(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
BLOW OUT JOBS REPORT, SHORT SQUEEZE STARTS IN GOLD BUT ENDS IN OIL
This is what you need to know today.
Non-Farm Private Payrolls came at 197K vs. 185K consensus.
A short squeeze is starting in gold, silver and bonds.
Short squeeze in oil has ended and now oil is falling like a rock. OPEC failed to take any meaningful steps to prop up oil.
Our very, very short-term early stock market indicator is negative.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 30-50% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1069, silver futures are at $14.24, and oil futures are $40.14.
S&P 500 resistance levels are 2063, 2100, and 2111; support levels are 2038, 2017, and 2000.
DJIA futures are down 7 points.
Individual Trades
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Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
ECB DISAPPOINTS, SHORT SQUEEZE IN EURO, CHALLENGE FROM SAUDIS AND BRAZIL IMPEACHMENT
This is what you need to know today.
ECB cuts its bench mark interest rate by 10 basis points to -0.3%. However, this action is less than the consensus expectations. The result is a short squeeze driving euro higher and dollar weaker. Also triggering a short squeeze in gold, silver, and copper.
Saudis are throwing a challenge at other producers to cut oil production ahead of tomorrow’s OPEC meeting in Vienna. Oil is showing a modest bounce on the news.
In Brazil, impeachment proceedings have begun against the President Rousseff. Brazilian stocks are likely to move higher.
Interest rates are ticking up.
Stocks have been running up in the pre-market on ECB expectations. However, since ECB action was weaker than expectations, stocks are likely to give up some of the early gains.
Our very, very short-term early stock market indicator is neutral.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 30-50% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1055, silver futures are at $14.07, and oil futures are $40.52.
S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.
DJIA futures are up 27 points.
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.
ISM INDICATES RECESSION BUT ADP INDICATES EXPANSION
This is what you need to know today.
ISM Manufacturing Index came at 48.6% vs. consensus of 50.5%. A number below 50 is considered indicating a recession. This is the sharpest contraction since the great recession of 2008 – 2009.
ADP Employment Change came at 217K vs. 185K consensus. This indicates strong expansion.
What Do Dueling Indicators Mean For Practical Purposes?
For investors, the two sides of the coin are risk and reward. Astute investors focus on generating high risk adjusted returns and that is exactly the focus at The Arora Report.
Risks are rising even though the stock market is ignoring them temporarily. The reason the stock market is ignoring the risks is because the mechanics of money managers chasing performance to make higher bonuses is on until the year-end. This is great for day traders from the long side. However, astute investors should be doing exactly what the Smart Money is doing — lightening up on positions as the market rises, and buying only special opportunities.
Gold, Oil and Interest Rates
Oil briefly fell below $41.
Gold was bought in China as the government announced incentives to artificially prop up the property market. Shanghai stocks also rose about 2% in response to the government move. However gold is falling out of bed on strong ADP data.
Our very, very short-term early stock market indicator is negative.
What To Do Now?
Typically on the rush of new money into the market, the market rises in early December only to be followed by a swoon which is followed by a year-end rally. If a swoon occurs, our plan will be to take advantage of the swoon to do select buying and to take profits on select shorts.
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 30-50% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1057, silver futures are at $14.02, and oil futures are $41.03.
S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 20 points.
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.
WEAK DATA FROM CHINA LIFTS SENTIMENT ON STOCKS AND GOLD
This is what you need to know today.
China’s Manufacturing PMI fell to a three-year low to 49.6 vs. 49.8 consensus. As the news was released, stocks in Asia jumped and so did gold. Positive sentiment has carried through to Europe and now to the U. S.
Bull’s reasoning is that weak data will mean more stimulus.
In our analysis, more stimulus is unlikely on this data at this time. As more professionals come to work in the U. S. they are apparently reaching the same conclusion. The result is a pull back in stocks and gold from their highs.
Oil has broken major support at $41.80.
Please note that we have switched over the February contract for gold, March contract for silver, and also March contract for bonds.
Interest rates are range bound.
Dollar is slightly weaker.
Our very, very short-term early stock market indicator is neutral but market is likely to start out positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 30-50% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1068, silver futures are at $14.17, and oil futures are $41.62.
S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.
DJIA futures are up 61 points.
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.
$1 TRILLION SET TO FLOW TO CHINA, RUMORS GALORE IN OIL, ECB ANTICIPATION BUOYS STOCKS
This is what you need to know today.
IMF appears to be set to add China’s yuan to reserve currency status. Up to $1 trillion may start moving to China. On a macro basis as well as on a fundamental basis, there are many opportunities arising from the IMF move. However, do to massive manipulation of the markets by the Chinese government, risks are also very high. An example is massive buying of yuan in offshore markets by Chinese government this morning.
From this IMF move, attractive opportunities, both on risk and reward, are bound to arise in due course. When such opportunities arise, they will be published on the Real Time Feeds of our appropriate services.
OPEC meets this week. In advance of the meeting, both bulls and bears will float rumors. Also various OPEC countries will issue statements to advance their agenda. Expect a lot of volatility in the oil market. We cannot predict the rumors but we can tell you with certainty the following:
- Professional traders are piling on the long side. Paradoxically when everyone piles on the same side, that side tends to become a loser.
- As we have been consistently telling you since oil was above $100, the world is awash in oil. On fundamental basis, right now oil should be trading in $30s.
As a full disclosure, we have taken profits on the short position on oil in ZYX Short. Majority of our very profitable hedge using inverse ETF SCO is still in place in ZYX Buy.
Stocks are buoyed in anticipation of monetary easing by the ECB this week.
Seasonally, this is also a positive period for stocks.
Gold and silver are attempting to rally.
Interest rates are ticking up as investors sell bonds and buy stocks.
Euro has fallen below $1.06.
Our very, very short-term early stock market indicator is neutral but the market is likely to start out positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 30-50% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1058, silver futures are at $14.06, and oil futures are $42.19.
S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.
DJIA futures are up 24 points.
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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