WEEKLY STOCK MARKET DIGEST: HAS GOLD PERMANENTLY LOST ITS LUSTER TO BITCOIN?

By Nigam Arora & Dr. Natasha Arora

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 ‘Protection Bands and What To Do Now.’

END OF THE PANDEMIC NEAR — ANTIVIRAL WITH 89% EFFICACY

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

Antiviral

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

Note the following:

  • The chart shows the market is moving higher on antiviral news from Pfizer ().
  •  antiviral reduces the risk of hospitalization by 89%.
  • PFE data is better than the antiviral data from Merck () and appears to have a better safety profile.
  • Stay-at-home stocks and vaccine stocks are falling.
  • Economy opening stocks are opening up.
  • The chart shows that the market has now reached well within the channel.

Jobs Report

Non-Farm Private Payrolls came at 604K vs. 390K consensus.

The Headline Non-Farm Payrolls came at 531K vs. 400K consensus.

Average Hourly Earnings rose 0.4% vs. 0.4% consensus.

This data is very strong and argues that the Fed is way behind the curve. Will the Fed wake up? If the Fed wakes up, it will be a negative for the stock market. The stock market has been rising, in large part, due to Fed policies of money printing and low interest rates.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is 🔒.  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 $1798, silver futures are at $23.93, and oil futures are at $79.92.

S&P 500 futures resistance levels are 4713  and 4900: support levels are 4600, 4460, and 4400.

 futures are up 136 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, 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, the 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.

THE ABSURDITY OF PRINTING MONEY TO FIGHT INFLATION PRODUCES A RARE SIGNAL ON THE CHART

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

The Absurdity

Please click here for a chart of  Nasdaq 100 ETF ().

Note the following:

  • The Fed has acknowledged that they were wrong about inflation and that inflation is hurting those with less means.
  • One cause of inflation is money printing by the Fed.
  • The ruse that the Fed has used is that they are undertaking this absurdity to help those with less means.
  • The taper means the Fed will print less money but they will still continue to print hundreds of billions of dollars to help those with less means who are being hurt by money printing in the first place.
  • Technology stocks go up when the Fed prints money.
  • The chart shows that the Fed’s absurdity is producing a rare occurrence — RSI has reached 100. 100 is the maximum RSI can reach.
  • The interpretation of RSI at 100 is that the market is extremely overbought and has high potential risk. While the risk is high, RSI of 100 also demonstrates the aggressiveness of the buying. The normal ebb and flow in the stock market usually prevents RSI from reaching 100.  Yesterday this normality was appended by Powell’s extra dovish press conference.
  • At this time, there is no reason for the momo crowd to stop their aggressive buying.
  • Smart money is reluctant to sell because of positive seasonality.

Productivity

The Fed is telling us that inflation will be controlled, in part, by an increase in productivity.

The latest data on productivity is worrisome.  Q3 Productivity fell -5.0% vs. consensus of -1.5%.

Unit Labor Costs

Powell said yesterday that real wages are not rising.

This morning the data shows Q3 Unit Labor Cost rose 8.3% vs. 5.8% consensus.

Jobless Claims

Initial Claims came at 269K vs. 277K 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

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 down and bonds are ticking up.

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 $1792, silver futures are at $23.95, and oil futures are at $82.73.

S&P 500 futures resistance levels are 4713 and 4900: support levels are 4600, 4400, and 4400.

 futures are up 1 point.

THE MESSAGE FROM THE ELECTION FOR INVESTORS CENTERS AROUND FREE MONEY

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

The Message For Investors

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

Note the following:

  • First and foremost, we are politically agnostic. Our sole job is to help investors.
  • The chart shows that the market has reached the low band of the channel.  a positive development for the market.
  • In both Virginia and New Jersey governor elections, Democrats have significantly underperformed and Republicans have significantly overperformed.
  • There are two camps regarding the lesson.
    • One camp believes that Democrats underperformed because they were not able to deliver even more free money than they have already delivered.
    • The other camp believes that Democrats underperformed because the public sees the harm from too much free money being delivered by Democrats.
  • Since the stock market is driven, in part, by the free money, getting a handle on the mood of the public is crucial.  If the public turns against excessive free money, this will be a negative for the stock market in the short term but positive in the long term.
  • As of this writing, there is no clarity regarding the message – it appears that the public is split.

ADP

ADP employment change came at 571K vs. 370K consensus.

The Fed

FOMC will announce its decision at 2:00 pm ET.  It is expected that they will announce a taper.  More important will be any information they provide on future rate increases.

It will be interesting to see if the Fed has woken up to the economic reality and is willing to admit that most of its forecasts have proven to be wrong so far.

Momo Crowd And Smart Money In Stocks

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

Gold

Taper is bad for gold.  Gold is being sold in anticipation of taper.

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

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

Oil

API showed six straight builds in inventories.  API came at a build of 3.594M barrels for the week vs.  consensus of 1.57M barrels.

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 and bonds are range-bound.

The dollar is weaker.

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 $1776, silver futures are at $23.44, and oil futures are at $81.71.

S&P 500 futures resistance levels are 4713 and 4900: support levels are 4600, 4460, and 4400.

 futures are down 77 points.

HAS GOLD PERMANENTLY LOST ITS LUSTER TO BITCOIN?

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

Money Moving Out Of Gold Into Bitcoin

Please click here for a chart of gold ETF ().

Note the following:

  • The chart is a monthly chart to give investors a long term perspective.
  • The chart shows Arora buy signals to back up the truck and buy gold when it was in the $600 range.
  • The chart shows Arora sell signal when gold previously hit $1,904 – this turned out to be the high before gold fell to near $1,000.
  • The chart shows that gold has backed off after hitting the resistance zone.
  • Gold is a hedge against fiat currencies, inflation, geopolitical troubles, and the stock market bubble.
  • Investors are increasingly using bitcoin as a hedge instead of gold.
  • We have seen evidence of money flowing out of gold and into bitcoin.
  • If it was not for bitcoin, conditions were ripe for gold to fly to $2,500.
  • Will gold gain luster again? Has gold only been temporarily tarnished by bitcoin? Our working assumption is that given thousands of years of the history of gold, gold is not permanently damaged and presents an opportunity to buy on dips for the very long term.
  • The Federal Reserve is likely to start tapering soon. This may help the dollar to strengthen.
  • Gold is priced in dollars. If the dollar strengthens, this will put pressure on the price of gold in the short term.

Earnings

Today is the busiest day of earnings reports. So far the market is focusing on good earnings and ignoring the bad earnings.

Fed Meeting

The Fed meeting is starting.  FOMC will announce its rate decision tomorrow at 2:00 pm ET.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is🔒.  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 down and bonds are ticking up.

The dollar is  slightly 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 $1792, silver futures are at $23.90, and oil futures are $83.77.

S&P 500 futures resistance levels are 4713  and 4900: support levels are 4600, 4460 and 4400.

 futures are up 22 points.

FRONT RUNNING BLIND MONEY, CONSUMER BUYING BINGE HELPING STOCKS

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

Consumer Buying Binge

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

Note the following:

  • The chart compares  with consumer discretionary ETF  and internet ETF .
  • The chart shows over the last month  beat  by 8.46%. This is a big difference resulting from the consumer buying binge.
  • Expect the consumer buying binge to accelerate going into Christmas. This is positive for the stock market.

Blind Money

It is the first day of the month. Blind money pours into Wall Street on the first day of the month.  Blind money is the money that gets invested without any analysis and irrespective of market conditions.  Blind money is typically invested in the afternoon.  Professionals are front running by buying ahead of the blind money so that they can sell to the blind money at higher prices.

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

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 slightly weaker.

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 $1790, silver futures are at $24.04, and oil futures are $84.17.

S&P 500 futures resistance levels are 4713  and 4900: support levels are 4600, 4460, and 4318.

 futures are up 103 points.

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Nigam Arora

Nigam Arora

Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.

Dr. Natasha Arora

Dr. Natasha Arora

Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.

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