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.’
PROTECT YOURSELF, POLITICIANS TURNING KING DOLLAR INTO POOR DOLLAR
To gain an edge, this is what you need to know today.
Protect Yourself
Please click here for a chart of dollar index ETF (UUP).
Note the following:
- Our government is on a binge to recklessly borrow and print money.
- The prevailing wisdom is that reckless borrowing and money printing is good without any adverse consequences.
- They cite the stock market hitting new highs as proof positive that borrowing and money printing is good.
- Everyone is overlooking that the stock market is controlled by the momo crowd. The momo crowd does not do any serious analysis. The mono crowd just loves borrowing and money printing.
- In the long term, there will be serious consequences from the reckless ways of politicians.
- The reason the United States has been able to get away with reckless policies is because the dollar is the reserve currency of the world.
- The dollar has been known as King Dollar because governments and investors alike across the world have wanted to hold dollars in the past due to the economic strength of the United States.
- The chart shows that the dollar has been declining.
- A careful look at the chart shows that the decline in the dollar is accelerating.
- It is important that investors protect themselves.
- The best way is to structure your portfolio correctly.
Quadruple Witching
Today is quadruple witching. In quadruple witching, stock index futures, futures options, stock options and single stock futures expire.
Quadruple witching may increase volatility.
It appears that some of the strength in the market this week has been due to quadruple witching.
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 🔒 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 🔒neutral. 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 $1890, silver futures are at 26.12, and oil futures are $48.59.
S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.
DJIA futures are up 17 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.
BILLIONAIRES CREATE BITCOIN FRENZY
To gain an edge, this is what you need to know today.
Bitcoin Frenzy
Please click here for a chart of bitcoin (BTC.X).
Note the following:
- The chart shows a breakout.
- On the chart, take a look at the very large move in a couple of days after the breakout.
- From the chart, also note extreme volatility. In 2017, the chart shows that bitcoin surged about 1000% to about $19,000. A year later, it fell to about $3,500.
- The last rally in bitcoin was a pure manipulation of creating a frenzy among mom and pop to buy.
- This time is different. The frenzy was started by billionaires. Now FOMO (fear of missing out) has set in and more billionaires are jumping on the bandwagon.
- There is even a call of bitcoin reaching $400,000.
- The narrative that is being promoted is that the Fed’s policies and the government’s borrowing will make the dollar less valuable and bitcoin is the way to protect yourself.
- Remember this narrative is being promoted primarily by those who have a vested interest in making the bitcoin run-up.
- After creating the frenzy, are these billionaires now selling into the strength to mom and pop?
- All investors should note that bitcoin is not regulated like stocks.
- The trading in bitcoin is very opaque and bitcoin lends itself to easy manipulation.
- A lot of money that would have normally moved into gold is moving into bitcoin.
- The rally in bitcoin has capped the rise in gold.
- Some investors are selling gold to move into bitcoin.
Initial Jobless Claims
Initial Jobless Claims came at 885K vs. 795K consensus. This is a very weak number due to coronavirus cases.
Housing Starts
Housing Starts came at 1.55M vs. 1.53M consensus.
Building Permits came at 1.64M vs. 1.55M 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 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 $1894, silver futures are at $26.05, and oil futures are $48.32.
S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.
DJIA futures are up 95 points.
STIMULUS BREAKTHROUGH — MARKET REACTION NOT WHAT MANY EXPECTED
To gain an edge, this is what you need to know today.
Stimulus Breakthrough
Please click here for a chart of S&P 500 ETF (SPY) which represents stock market benchmark index (SPX).
Note the following:
- There is a report that there is a breakthrough in reaching the stimulus deal.
- A major contentious demand of Republicans has been to include a liability shield. Apparently, the deal leaves this out.
- A major contentious Democrat demand has been state and local aid. Apparently, the deal leaves this out.
- A major contentious demand of progressives has been large direct stimulus checks. Apparently, the checks will be smaller than $1200.
- The expectations were that the stock market would fly on the news.
- As the chart shows, there was initial buying. Initial buying quickly turned into selling.
- The VUD indicator is the most sensitive measure of net supply demand in real-time. The orange indicates net supply and the green indicates net demand.
- The chart shows that the VUD indicator was solid green before the news but turned orange after the news.
- The reason that the market has not flown on the deal is that it appears that McConnell has prevailed in bringing a tiny bit of restraint to the massive borrowing. This market is addicted to massive borrowing. Investors do not like that there may be a tiny bit of restraint.
Retail Sales Slow
After relentless buying by consumers, Retails Sales in November slowed. Retail Sales Exauto came at -0.9% vs. +0.1% consensus. We leave auto out because autos are too volatile and hinder projections.
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 🔒.
The momo crowd is 🔒 silver 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 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 $1855, silver futures are at $25.09, and oil futures are $ 47.44
S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.
DJIA futures are up 12 points.
FED MEETING: MOMO EXCITED ABOUT MORE MONEY PRINTING
To gain an edge, this is what you need to know today.
Fed Meeting
Please click here for a chart of Dow Jones Industrial Average ETF (DIA) which represents the popular stock market benchmark index (DJIA).
Note the following:
- The chart is a monthly chart giving investors a long term perspective.
- FOMC is meeting today and tomorrow.
- The Fed will announce its policy decision at 2:00 pm ET tomorrow.
- There is speculation that the Fed may give guidance on more asset purchases. In plain English, the Fed may print more money.
- The Fed is likely to be ultra bullish about interest rates which of course the market will like.
- The chart walks you through the rise in the Fed’s balance sheet.
- The chart shows that the Fed’s balance sheet stood at $o.87 trillion before the 2008 crisis and now has moved to about $7 trillion.
- The chart shows that RSI is overbought from a long term perspective because this is a monthly chart.
- The chart also shows that this overbought market can easily become more overbought.
Industrial Production
Industrial Production came at 0.4% vs. 0.3% consensus.
Capacity Utilization came at 73.3% vs. 73.0% consensus.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 stock 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 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 $1862, silver futures are at $24.55, and oil futures are $47.26.
S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.
DJIA futures are up 158 points.
MOMO CROWD EXCITED ABOUT VACCINE AND STIMULUS
To gain an edge, this is what you need to know today.
Momo Excited
Please click here for a chart of S&P 500 ETF (SPY) which represents stock market benchmark (SPX).
Note the following:
- The momo crowd is excited about vaccine and stimulus.
- PFE and BNTX vaccine distribution has begun.
- There is more progress on stimulus. The momo crowd always gets excited about the prospect of more borrowing.
- The RSI pattern shown on the chart is positive.
- The price pattern shown on the chart is positive.
- This is not a normal market. This is a bubble getting bigger. In a normal market, the market would have likely sold off on the vaccine and stimulus news because since November the market has already run up a lot on stimulus and vaccine. These developments are already discounted in the price — but to figure this out momo would have to do some analysis. Of course, momo crowd is not going to analyze, they are just going to buy.
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 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 $1835, silver futures are at $24.17, and oil futures are $47.12.
S&P 500 futures resistance levels are 3800 and 4000: support levels are 3630, 3600 and 3520.
DJIA futures are up 229 points.
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