WEEKLY MARKET DIGEST: CHINK IN STOCK MARKET & TRUMP HONEYMOON, GOLD BUYING, OIL SQUEEZE OVER $GLD $QQQ $SLV $SPY $USO $BAC $JPM $WFC $BLK

  WEEKLY MARKET DIGEST: FIRST CHINK IN STOCK MARKET AND TRUMP HONEYMOON, AGGRESSIVE BUYING IN GOLD, SHORT SQUEEZE IN OIL OVER $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO $BAC $JPM $WFC $BLK $FHN $FRC $PNC

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights from the prior week gives them an edge over the coming weeks. Here is the day by day rundown from the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers of The Arora Report

Please scroll down for the section What To Do Now.

WEAK RETAIL SALES, INFLATION IN CHECK, YELLEN BULLISH, GOOD EARNINGS

This is what you need to know today.

Weak Retail Sales

December Retail Sales Ex-auto came at +0.2% vs. +0.6%.  In our models we exclude auto sales because they are very volatile and generate a lot of noise.  When the noise is high,  it is not possible to get good signals.  Please click here to learn more about the model.

Of note is that auto sales were very strong.  It appears that many Americans chose to buy new cars for Christmas but bought less of traditional gifts.

Inflation In Check

Core Producer Price Index (PPI) came at +0.2% vs. +0.1% consensus.  PPI carries heavy weight in our models since it is a leading indicator of inflation.  Prices tend to rise at producer level before they rise at consumer level.

Yellen Bullish

Yellen says that she sees no serious short term obstacles to the U. S. economy and inflation is close to 2% target.  Yellen’s statement is bullish.

Good Bank Earnings

This morning has been full of bank and asset management earnings including BAC, JPM, WFC, BLK, FHN, FRC and PNC.  These earnings have generally been in line with expectations.

Gold

Yesterday gold saw a fair amount of selling above the $1200 mark.  As of this writing gold has pulled back to $1196 under intense selling pressure. If dollar stabilizes, expectation will be for gold to make another rally attempt.

Markets

Our very, very short-term early stock market indicator is neutral.

Currencies, interest rates, bonds and oil are range bound.

Gold futures are at $1196, silver futures are at $16.76, and oil futures are $52.69.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are up 22 points.

ANXIETY BUILDS IN STOCKS, DOLLAR SINKS; BONDS, OIL AND GOLD RISE

This is what you need to know today.

Anxiety Builds

Anxiety is building in the stock market after Trump’s press conference yesterday and before bank earnings tomorrow.

There is a lot of talk in trading circles about selling going into the inauguration.  Such talk has become so wide spread that it has the potential to trap bears who are short here and who sell on the slightest dips.

Please scroll down and see ‘What To Do Now’ section.

Dollar Falls

Since Trump’s election the up-move in stocks has been highly correlated with the up-move in the dollar.

The dollar is on a path to have the worst week since November.  The dollar is now at a 5 week low against the yen.

Gold

Gold has crossed $1200 on dollar weakness.

Oil And Natural Gas

Oil is rallying hard on comment from Saudi that it is open to further cuts in production to support prices.

Natural gas is rallying from a very oversold condition in sympathy with oil.

Markets

Our very, very short-term early stock market indicator is negative.

Interest rates are falling and bonds are rising.

Gold futures are at $1201, silver futures are at $16.87, and oil futures are $53.02.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are down 41  points.

REPORT OF RUSSIA HAVING COMPROMISING INFORMATION ABOUT TRUMP OVERSHADOWS MARKETS AND SUPPORTS GOLD

This is what you need to know today.

Compromising Information

Reports of Russia having compromising information about Trump are overshadowing the markets.  Russia has issued a denial.    Trump calls it a ‘witch hunt.’

Trump will give his first press conference since the election at 11:00 am ET today.  Reports of Russia having compromising information about Trump are likely to dominate other substantive issues.

The press conference has a potential to be a major market moving event.  Please stay extra alert to the Real Time Feeds if new opportunities develop or actions are required to protect the portfolios.

Gold Support

Uncertainty caused by the above described reports is supporting gold.

Oil

API reported build of 1.5 million barrels vs. 1.2 million barrels consensus. Oil is waiting for EIA report to be released at 10:30 am ET.

Expectations of a build in EIA report are putting pressure on oil prices.  Since short squeeze has now run its course, support from buying to cover is gone.

Turkey

Turkish lira fell to a new record low trading at 3.8460 to the dollar.  Short sellers are piling on as they do not see the central bank raising rates to stem the lira decline.

Korea

A leader of Samsung Group, Jay Lee, will be questioned by the special prosecutor as a suspect in an expanding corruption scandal that is likely to force President Park out of office.  The insight here is that if Samsung stock falls, it will be a buying opportunity.

Markets

Our very, very short-term early stock market indicator is neutral, it all depends on how Trump’s press conference goes.

Currencies, interest rates and bonds are all waiting for Trump’s press conference.

Gold futures are at $1188, silver futures are at $16.78, and oil futures are $51.16.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are up 4  points.

ANXIETY CREEPS IN AHEAD OF TRUMP NEWS CONFERENCE AND EARNINGS SEASON, GOLD BENEFITS; IRON ORE AND ZINC FLY

This is what you need to know today.

Anxiety

Anxiety is creeping into various markets ahead of Trump’s news conference and earnings season.

Earnings season will get into full swing on Friday.

Trump will hold a press conference for the first time since the election on Wednesday.

Gold And Dollar

Dollar is weakening due to the anxiety.  Gold is benefiting from the anxiety.

Iron Ore And Zinc

China is planning to further reduce steel capacity.  Steel futures in Shanghai jumped 7%.  Iron ore prices are jumping about 8%.  Zinc prices are jumping about 3%.

Markets

Our very, very short-term early stock market indicator is negative.

Gold futures are at $1187, silver futures are at $16.71, and oil futures are $45.00.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are down 17 points.

FIRST CHINK IN STOCK MARKET AND TRUMP HONEYMOON, AGGRESSIVE BUYING IN GOLD, SHORT SQUEEZE IN OIL OVER

This is what you need to know today.

Stock Market And Trump Honeymoon

Stock market and Trump honeymoon continues.  Today there is the first chink in the honeymoon.

San Francisco Fed chief argues that strong jobs data rules out fiscal stimulus advocated by Trump.  He favors emphasis on budget deficit reduction.

It will be interesting to see if politicians start joining the call in big numbers.  Should this happen, that will be an early sign of Trump rally being over.

Interest Rates Fall

Interest rates are falling and bonds are rising in a first sign that bond rout after Trump election may be coming to an end.

Gold

Momo crowd is aggressively buying gold.  Resistance is in the zone of $1182 to $1188.  Next resistance is $1200 to $1218.

The ‘smart money’ is inactive.

Oil

Oil short squeeze that started after OPEC meeting is now over.  Oil falls as emphasis shifts to fundamentals.

Markets

Our very, very short-term early stock market indicator is negative but expect bulls to attempt to drive the market over Dow 20,000.

Gold futures are at $1181, silver futures are at $16.59, and oil futures are $52.92.

S&P 500 resistance levels are 2288, 2300 and 2334; support levels are 2250, 2222, and 2200.

DJIA futures are down 57  points.

WHAT TO DO NOW

Looking ahead and not only in the rear view mirror, consider continuing to hold existing core portfolio positions. Based on individual risk preference, consider 27 – 38% of assets in cash or treasury bills, and short to medium-term hedges of  25% and very short term hedges of 5%.

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