Harris or Trump: Defense Stocks Are Winning, Tech Battle, Falling Personal Income, Trump’s Crypto Push – RTX (NYSE:RTX)

To get an edge, here’s what you need to know today.

Winning defense titles

Please Click here for an enlarged graph of Rtx Company RTX Transmission.

Please note the following:

• This article is about the big picture, not a single stock. The RTX stock chart is used to illustrate the point.
• The market is reaching a consensus that defense stocks are winners regardless of whether Trump or Harris wins the election. The consensus is that defense spending will rise regardless of who wins.
• RTX is an aerospace and defense stock. RTX produces the Patriot missile defense system.
• The chart shows that RTX stock surged after reporting better-than-expected earnings.
• The chart shows Arora’s buy zones that offer readers of The Arora Report the opportunity to buy RTX at great prices.
• For full disclosure, there is an RTX position in the Core Model Portfolio in ZYX Buy by The Arora Report. There is also a trade around position on RTX. Trade around positions are a technique used by billionaires and hedge funds to maximize risk-adjusted returns.
• The chart shows that a signal has been given to take partial profits on the trade around position to exploit the strength.
• For completeness of information, The Arora Report will update the Buy Zone and Buy Now rating on RTX for investors who do not own shares.
• The RSI on the chart shows that RTX is overbought in the very short term.
• Other defense titles such as Lockheed Martin Corp LMT and L3Harris Technologies Inc. LHX is also reporting better than consensus earnings. Technically, LMT has broken out. A signal could be given on LMT if it pulls back.
• For those interested in ETFs, iShares US Aerospace & Defense ETF ITA is also attempting a breakout. For completeness of information, ITA is in the ZYX allocation model portfolio of The Arora Report.
• In the analysis of the Arora Report, all investors should consider an allocation to the Aerospace and Defense sector.
• The battle in tech stocks, especially AI stocks, continues. Many investors are selling AI stocks and rotating into small caps; other investors are taking advantage of the decline in AI stocks and buying aggressively. Cautious investors should consider using buy zones and Buy Now ratings.
• For completeness of information, iShares Russell 2000 ETF IWM and the micro cap closed-end fund (RMT) are part of The Arora Report’s ZYX allocation model portfolio.
• In the Arora Report analysis, Trump is good for small-cap stocks, but Harris is not.
• PCE is the Fed’s preferred gauge of inflation. The data just released came as expected. Here are the details:
  • PCE was 0.1%, versus the consensus 0.1%.
  • Core PCE was 0.2%, versus the consensus 0.2%.

• The U.S. economy is 70% consumer-driven. For this reason, prudent investors are paying attention to personal income and personal spending. The consumer continues to spend, but income could become a problem. Here are the details of the new personal income and spending data:
  • Personal income was 0.2%, versus the 0.4% expected.
  • Personal spending was 0.3%, versus the 0.3% expected.

• In the early stages of trading, the market is volatile as the momo crowd aggressively buys tech stocks, especially AI stocks. However, the upticks are met with selling.

The Magnificent Seven Streams of Money

In the early stages of trading, money flows are positive Apple Company AAPL, Amazon.com, Inc. AMZN, Meta Platforms Inc Metaphysics, NVIDIA Corporation NVDA and Tesla Inc TSLA.

In the early stages of trading, money flows are neutral Microsoft Corp Italian:

In the early stages of trading, money flows are negative Alphabet Inc Class C BEAUTIFUL.

In the early stages of trading, money flows are positive SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust Series 1 QQQ.

Momo Crowd and Smart Money in Stocks

Investors can get an edge by knowing the money flows in SPY and QQQ. Investors can get a bigger edge by knowing when the smart money is buying stocks, gold, and oil. The most popular gold ETF is SPDR Gold Confidence GLD. The most popular silver ETF is iShares Silver Trust Fund SLV. The most popular ETF for oil is US Oil ETFs USE.

Bitcoin

Bitcoin BTC/USD is seeing aggressive buying on expectations that Trump will announce a U.S. strategic reserve for bitcoin. Trump will deliver the keynote address at a bitcoin conference on Saturday.

We previously reported that Trump apparently invited investors to a private bitcoin fundraiser, where the entry fee for bitcoin investors is $845,000 per person. Trump has already raised more than $4 million in cryptocurrency.

Protective band and what to do now

It is important for investors to look to the future, not the rearview mirror.

Consider continuing to hold good existing very long-term positions. Depending on your individual risk preference, consider a hedge range of cash or Treasuries or short-term tactical trades, as well as short-to-medium-term hedges and short-term hedges. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection ranges by adding money to coverages. The high protection range is appropriate for those who are older or conservative. The low protection range is appropriate for those who are younger or aggressive. If you do not cover, your total money level should be higher than the above, but significantly lower than money plus coverages.

A 0% protection band would be very bullish and would indicate a full investment with 0% cash. A 100% protection band would be very bearish and would indicate the need for aggressive protection with cash and aggressive hedging or shorting.

It is worth remembering that you cannot take advantage of the new opportunities that arise if you do not have enough cash. When adjusting coverage levels, consider adjusting partial stop amounts for stock (non-ETF) positions; consider using wider stops on the remaining amounts; and also leave more room for high beta stocks. High beta stocks are those that move more than the market.

Traditional 60/40 wallet

Currently, the probability-based, inflation-adjusted risk-reward trade-off is not conducive to strategic long-term bond allocation.

Those who want to stick to the traditional 60% stock/40% bond allocation may want to consider focusing only on high-quality bonds and bonds with a duration of five years or less. Those willing to add sophistication to their investments may want to consider using bond ETFs as tactical, not strategic, positions at this time.

Arora Report is known for its accurate predictions. Arora Report correctly predicted the big AI rally before anyone else, the new bull market of 2023, the bear market of 2022, the new highs in the stock market 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. Click here to register for free forever Generate the wealth newsletter.

This article is by an unpaid contributor. It does not represent reporting by Benzinga and has not been edited for content or accuracy.

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