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.

BIGGEST INFLOWS SINCE MARCH 2008 JUST BEFORE THE CRASH

To gain an edge, this is what you need to know today.

Biggest Inflows

Please click here for a chart of Dow Jones Industrial Average ETF (DIA) which represents Dow Jones Industrial Average (DJIA).

Note the following:

This is a monthly chart giving investors a long term perspective.
Since we have a large number of new subscribers, it is worth reminding that we are politically agnostic. Our sole job is to help investors.
In one week ending this past Wednesday, $22.9 billion flowed into stock funds.
This is the biggest weekly inflow since March 2008.
In 2008, after big inflows into the stock market happened, the stock market crashed. Most well structured conservative portfolios lost one-half of their value. Momo stocks lost 80 – 95% of their value.
In 1999 and early 2000, inflows into stocks spiked up. In 2000 the stock market crashed. Momo stocks lost 80 – 100% of their value.
In 1987, inflows into stocks spiked up. In October 1987 the stock market crashed losing 22% in one day.
The chart shows money inflows spike in 2008 and now.
Does the foregoing mean that the stock market is about to crash? Well, this time is truly different. Never before in the history of the United States has there been such a level of reckless money printing and borrowing. A large part of the money that is being printed and borrowed is flowing into the stock market.
If the recklessness that has already occurred was not enough, Powell is deadset to keep on printing money irrespective of the data and Biden is deadset to become the President to preside over the largest borrowing in history irrespective of the data.
It is not just the Democrats, Republicans have lost all credibility of being a fiscally responsible party.

Afternoon Capsule

Monday is a stock market holiday. Our offices will close early today. There will be no Afternoon Capsule.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial) buying stocks in the early trade. Smart money is 🔒.

Gold

The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒 oil in the early trade. Smart money is🔒.

For longer-term, please see oil ratings.

Markets

Our very, very short-term early stock market indicator is 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking up and bonds are ticking down.

The dollar is stronger.

Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.

Gold futures are at $1812, silver futures are at $27.06, and oil futures are $57.98.

S&P 500 futures resistance levels are 3920, 4000 and 4200: support levels are 3860, 3800 and 3630.

DJIA futures are down 42 points.

Protection Bands and What To Do Now?

It is important for investors to look ahead and not in the rearview mirror.

Consider continuing to hold existing positions. Based on individual risk preference, on dips, consider holding 🔒 in cash or treasury bills or short-term bond funds or allocated to short-term tactical trades and short to medium-term hedges of 🔒 and short term hedges of 🔒. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, total cash level should be more than stated above but significantly less than cash plus hedges.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.

POWELL GIVES AMMUNITION TO THE MOMO CROWD FOR RECKLESS BUYING

February 11, 2021

To gain an edge, this is what you need to know today.

Ammunition For Reckless Buying

Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark for the stock market index (SPX).

Note the following:

Fed Chair Powell has provided significant ammunition to the Democrats for a big stimulus program.
Powell is not concerned about inflation.
Powell believes that if inflation rises, it will only be temporary.
Powell believes that any increase in inflation readings over the next few months will be meaningless.
Powell does not want to think about removing the stimulus.
Democrats are using Powell’s Q&A as ammunition to justify $1.9 trillion reckless borrowing.
The momo inturn is getting excited about buying more because Powell clearly supports the stock market bubble getting bigger.
The chart shows that RSI is very overbought. This indicates that the market is vulnerable to the downside.
The chart shows micro support is nearby. Investors may want to see if the support is broken.
The chart shows that volume is not high. This is negative.
All of the analysis may fail but should not be ignored because there may be a ‘sell the news’ reaction to $1.9 trillion free money.
At the same time, investors need to stay invested because a lot of new money is about to flood the market.
To properly navigate the situation, consider following the ‘Protection Bands and What To Do Now?’

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 stocks in the early trade. Smart money is 🔒.

Gold

The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒oil in the early trade. Smart money is 🔒.

For longer-term, please see oil ratings.

Markets

Interest rates are ticking down and bonds are ticking up.

The dollar is weaker.

Gold futures are at $1843, silver futures are at $27.17, and oil futures are $58.58.

S&P 500 futures resistance levels are 3920, 4000 and 4200: support levels are 3860, 3800 and 3630.

DJIA futures are up 53 points.

MOMO SMALL CAP FRENZY SETUP FOR A CORRECTION BUT FREE MONEY MAY STOP IT

February 10, 2021

To gain an edge, this is what you need to know today.

Buying Frenzy

Please click here for a chart of small-caps ETF (IWM).

Note the following:

The chart shows that momo crowd’s buying frenzy is about to reach an extreme.
The chart shows trendlines and the latest acceleration.
The chart shows that the volume is low during the latest acceleration. This is a negative.
The chart shows that RSI is very overbought.
Historically, the collective pattern shown on the chart precedes a painful correction.
This time it is different in that the momo crowd is about to get more free money to invest in speculative stocks.
Hedge funds have been frontrunning the potential buying of the momo crowd when they get the free money.
It is conceivable that hedge funds start taking profits into the strength and if they do, that may be the start of a correction.

Consumer Price Index

Core CPI came at 0.0% vs. 0.2% consensus.

Headline CPI came at 0.3% vs. 0.4% consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 stocks in the early trade. Smart money is 🔒.

Gold

The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.

For longer-term, please see oil ratings.

Markets

Interest rates are ticking down and bonds are ticking up.

The dollar is weaker.

Gold futures are at $1852, silver futures are at $27.47, and oil futures are $58.52.

S&P 500 futures resistance levels are 4000 and 4200: support levels are 3920, 3860 and 3800.

DJIA futures are up 137 points.

COMMODITIES INDICATE STOCK MARKET PRIMED FOR A CORRECTION

February 9, 2021

To gain an edge, this is what you need to know today.

A Correction

Please click here for a chart of commodities ETF (PDBC)

Note the following:

PDBC is in ZYX Allocation portfolio.
The chart shows that commodities have been in an uptrend.
The chart shows the uptrend is accelerating.
The prevailing wisdom is that the government running amuck, giving away free money, reckless borrowing and excessive money printing has no consequences.
The rise in commodities is an early indication that the prevailing wisdom may be proven wrong.
The momo crowd is not going to give up the ghost of buying aggressively the most speculative parts of the market until they suffer massive losses.
A large part of the speculation is driven by the free money that the government has already provided.
Now Biden is ready to send larger amounts of free money with a $1.9 trillion stimulus package financed with borrowing.
There will need to be several inflation indicators heating up to counter the free money for smart money to start selling aggressively.
The time period for such inflation indicators is starting now and will extend to the end of this year.
Please be sure to pay attention to the ‘Protection Bands and What To Do Now?’ section below.
Short positions have not been unwound yet. More short squeezes can be engineered to keep the market levitating.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒 stocks in the early trade. Smart money is 🔒.

Gold

The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

The momo crowd is 🔒 oil in the early trade. Smart money is🔒.

For longer-term, please see oil ratings.

Markets

Interest rates are ticking down and bonds are ticking up.

The dollar is weaker.

Gold futures are at $1847, silver futures are at $27.68, and oil futures are $57.75.

S&P 500 futures resistance levels are 3920, 4000 and 4200: support levels are 3860, 3800 and 3630.

DJIA futures are down 78 points.

CONSERVATIVE INVESTORS APPALLED — MUSK CREATES A SEMINAL MOMENT BEYOND TESLA

February 8, 2021

To gain an edge, this is what you need to know today.

Seminal Moment Or More Craziness?

Please click here for a chart of MicroStrategy (MSTR).

Note the following:

Tesla has invested $1.5 Billion in bitcoin.
Presumably Tesla bought bitcoin at very high prices.
Conservative investors are appalled at Musk’s move.
Musk was probably motivated by looking at the chart of MSTR. MSTR is a provider of business intelligence software.
MSTR’s chart shows that MSTR stock has rocketed not because the company substantially increased its earnings or developed a new product, but because it put its money in bitcoin.
The chart shows a significant gap up in MSTR stock on TSLA news.
TSLA move has the potential to open the flood gates for cryptocurrencies.
Bitcoin is hitting an all-time high.
Musk is also pushing dogecoin (DOGE.X).
While Musk is being heralded by bitcoin owners, conservative investors are appalled.
There are now two distinct schools of thought. One is that it is a seminal moment indicating the dawn of a new era. The second is that this is pure craziness and potentially indicates a stock market top.
In our analysis, it is too early to tell. Investors simply need to keep a careful eye.
The best way to keep an eye on the situation is to watch the chart of MSTR.

Momo Crowd And Smart Money In Stocks

The momo crowd is 🔒stocks in the early trade. Smart money is🔒.

Gold

The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.

For longer-term, please see gold and silver ratings.

Oil

Oil is breaking out. The momo crowd is 🔒oil in the early trade. Smart money is 🔒.

For longer-term, please see oil ratings.

Markets

Our very, very short-term early stock market indicator is positive but can turn 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking up and bonds are ticking down.

The dollar is slightly weaker.

Gold futures are at $1825, silver futures are at $27.20, and oil futures are $57.57.

S&P 500 futures resistance levels are 4000 and 4200: support levels are 3920, 3860 and 3800.

DJIA futures are up 132 points.

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