Market Reaction To Micron Earnings And Broadcom Deal Signals A Shift In AI Trade

Bond Danger Signal Please click here for an enlarged chart of iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT ). Note the following: The chart shows TLT has fallen below the Arora danger zone. RSI on the chart shows TLT is oversold. Prudent investors should note TLT falling below the Arora danger zone is very important because it signals that rising yields have moved beyond ordinary volatility and into a technically weaker regime.

68%. These are the highest levels since 2002. As of this writing, yields are pulling back. K.

also jumped before pulling back. Smart money is taking the fall in TLT seriously. This is an early warning to stock investors and not just bond investors. Rising long term yields increases competition for stocks.

In our analysis, prudent investors should not ignore long term yields. The momo crowd continues to ignore them. In our analysis, not only is TLT oversold, the number of shorts in long bonds have increased. This is a perfect set up for a short squeeze that could bring TLT back into the danger zone from below the danger zone.

The official jobs report will be released tomorrow at 8:30am ET. In our analysis, it will be very critical. If the jobs report is somewhat weak, it could trigger a short squeeze in bonds and, in turn, a vicious short squeeze in stocks causing a major rally. If the jobs report is very weak, it could trigger a bigger short squeeze in bonds, but stocks may fall on the prospect of a slowing economy.

If the jobs report is strong, yields will likely rise further. However, a battle royale will likely take place between bulls and bears in the stock market. Bulls will contend that the economy is so strong it can handle a rise in yields. Bears will contend that the stock market is simply too high relative to yields.

Micron reported earnings and guided better than the consensus but below whisper numbers. Micron gross margins are slightly below consensus. It is the first time in several quarters that bulls and bears in Micron Technology Inc (NASDAQ: MU ) are balanced. The result is that MU stock is range bound, without much movement, after earnings.

The biggest losers are option buyers in MU stock as the options market was forecasting a 7% move. Also on the losing end are those who used popular AI chatbot analysis to buy the options. This is a good illustration as to why using AI chatbots to make actual financial decisions can be dangerous to your financial well being. AI chatbots are great for preliminary research but not for decision making.

This morning, the news is that Broadcom Inc (NASDAQ: AVGO ) will lend $42B to Anthropic for leasing Broadcom chips. Prudent investors should pay attention to the market’s reaction in AVGO stock. If this news had come out in June 2026, AVGO stock would have been up 10% — 15% in the premarket. 5%.

The market’s reaction to Micron earnings and the big Broadcom deal shows that the current phase of AI is different from the prior phase. One of the biggest mistakes the momo crowd is making right now is they are not understanding the major shift and continue to act like AI is still in the prior phase. This is nothing new. Historically, the momo crowd is almost always behind the curve.

This is how the momo crowd ends up losing money. In contrast, smart money is always trying to get ahead of the curve. Expect blind money to flow into the stock market today and tomorrow. Blind money is the money that flows into the stock market on the first two days of the month without any analysis irrespective of market conditions.

In the early trade, Wall Street is front running blind money. In front running, Wall Street buys stocks and then sells them to blind money at higher prices. Blind money never catches on because they have drank the Kool-Aid that they are not smart enough to analyze the market. Initial jobless claims came at 197K vs.

200K consensus. 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. com, Inc.

(AMZN), Alphabet Inc Class C (GOOG), Meta Platforms Inc (META), Microsoft Corp (MSFT), NVIDIA Corp (NVDA), and Tesla Inc (TSLA). In the early trade, money flows are negative in Apple Inc (AAPL). 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. Disclaimer: This article is from an unpaid external contributor. It does not represent ’s reporting and has not been edited for content or accuracy.