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

Avoid The Common Investment Mistake

Please click here for an enlarged chart of iShares 20+ Year Treasury Bond ETF (TLT).

Investors should note the following points:

• Many investors and advisors are losing money because they believe long bonds are a safe haven.
• The chart indicates that when TLT broke above resistance level zone 2, there was significant buying activity in bonds regarded as safe assets.
• However, bonds fell the very next day below zone 2.
• After this drop, bonds declined further through zone 3 to the top band of zone 4 (support).
• Currently, bonds have rebounded back into zone 3 (resistance).
• The Relative Strength Index (RSI) shows that TLT is oversold, contributing to this recent bounce.
• There’s an RSI divergence, suggesting that TLT may experience another decline soon.
• When the stock market faced recent turbulence, many investors rushed to buy long bonds, adhering to conventional wisdom that they are safe. This led to substantial losses for those who overlooked our analysis.
• The chart retrospectively shows the Fed’s 50 basis point rate cut last year.
• At that time, TLT broke out above the top band of zone 1 (resistance), prompting many to incorrectly assume bonds would continue to rise.
• Our contrary call indicated that bonds would fall, and history has shown that investors who bought during the Fed’s aggressive action faced significant losses.
• Recognizing persisting orthodox thinking among many investors, we include a section titled “Traditional 60/40 Portfolio” in every Morning Capsule.
• Initial jobless claims were reported at 215,000, down from a consensus of 225,000.

• We have consistently asserted that there is no Fed put. However, many in the market seemed to believe otherwise. Powell’s statements contradict these expectations.
• In a recent post, President Trump criticized Powell after his remarks on the lack of a Fed put, calling his reports a “complete mess.”
• This has clearly frustrated President Trump, who also stated that “Powell’s termination cannot come fast enough!”
• If President Trump were to dismiss Powell, our Protection Band would likely see a significant increase.
• Trade negotiations remain critical for market dynamics. Here are three key updates:
  • President Trump made significant progress in talks with Japanese trade representatives.
  • He also had a productive conversation with Mexico’s President.
  • Today, President Trump is scheduled to meet with Italian officials.
• Noteworthy earnings reports include:
  • The largest home builder, DR Horton Inc (DHI), reported results below expectations and issued lower guidance.
  • The leading health insurer, UnitedHealth Group Inc (UNH), also reported earnings below consensus and guided down, highlighting rising medical costs.
  • The largest semiconductor foundry, Taiwan Semiconductor Manufacturing Company (TSM), reported earnings above consensus and issued an optimistic forecast.
• Eli Lilly And Co (LLY) announced Phase III trial data for orforglipron, an oral weight loss drug showing comparable results to Wegovy, meeting Wall Street’s expectations for a 5%-6% weight loss. The drug also shows promise in diabetes treatment. Investors have eagerly awaited effective weight loss pills, and Eli Lilly’s results indicate that this may soon be relevant. In premarket trading, LLY shares surged by 13%, currently at $829.12. For transparency, LLY is part of our ZYX Buy Core Model Portfolio, previously acquired at $318.45. There is also a signal for short-selling Eli Lilly’s competitor, Novo Nordisk A/S (NVO).

Europe Updates

The European Central Bank (ECB) has reduced three key interest rates by 25 basis points. This move seems to be a reaction to tariff adjustments made by President Trump.

Magnificent Seven Money Flows

During early trading, positive money flows were observed in Apple Inc (AAPL), Amazon.com, Inc. (AMZN), Alphabet Inc Class C (GOOG), Meta Platforms Inc (META), Microsoft Corp (MSFT), NVIDIA Corp (NVDA), and Tesla Inc (TSLA).

Positive money flows were also noted in the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ).

Momo Crowd And Smart Money Insights

Investors can gain a strategic advantage by tracking money flows in SPY and QQQ. An even greater edge can be attained by observing when smart money invests in stocks, gold, and oil. The most prominent ETFs for these commodities include SPDR Gold Trust (GLD) for gold, iShares Silver Trust (SLV) for silver, and United States Oil ETF (USO) for oil.

Bitcoin Market Status

Bitcoin remains within a stable range.

Protection Band: Strategies Moving Forward

Investors should focus on future opportunities rather than past performance. Our proprietary Protection Band consolidates all relevant data, indicators, news, and analyses into a format that facilitates actionable insights for investors.

Consider maintaining long-term positions that are sound. Depending on personal risk tolerance, an effective protection band may involve cash, Treasury bills, or targeted short-term trades.