WEEKLY MARKET DIGEST: LOW CONVICTION RALLY, CHINESE DAY TRADERS IN GOLD AND SILVER, OIL CRASH OVER $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

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   WEEKLY MARKET DIGEST: LOW CONVICTION RALLY, CHINESE DAY TRADERS IN GOLD AND SILVER, OIL CRASH OVER $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.

SLB SAYS OIL CRASH IS OVER, BREXIT HAVOC ON BRITAIN, SLOW GROWTH IN EUROPE, AND CHINESE DAY TRADERS IN PRECIOUS METALS

This is what you need to know today.

Oil Crash

SLB is the largest oil service company in the world.  As such it has valuable insights from its customers. On its earnings conference call, SLB stated that the oil crash is over.

Brexit Havoc

In the  first PMI to be released after Brexit, the number came at 47.7 vs. consensus of 50. This number is now at a seven year low.  This number portends a recession.

Eurozone Growth Slows

Eurozone growth has slowed down to the levels last seen in early 2015.  Germany and France stay strong but other economies weaken.

Manufacturing PMI came at 51.9 vs. 52 consensus.

Gold And Silver

At the start of Chinese market open day traders aggressively bought gold and silver.  However neither were able to sustain gains as Smart Money started selling the up-spikes.

Markets

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

Oil remains under pressure.

Gold, silver, copper, interest rates, bonds, and currencies are range bound.

Gold futures are at $1323, silver futures are at $19.68, and oil futures are $44.82.

S&P 500 resistance levels are 2222, 2200 and 2165; support levels are 2150, 2132, and 2120.

DJIA futures are up 18 points.

KURODA UTTERS THE WORDS ‘NO HELICOPTER MONEY’ AND MARKETS MOVE

This is what you need to know today.

Helicopter Money

Kuroda of the Bank of Japan stated in an interview that he sees no need for ‘helicopter money’ in Japan.  His comments caused yen to rise the most in a month. Dollar fell, gold, silver, copper, and oil had up spikes and stocks spiked lower.  However as of this writing, most of this action is being reversed.

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ECB

ECB, in its first post Brexit meeting, has left interest rates unchanged.

Markets

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

Gold and silver are seeing aggressive buying by momo crowd but Smart Money lightly sold on the up spike.

Smart Money aggressively sold oil on the up spike.

Interest rates are ticking slightly higher and bonds are ticking lower.

Dollar is slightly weaker.

Gold futures are at $1318, silver futures are at $19.41, and oil futures are $45.64.

S&P 500 resistance levels are 2222, 2200 and 2165; support levels are 2150, 2132, and 2120.

DJIA futures are down 33 points.

LOW CONVICTION RALLY CAN GO HIGHER: SMART MONEY SELLS GOLD, SILVER, OIL AND COPPER

This is what you need to know today.

Low Conviction Rally

Our proprietary indicators are showing this rally to be a low conviction rally.  However, due to sentiment, as we have explained previously, there is still decent probability of a rally going higher.

Silver

For the last two days, we have been sharing with you of our algorithms detecting aggressive selling in silver even though price held up.  Today silver has broken down and fallen through strong support in the zone of $19.90 to $20.00.

The foregoing behavior is common in precious metals due to the heavy presence of momo crowd and day traders since about 2010.

Gold

Yesterday, late afternoon, Smart Money aggressively sold gold but the price held up due to momo crowd buying.

This morning gold has broken down to a strong support zone of $1323 to $1327.

Oil

Smart Money aggressively sold oil after release of API Inventory Data.  The data was actually bullish for oil.

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Just like gold, oil held on to its price due to buying by momo crowd on bullish API data.  However this morning oil is being crushed and has fallen through strong support in the zone of $45.20 to $45.50

Markets

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

Copper, nickel, zinc, and iron ore are being sold aggressively.

The dollar is getting stronger.

British pound is being sold.

Yen is still hanging in there.

Interest rates and bonds are range bound.

Gold futures are at $1316, silver futures are at $19.57, and oil futures are $45.01.

S&P 500 resistance levels are 2222, 2200 and 2165; support levels are 2150, 2132, and 2120.

DJIA futures are up 45 points.

GOOD HOUSING STARTS, SELLING IN SILVER, A HIGHER LIKELIHOOD OF RATE INCREASE

This is what you need to know today.

Housing Starts

Housing Starts came at 1189K vs. 1165 K consensus.  Building Permits came at 1153K vs. 1150K consensus.  The interpretation of this data is positive for the U. S. economy.

Silver

Aggressive selling in silver on up-spikes has continued.  It is still not clear who is selling and their motivation behind selling.

Interest Rates

Musings coming out of the Fed indicate that there is higher probability of a rate rise this year than is generally believed.

Japan

Japanese stocks continue to power up with another 1.4% rise overnight.  This is on top of 9.2% gain last week.

Markets

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

Gold, bonds, currencies and oil are range bound.

Gold futures are at $1328, silver futures are at $19.95, and oil futures are $45.86.

S&P 500 resistance levels are 2222, 2200 and 2165; support levels are 2132, 2120, and 2100.

DJIA futures are down 10 points.

FAILED TURKEY COUP, RNC KICK OFF AND SELLING IN SILVER

This is what you need to know today.

Turkey Coup

Coup in Turkey failed.  The present government is becoming even more oppressive.   Turkey being a member of NATO, a front line country in the war against ISIS and key to stemming refugee flow to Europe, is important.  There are serious medium to long-term implications of the coup.  However, markets are likely to ignore these implications for the time being.

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RNC Kick Off

Republican National Conference kicks off in Cleveland today.  After the shooting in Baton Rouge, there will be more emphasis on law and order.  With the exception of a hand full of stocks, expect no influence on broad markets.

Silver

There has been aggressive selling in silver this morning.  It is not clear as to who is selling and the motivation behind the selling.

Oil

Oil is seeing aggressive selling this morning.  We are switching over to September contract as it offers the most liquidity.

Markets

Our very, very short-term early stock market indicator is positive but can quickly turn negative as the market is over bought.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1328, silver futures are at $19.94, and oil futures are $45.97.

S&P 500 resistance levels are 2222, 2200 and 2165; support levels are 2132, 2120, and 2100.

DJIA futures are up 14 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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