(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
DJIA TURNS POSITIVE FOR 2016, LOTS OF FED SPEAK AHEAD
This is what you need to know today.
In spite of all the doom and gloom that has been spread around, DJIA has now turned positive for the year. At the depth of the gloom, on February 12, 2016, the Morning Capsule headline was,
EVERYTHING WILL NOT GO WRONG, IGNORE THE GOOD NEWS AT YOUR OWN PERIL
Several Fed officials are speaking today. We will be carefully listening to see if any one of them does the following;
- Walk back the dovishness.
- Explain the contradictions between the policy statement, Yellen’s press conference and the Dot Plot.
The yield on the benchmark 2026 Japanese government debt dropped to -0.135%, lower than the deposit rate at the Bank of Japan. This is a remarkable development worth keeping an eye on.
In China, property bubble is getting bigger as home prices rose again.
In Russia, central bank left its benchmark rate unchanged.
Brazil is now in a constitutional crisis. A court blocked appointment of former president Lula to a cabinet post as Chief of Staff to president Rousseff. Lula has been indicted of corruption. Under Brazilian law, a cabinet member cannot be criminally prosecuted. Brazilian market has been rocketing on the hopes that the present government will fall.
Smart Money is likely selling gold. The momo crowd is aggressively buying silver; Smart Money is stepping in to lightly sell silver on strength. The rationale behind buying silver is that silver has lagged and now it is silver’s turn to catch up.
Oil continues its march up encouraged at the prospects of an oil freeze supposedly to be finalized at an April meeting of oil producing countries.
Emerging market currencies are getting stronger. Overnight yen became extremely strong, at one point climbing above 111 to the U. S. dollar. Japanese stocks are taking a hit on strong yen. Euro is holding its gains against the dollar.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1251, silver futures are at $16.00, and oil futures are $42.31.
S&P 500 resistance levels are 2063, 2100 and 2111; support levels are 2017, 1962, and 1920.
DJIA futures are up 47 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
A MAJOR SHIFT AT FED WITH MAJOR IMPLECATION
This is what you need to know today.
On the surface, not much has changed at the Fed. However digging beneath the surface shows a major shift with big implications for investors. We will be publishing more on this in the near future.
Gold, oil and other commodities are screaming higher. We are switching over to April oil contract as it offers the most liquidity.
Dollar is falling and emerging market currencies are going higher.
Interest rates and bonds are falling.
Equities are uncertain.
The foregoing is the result of the shift at the Fed.
Often the first reaction of the markets to the Fed is wrong. We will patiently wait to see if the first reaction is sustained or it changes.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1267, silver futures are at $15.95, and oil futures are $40.82.
S&P 500 resistance levels are 2038, 2063 and 2100; support levels are 1962, and 1920, and 1909.
DJIA futures are up 1 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest
WILL FED SUCCESSFULLY THREAD THE NEEDLE?
This is what you need to know today.
The Fed will release its policy statement at 2:00 pm ET after a two day FOMC meeting. There will be a press conference with Yellen at 2:30 pm.
Will Fed be able to successfully thread the needle? On one side are global growth concerns. On the other side, inflation is beginning to raise its head in the United States.
This morning, February Core Consumer Price Index (CPI) came at 0.3% vs. 0.1% consensus.
Gold, silver and bonds are holding steady.
Dollar has strengthened against the yen after BOJ’s Kuroda said that Japan could drop its key rate to -0.5%. Dollar also climbed against the pound after Osborne lowered U. K.’s growth outlook in his annual budget.
Oil is attempting to stage a rally ahead of release of DOE inventory numbers. API inventory data was better than the consensus.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1230, silver futures are at $15.25, and oil futures are $37.19.
S&P 500 resistance levels are 2017, 2038, and 2063; support levels are 1962, 1920, and 1909.
DJIA futures are down 40 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
GOLD FALLS, BOJ HOLDS THE LINE, WEAK RETAIL SALES, RUSSIA TO PULL OUT OF SYRIA
This is what you need to know today.
In yesterday’s Morning Capsule we wrote,
As gold and silver power ahead, caution is warranted; according to CFTC data, net long speculative positions in gold are at a very high level. Such high levels typically lead to exhaustion among buyers and a consequential pull back.
Since the time of that writing, gold has fallen about $30. and silver has fallen about $0.60 or about 4%. You may ask, “What is the reason for the fall?” It is exactly what we stated before the fall started, buyer exhaustion.
Bank of Japan held the line and did not push rates further into the negative territory.
Russia has announced that its objectives have been met and will start pulling out of Syria. Oil is falling on this new development.
In the U. S., PPI was in line but Retail Sales were weaker than the consensus.
Commodity currencies such as those of Australia, Canada and Malaysia are weak as commodity rally seems to be stalling.
Interest rates and bonds are range bound.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1236, silver futures are at $15.29, and oil futures are $36.14.
S&P 500 resistance levels are 2017, 2038, and 2063; support levels are 1962, 1920, and 1909.
DJIA futures are down 88 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
IRAN SENDS OIL LOWER, MAJOR CENTRAL BANK’S STATEMENTS AHEAD
This is what you need to know today.
Oil is falling on insistence by Iran that it will bring production back to its pre-sanctions level. There is major support in WTI in the zone of $36.50 to $37.00.
Industrial production in Eurozone came at 2.1% vs. 1.7% consensus.
Stocks in Germany are moving higher on defeat of Merkel in state elections by anti-immigration parties.
Bank of Japan will issue its policy statement tomorrow. The consensus is that BOJ will hold its deposit rate at -0.1%.
Fed will release its policy statement Wednesday. The consensus is no change in interest rates.
Silver is being aggressively bought by momo crowd and quants. The rationale by quants is that silver has lagged gold and its time to catch up. As gold and silver power ahead, caution is warranted; according to CFTC data, net long speculative positions in gold are at a very high level. Such high levels typically lead to exhaustion among buyers and a consequential pull back.
Euro is finding support at $1.11 due to option expiration.
Bonds and interest rates are range bound.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1258, silver futures are at $15.74, and oil futures are $37.50.
S&P 500 resistance levels are 2038, 2063, and 2100; support levels are 1920, 1909, and 1900.
DJIA futures are down 27 points.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider continuing to hold existing positions. Based on individual risk preference, consider holding cash 26 – 42%, and short to medium-term hedges of 25%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
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