WEEKLY MARKET DIGEST: KING DOLLAR ON THE MARCH, SHORT SQUEEZE IN STOCKS, SMART MONEY SELLS GOLD AND OIL $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

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WEEKLY MARKET DIGEST: KING DOLLAR ON THE MARCH, SHORT SQUEEZE IN STOCKS, SMART MONEY SELLS GOLD AND OIL $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

 

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.

 

1:15 PM ET TEE TIME, GOLD AND OIL BREAK SUPPORT

This is what you need to know today.

1:15 PM ET

Before the long weekend, normally today would have been a quiet day with seasonal upward bias.  However this time Yellen speaks at 1:15 pm. Please see yesterday’s Morning Capsule.

Gold

Gold has broken another support at $1220.  Momo crowd continues to aggressively buy as they have proclaimed the correction to be over.  The next major support is at $1200.  Expect the momo crowd to become even more aggressive in their buying.

Smart Money is inactive.

Oil

Oil has broken support at $49.  Yesterday we had pointed out to you that it was struggling at $50.  Momo crowd continues to aggressively buy looking at this pull back as a buying opportunity.  Smart Money was aggressively selling yesterday after oil broke $50 on the downside.

Markets

Interest rates and bonds are range bound.

Dollar is getting stronger especially against euro.

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

Gold futures are at $1217, silver futures are at $16.26, and oil futures are $48.78.

S&P 500 resistance levels are 2100, 2111 and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are down 3 points.

 

YELLEN SPEECH AHEAD, SHORT SQUEEZE CONTINUES, OIL AT $50 AND GULF BONDS

This is what you need to know today.

Yellen Speech Ahead

Yellen will be speaking tomorrow at an award ceremony. She may chose not to over shadow the celebrations by speaking about monetary policy and interest rates.  However, if she opens her mouth on these subjects, the positioning of the markets is such that major moves can occur.

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Short Squeeze Continues

Short squeeze in stocks continues.  Momentum is likely to carry forward to this morning.

Oil Struggles At $50

Oil is above $50 but is struggling at this resistance.  It is always instructive to see how price performs at major resistance and support levels.  Oil covered the last mile through a short squeeze and taking out stops of shorts.  Now it needs real buying to move higher.  As of this writing such buying has not come in with the exception of momo crowd buying.  Buying by momo crowd is usually not based on deep analysis and up move in prices because of momo crowd buying typically does not last.

Gulf Bond Thirst

In a surprise Qatar sold $9 billion of euro bonds, expectations were for sale of $4 billion.

Markets

Momo crowd has once again declared that correction in gold is over.  Buying by the momo crowd is especially aggressive in silver.

There was a big mystery buyer in yen.  The buying is leading to a slightly weaker dollar.

Interest rates and bonds are range bound.

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

Gold futures are at $1228, silver futures are at $16.52, and oil futures are $50.07.

S&P 500 resistance levels are 2100, 2111 and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are up 37 points.

 

SHORT SQUEEZE IN STOCKS AND 50% PROBABILITY OF RATE INCREASE

This is what you need to know today.

Short Squeeze

In the Mornings Capsule yesterday we shared with you that the new survey data related to Brexit was generating positive sentiment and our very, very short-term indicator was positive.  At 10:00 am ET housing data was released.  This data was very strong.  As stocks moved higher, short squeeze took hold.  Wall Street was positioned on the short side and had to scramble.

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Just based on momentum the market will start out positive.  Days leading to Memorial Day are also historically positive.  However, short squeeze rallies often tend to fizzle out unless there is a new positive fundamental development.

Rate Hike

Now there is a 50% probability of a rate hike in July and a 38% probability in June.

Oil

Oil ran after APT Inventory Data came a -5.1 million vs. consensus of -3.3 million.

EIA data which is considered more authoritative will be released at 10:30 am ET.  It is not clear if the data is going to make any difference as the momo crowd is aggressively buying oil.

Markets

Momo crowd is finally lightly selling gold and putting the money into oil.

Dollar continues to be strong.

Interest rates and bonds are range bound.

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

Gold futures are at $1220, silver futures are at $16.27, and oil futures are $49.05.

S&P 500 resistance levels are 2100, 2111 and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are up 50 points.

 

KING DOLLAR ON THE MARCH, BREXIT WORRIES EASE AND SMART MONEY SELLS GOLD

This is what you need to know today.

King Dollar

King dollar is on the march.  Dollar is attempting to break out of resistance against most currencies.  It is especially strong against euro.

Brexit

Sentiment towards stocks is turning positive as Brexit worries are easing.  A new survey shows that older people in Britain are switching sides from leaving to staying in Europe.

Markets

The momo crowd continues to aggressively buy oil, gold and silver.  Smart Money continues to sell all three.

Under pressure from Smart Money gold has broken support at $1240.

Interest rates and bonds are range bound

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

See also  PRUDENT INVESTORS WATCHING SEMICONDUCTORS FOR A SIGN OF A PULLBACK, GOLD HITS ALL TIME HIGH

Gold futures are at $1237, silver futures are at $16.31, and oil futures are $48.16.

S&P 500 resistance levels are 2063, 2100, and 2111; support levels are 2038, 2017, and 2000.

DJIA futures are up 94 points.

 

G7 FAILS, IRAN DASHS HOPES OF OIL BULLS, AND YEN RISES

This is what you need to know today.

G7

G7 meeting failed in that they came up with no new ideas to spur global growth.

Oil

Iran again issued a statement that it will not agree to increasing output.  This is dashing hopes of oil bulls.  Oil is falling.

Yen Rises

Yen is rising from near this month’s low due to biggest Japanese trade surplus in six years.

Markets

Momo crowd is still aggressively buying gold and silver but its buying is being met by selling from Smart Money.

Iron ore prices are falling as the commodity fever in China is cooling.

Interest rates are range bound.

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

Gold futures are at $1247, silver futures are at $16.39, and oil futures are $47.56.

S&P 500 resistance levels are2063, 2100, and 2111; support levels are 2038, 2017, and 2000.

DJIA futures are down 4 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 30 – 42% of assets in cash or treasury bills, and short to medium-term hedges of 30% of non-cash positions.

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