• The Morning Capsule is about the big picture, not an individual stock. A chart of AAPL stock is being used to illustrate the point.
• AAPL is the largest stock and carries heavy weight in the indexes. For this reason, AAPL stock is very important to the stock market. Apple reports earnings after the market close.
• The chart shows that AAPL stock made a lower low below the support/resistance zone.
• The chart shows that AAPL stock moved up back into the support/resistance zone yesterday on the Fed and market mechanics induced rally.
• Market mechanics continue to drive aggressive stock buying this morning.
• Apple has been showing declining growth for several quarters, and Apple has China troubles. AAPL stock is also very expensive. However, none of the traditional fundamentals seem to matter in the case of Apple because a large number of investors believe in Apple and they want to buy AAPL stock.
• We will be carefully looking at Apple’s sales in China, iPhone sales, services growth, and AI plans. The mention of AI is still very powerful. For example, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported weak earnings Tuesday. After earnings, the stock fell to $94, but aggressive buying came in when the company gave rosie projections of its AI chip. The stock moved up $14 from its low.
• The all important jobs report will be released Friday at 8:30am ET. The jobs report will test the budding rally in stocks.
• Initial jobless claims came at 217K vs. 214K consensus. This indicates that the jobs picture is staying strong. Initial jobless claims is a leading indicator and carries heavy weight in our adaptive ZYX Asset Allocation Model with inputs in ten categories. In plain English, adaptiveness means that the model changes itself with market conditions. Please click here to see how this is achieved. One of the reasons behind The Arora Report’s unrivaled performance in both bull and bear markets is the adaptiveness of the model.  Most models on Wall Street are static.  They work for a while and then stop working when market conditions change.
• Q3 Unit Labor Costs - Prelim came at -0.8% vs. 1.5% consensus. In The Arora Report analysis, this is very positive data for the stock market. 
• Q3 Productivity - Prelim came at 4.7% vs. 3.6% consensus. In The Arora Report analysis, this increase in productivity is also very positive for the stock market. In the long run, the use of AI will significantly increase productivity.  
• Please be sure to read yesterday’s Afternoon Capsule as hedges were reduced and the call was to deploy more cash, i.e. buy more stocks.
• A part of yesterday’s rally in the afternoon was blind money buying. Blind money buying will continue today.
• As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.

In the early trade, money flows are positive in Apple Inc, Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding 🔒 in cash or Treasury bills or allocated to short-term tactical trades; and short to medium-term hedges of 🔒, and short term hedges of 🔒. This is a good way to protect yourself and participate in the upside at the same time.