Tech Stocks Tumble As Rate Cut Odds Fall; $870M Outflows From Bitcoin ETFs

Author: The Arora Report | November 14, 2025 11:28am

Fed Fears

Please click here for a chart of Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Note the following:

• The chart shows QQQ has dipped into zone 1 (support).
• The chart shows QQQ is making a lower low than the prior low.
• The chart shows that QQQ has very quickly given up the gains from the government opening euphoria.
• RSI on the chart shows QQQ is oversold.  Oversold markets tend to bounce.
• A pullback to the low band of zone 1 (support) and even a slight break is a normal part of the course.  What is unusual is that based on historical precedent such a move typically  happens in September and October, but instead this year is happening in November.
• Assuming the upcoming data is as expected,  expect money managers to start buying in year end chase.  However, if the data is worse than expected and there is more evidence that the Fed will not do the wrong thing, the risk to the stock market will rise.  It will be important to watch the data as it comes and also pay attention to Fed speak.
• We have been repeatedly sharing with you that, in addition to AI, the other big reason for the stock market rise has been liquidity and loose financial conditions.  The consensus has been that liquidity will increase and financial conditions will become even looser in December.  A part of the equation has been a strong belief that the Fed would cut interest rates in December even if the data does not justify it.
• Yesterday morning before the stock market open, we shared with you:

Prudent investors should pay attention that at this time, four Fed presidents, Goolsbee, Musalem, Collins, and Schmid, are not calling for a rate cut in December.

• Yesterday, the stock market fell and is also seeing selling in the early trade today on the fear that the Fed may not do the wrong thing.  The wrong thing to do is to cut interest rates even when the data does not justify it.  The stock market is troubled that in spite of intense political pressure, four Fed presidents have the gumption to stand up for the right thing.  
• In our analysis, there is a better than 50% probability of a rate cut in December.  Investors should not get carried away against or in favor of a rate cut, and instead investors should focus on the data.  Due to the government shutdown, we have not been getting the data.  Now that the government is open, a deluge of data is ahead.  
• A near term determinant of the stock market direction will be NVIDIA Corp (NASDAQ:NVDA) earnings and the market reaction, which are scheduled to be reported on November 19.
• Producer Price Index (PPI) and retail sales were not released this morning due to the government shutdown.
• Especially hard hit are momo accounts that were aggressively buying call options on cryptos and highly speculative stocks.  Many of these accounts are now totally blown.  Even those momo accounts that were buying the momo crowds favorite stocks such as Oklo Inc (NYSE:OKLO), AST SpaceMobile Inc (NASDAQ:ASTS), IREN Ltd (NASDAQ:IREN), Robinhood Markets Inc (NASDAQ:HOOD), and CoreWeave Inc (NASDAQ:CRWV) on margin have experienced margin calls leading to forced selling.  This is causing inordinate pain among the momo crowd.

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 negative in Apple Inc (NASDAQ:AAPL), 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).

In the early trade, money flows are negative in SPDR S&P 500 ETF Trust (NYSE:SPY) and Nasdaq 100 ETF (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 (NYSE:GLD).  The most popular ETF for silver is iShares Silver Trust (NYSE:SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Gold

Gold and silver are being sold on concerns that the Fed may not do the wrong thing.  Gold and silver benefit when the Fed does the wrong thing.

Bitcoin

We previously shared with you when Bitcoin (CRYPTO: BTC) was much higher that bitcoin whales were selling.

Two big drivers of bitcoin are liquidity and loose financial conditions.  Yesterday, bitcoin ETFs saw an outflow of $870M on concerns that the Fed may not do the wrong thing.  This was the second biggest one day outflow in bitcoin ETFs.  As of this writing, bitcoin is trading around $95K.

Bitcoin promoters are out in force, trying to convince retail investors to double down on bitcoin.

What To Do Now

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills 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 bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.  A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.  Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

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The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs 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. Please click here to sign up for a free forever Generate Wealth Newsletter.

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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.

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