(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
THE MOTHER OF ALL NUMBERS IS OUT CAUSING FUTHER CONFUSION IN THE MARKETS
This is what you need to know today.
The monthly employment report is the single biggest factor that goes into the decision making at the Fed. The actions of the Fed are the most important factors at this time in moving the markets.
January Employment Report has just been released. The report provides lots of data. Here are the numbers that matter.
- Non-farm Private Payrolls 158K vs. 190K consensus and 170K whisper number
- Unemployment rate 4.9% vs. 5% consensus and 5% whisper number
- Average earnings 0.5% vs. 0.3% consensus and 0.0% whisper number
Number of jobs created is less than the consensus but unemployment rate and earnings are better than the consensus. Hence the confusion.
Here is how markets are reacting to the employment report.
Gold and silver are moving higher but the sentiment is getting overly positive. Overly positive sentiment usually but not always contains the rise in gold.
Dollar is extremely volatile but range bound.
Interest rates are extremely volatile but range bound.
Oil is volatile as shorts typically cover on Friday’s putting upward pressure but fundamentals remain negative. BHI rig count will be announced 1:00 pm ET. Rig count is usually a market moving event.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1159, silver futures are at $14.92, and oil futures are $31.81.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1860, 1838, and 1800.
DJIA futures are down 55 points.
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 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
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.
EU AND COP KILL THE BUDDING RALLY
This is what you need to know today.
The indications from overnight trading and inter-market analysis were that a rally in U. S. stocks would continue today. Then came a shocking announcement from ConocoPhillips (COP) that it is cutting its dividend.
COP is an oil major. A big part of the shareholder base of oil majors is investors seeking safe high dividends. For boards of oil majors, maintaining dividends has been one of the highest priorities. Even with low oil prices, the consensus has been that there would not be any dividend cuts from oil majors in 2016.
The foregoing paragraph explains why COP announcement will hit the entire U. S. stock market hard.
If one punch was not enough, European Union delivered another punch by lowering its growth forecast.
As shocking as these announcements may have been to the market, they are not a surprise to us. In our models, we have already been taking into account strong probability of dividend cuts at oil majors. Our forecast of European growth has already been less than the consensus.
The dollar has weakened on poor ISM Service Data and a comment by a Fed official that indicates the Fed may not raise rates in March.
Gold has moved up about $30 since we upgraded it in the very, very short-term. Soon the following two factor will start restraining the rise in gold.
- Buying by Chinese ahead of the Lunar New Year will be finished.
- The dollar is oversold and likely to start bouncing.
Oil continues to rally on vague rumors of talks between Russians and Saudis.
Interest rates are hanging near lows as money seeking safe haven continues to rush into bonds.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1155, silver futures are at $14.88, and oil futures are $32.14.
S&P 500 resistance levels are 1909, 1962, and 1920; support levels are 1860, 1838, and 1800.
DJIA futures are down 72 points.
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 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
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.
ADP EMPLOYMENT DATA TURNS AROUND STOCKS, CHINESE CONTINUE TO BUY GOLD AND SILVER
This is what you need to know today.
Yesterday, the stock market took a drubbing for four reason.
- Oil was falling
- Lots of fear mongering about banks especially in Europe
- China concerns
- Concerns about potential recession in the United States
ADP Employment Change Data came at 205K vs. 190K consensus. This is a very strong number and runs counter to two of the concerns from yesterday.
China has been temporarily stable.
Oil has been rising in spite of API data on inventory build of 3.8 million barrels vs. 3 million consensus. DOE data on oil inventories will be released at 10:30 am ET.
We will be keeping an eye on gasoline levels. Gasoline inventories are building much faster than the consensus.
Chinese are aggressively buying gold and silver in advance of Lunar New Year.
Our very, very short-term early stock market indicator is positive.
Gold futures are at $1127, silver futures are at $14.38, and oil futures are $30.65.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1900, 1860, and 1838.
DJIA futures are up 80 points.
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 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
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.
OIL FALLS AND STOCKS FOLLOW
This is what you need to know today.
Overnight there has been aggressive selling in oil in Asia. Stocks are following oil lower.
Chinese continue to buy gold and silver.
With stocks falling, money is rushing out of stocks and into bonds.
Dollar is also weakening which may eventually turn U. S. stocks around.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1128, silver futures are at $14.35, and oil futures are $30.14.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1900, 1860, and 1838.
DJIA futures are down 162 points.
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 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
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.
KUWAIT AND NIGERIA INCREASE OIL PRODUCTION, WEAK ECONOMIC DATA FROM CHINA
This is what you need to know today.
Over the weekend, there are important news items that have not received much attention outside professional oil trading circles. Kuwait and Nigeria have increased oil production.
Nigeria is in deep financial trouble as its forex reserves are depleted. Nigeria is requesting $3.5 billion emergency loan from the W0rld Bank.
Kazakhstan, another oil producer, is raising its bench mark interest rate by 100 basis points to 17%. The dollar has gained over 90% against this currency tenge since the country allowed its currency to float.
Oil is staging a reversal to the downside.
PMI data in China was weaker than consensus. In the last hour, the government came in to buy shares and reduce the loss to 1.78% for the day.
India was up strong most of the trading session but could not withstand pressure coming from China and ended up down 0.18%.
Overnight Chinese were heavy buyers of gold and silver.
Interest rates and currencies are range bound.
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 25-42% 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 $1124, silver futures are at $14.30, and oil futures are $32.55.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1900, 1860, and 1838.
DJIA futures are down 93 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
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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