HCI

AI Financing Deluge

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

Note the following:

• Semiconductors reflect the AI trade, and SOXL is the momo crowd’s favorite.
• The chart shows SOXL has crossed back into zone 3.  Zone 3, which was previously resistance, has now become support.  This is a positive.
• RSI on the chart shows SOXL is no longer oversold.
• There is as a deluge of financing for AI:
  • Anthropic has filed for IPO.  The proposed valuation is $1.5T – $2T.
  • Broadcom Inc (AVGO) along with Wall Street firms Morgan Stanley (MS), Citigroup Inc. (C), Blackstone Inc (BX), and Bank of America Corporation (BAC) have put together a $63B package for custom AI XPU accelerators for Anthropic.
  • Meta Platforms Inc (META) is expanding its total raise to $95B.
  • SpaceX has raised $40B debt for financing GPU purchases.
• In our analysis, how the markets handle this deluge of AI financing is an important data point.  So far, the markets are handling it well, but prudent investors should keep an eye on future developments.  As we previously shared with you in our analysis, the biggest constraint to AI development will be the availability of capital.  
• Oil pulling back is also helping the stock market in the early trade.  Oil is pulling back on a statement attributed to Iran’s Supreme Leader Khamenei that he seeks a resolution to the Strait of Hormuz situation.
• There is a valuable data point from the price action in neoclouds including CoreWeave Inc (CRWV), Nebius Group NV (NBIS), and IREN Ltd (REN). Elon Musk’s statement that neoclouds are going to see guppy-level debt seems to have acted as a clearing event.  CRWV, having traded as low as $51.24 yesterday, is trading at $57.70 as of this writing in the premarket.  This is a positive development for the AI trade.
• Durable orders data is mixed.  Here are the details:
  • Durable orders came in at 1.8% vs 1.0% consensus.
  • Durable orders ex-transportation came at 0.5% vs 0.6% consensus.
• The FOMC meeting begins today.  The Fed will announce its rate decision tomorrow at 2pm ET.

China

The yield on China’s five year bonds is trading close to its lowest level on record.  It is trading at 1.356%.  Low yields in China is of interest because it contrasts with rising yields in the U.S. and Europe.

Malaysia

Due to the war in the Middle East, many data centers that would have normally gone to the Middle East are now looking at Malaysia.  If Malaysia ends up attracting a large number of data centers, it will be a huge positive.  ZYX Emerging has covered Malaysia continuously for almost two decades.

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. (AMZN), Alphabet Inc Class C (GOOG), NVIDIA Corp (NVDA), and Tesla Inc (TSLA).

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

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (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 (USO).

Bitcoin

Bitcoin (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. Most recently, we correctly called the rally from recent stock market lows and the 2026 semiconductor decline before a 25% drop in the Semiconductor ETF (SMH). In gold, we bought at an average price near $1,105, close to cycle lows, and took partial profits near $5,400, close to cycle highs. Please click here to get our 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.