategies tailored to individual risk tolerance, including cash reserves and tactical trades. For conservative investors, a higher protection band may be suitable, while younger or more aggressive investors might consider lower bands. Holding sufficient cash is vital for seizing future opportunities.

For those adhering to a traditional portfolio structure with 60% stocks and 40% bonds, focusing on high-quality bonds of shorter duration can be prudent.

Conclusion

The Arora Report has a proven track of making accurate market predictions, from significant trends in artificial intelligence to stock market milestones.

Tesla, Stock, Market