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.
THE INSANITY IS BACK AGAIN, MASSIVE SHORT SQUEEZE IN SILVER
This is what you need to know today.
The Insanity
The market insanity of running up both safe haven and risk assets at the same time is back again. Since the markets are supposed to be a discounting mechanism for future events, the message of the markets is that simultaneously great prosperity will breakout across the world and there will be great calamity affecting the whole world. Obviously these two scenarios are contradictory, hence the insanity.
When the markets are this confused, it is best to be cautious. Please scroll to ‘What To Do Now’.
Silver Short Squeeze
Yesterday morning we shared with you that our algorithms were detecting aggressive buying in silver. Overnight, a major short squeeze started in silver running it up as high as $19.45 before backing off.
Markets
As we have previously written, the 1st and 5th of July are often positive days followed by weakness.
After languishing, gold is moving up in sympathy with silver.
Oil, currencies, interest rates and bonds are range bound.
Our very, very short-term early stock market indicator is negative even though from a seasonality point of view today is often a positive day.
Gold futures are at $1338, silver futures are at $19.33, and oil futures are $48.13.
S&P 500 resistance levels are 2100, 2120 and 2132; support levels are 2063, 2038, and 2017.
DJIA futures are down 10 points.
BRITISH STOCKS RECOVER ALL OF BREXIT LOSSES AND POST 3.12% GAIN FOR THE QUARTER, AGGRESSIVE BUYING IN SILVER
This is what you need to know today.
Dramatic Announcement
In a dramatic announcement, Boris Johnson, leader of the ‘leave’ camp in U. K. has announced that he is not seeking the office of prime minister.
British stocks have recovered all of their Brexit related losses. If that is not stunning enough, it is remarkable that British stocks have just posted a 3.12% gain for the quarter.
For most investors, the learning here is that you cannot make investments successfully based on opinions formed from the main stream news media.
Silver
Momo crowd is aggressively buying silver. Smart Money is absent.
Markets
Momo crowd continues to aggressively buy oil but Smart Money is selling into the strength.
Momo crowd continues to aggressively buy gold but Smart Money is selling into the strength.
Interest rates, bonds and currencies are range bound.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1320, silver futures are at $18.46, and oil futures are $48.95.
S&P 500 resistance levels are 2100, 2120 and 2132; support levels are 2038, 2017, and 2000.
DJIA futures are down 3 points.
BRITISH STOCKS RECOVER ALL OF BREXIT LOSSES AND POST 3.12% GAIN FOR THE QUARTER, AGGRESSIVE BUYING IN SILVER
This is what you need to know today.
Dramatic Announcement
In a dramatic announcement, Boris Johnson, leader of the ‘leave’ camp in U. K. has announced that he is not seeking the office of prime minister.
British stocks have recovered all of their Brexit related losses. If that is not stunning enough, it is remarkable that British stocks have just posted a 3.12% gain for the quarter.
For most investors, the learning here is that you cannot make investments successfully based on opinions formed from the main stream news media.
Silver
Momo crowd is aggressively buying silver. Smart Money is absent.
Markets
Momo crowd continues to aggressively buy oil but Smart Money is selling into the strength.
Momo crowd continues to aggressively buy gold but Smart Money is selling into the strength.
Interest rates, bonds and currencies are range bound.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1320, silver futures are at $18.46, and oil futures are $48.95.
S&P 500 resistance levels are 2100, 2120 and 2132; support levels are 2038, 2017, and 2000.
DJIA futures are down 3 points.
EXPECT STRONG BOUNCE FROM OVERSOLD CONDITION ON QUARTER-END WINDOW DRESSING
This is what you need to know today.
Expect Strong Bounce On Window Dressing
Most money managers report to their clients on a quarterly basis. In an attempt to provide the best dressed portfolio to their clients, money managers tend to push stocks up or down at the end of the quarter. In yesteryears this used to happen on the last day of the quarter. After regulators started scrutinizing this practice with a jaundiced eye, money managers moved their window dressing to earlier days. Expect today to be the strongest day of window dressing leading to a strong bounce from the oversold condition.
GDP Revision
Q1 GDP has been revised to 1.1% from 0.8% vs. 1.0% consensus.
More importantly GDP Deflator came at 0.4% vs. 0.6% consensus. GDP Deflator is an indication of inflation that the Fed watches very carefully. Lower number adds to the argument of no rate increase.
Markets
Our very, very short-term early stock market indicator is positive.
Smart Money selling of gold has changed from light to moderate. Momo crowd continues to buy gold. For the time being, temporarily, Smart Money is winning the battle and gold is being pushed down.
Smart Money continues to lightly sell oil and momo crowd continues to aggressively buy oil. Temporarily momo crowd is winning and oil is being pushed up.
Yen is weaker on comments by Japanese officials.
British pound is bouncing from oversold condition.
Interest rates are slightly ticking up and bonds are slightly lower.
Gold futures are at $1316, silver futures are at $17.76, and oil futures are $47.57.
S&P 500 resistance levels are 2017, 2038 and 2063; support levels are 2000, 1962, and 1920.
DJIA futures are up 224 points.
SPAIN REFUSES TO GO WITH INSURGENTS POST BREXIT, JAPAN RALLIES, U. S. TO MEDIATE IN EU, BREXIT MAY NOT HAPPEN
This is what you need to know today.
Positive News From Spain
Unlike the U. K. there is positive news from Spain. Election results show that Spanish voters refused to go the insurgents. Acting Prime Minister Rajoy has emerged in a strong position to form the government. If Rajoy ends up forming a government, at least for the time being, pro-EU forces would have won in Spain.
Japan Rallies
Overnight in Japan, Nikkei 225 rallied 2.39%. Japanese market has recently been a harbinger of things to come in other markets.
Mediation
The United States has rapidly move to informally mediate in EU crisis. Secretary of State Kerry is making a visit to London and Brussels.
Brexit May Not Happen
Brexit is not a done deal. Various forces are coming into play to stop Brexit or make Brexit in name only. Such developments need to be closely tracked. If we are able to decipher early that Brexit may not materialize, there will b opportunities for historic returns.
Markets
Early morning rally in gold and silver was met with a fair amount of selling by Smart Money.
Smart Money has been aggressively selling oil.
Interest rates and bonds are range bound but European bonds are rising.
British pound is weaker and yen is stronger.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1331, silver futures are at $17.82, and oil futures are $46.75.
S&P 500 resistance levels are 2017, 2038 and 2063; support levels are 2000, 1962, and 1920.
DJIA futures are down 96 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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