WEEKLY MARKET DIGEST: $110 BILLION PAYOUT CREATING POSITIVE SENTIMENT, CHINA BEAR MARKET $DIA $GLD $QQQ $SLV $SPY $TBT $USO

WEEKLY MARKET DIGEST: $110 BILLION PAYOUT CREATING POSITIVE SENTIMENT, CHINA BEAR MARKET $DIA $GLD $QQQ $SLV $SPY $TBT $USO

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 What To Do Now.

$110 BILLION PAYOUT CREATING POSITIVE SENTIMENT, BOUNCE IN CHINA AND INDIA

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

$110 Billion Payout Creating Positive Sentiment

After the second leg of the stress test, the Fed is allowing large banks to payback their shareholders.  More than 20 banks have announced in excess of $110 billion of payouts through dividends and buybacks.  The U. S. arm of DB is the only bank to fail the exam.  MS and GS are blocked from boosting payouts to shareholders.

Overall this is positive for banks.  This is also generating positive sentiment in the market.

Personal Income And Spending

The U. S. economy is about 70% consumer based. Therefore it is important to pay attention to personal income and spending.

Personal Income came at 0.4% vs. 0.4% consensus.  Personal Spending came at 0.2% vs. 0.2% consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying stocks this morning.

The smart money is lightly buying bank stocks.

China And India

After entering a bear market, Shanghai Composite gained 2.2%.

In India after rupee hitting a new low, Sensex rose 1.1%.

Mexico Election

Mexico goes to the polls this Sunday.  Andres Obrador, who says that the elite has looted the common man, is the front runner.  The election may provide an opportunity in Mexico.

Gold

Trading in gold is listless. Gold is trying to hold the support at $1250.

Oil

Oil continues to see aggressive momo crowd  buying.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is positive.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1252, silver futures are at $16.07, and oil futures are $73.44.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2700, 2688 and 2661.

DJIA futures are up 104 points.

MOMO CROWD GOES INTO THE HYPER YO-YO MODE

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

Momo Crowd Goes Into Hyper Yo-Yo Mode

Yesterday, the stock market lost its gains and went negative when Larry Kudlow said that the administration would not go easy on China.

This morning the momo crowd has gone into the hyper yo-yo mode.  There have been several bouts of momo crowd aggressively selling followed by aggressive buying.  The momo crowd seems to be changing its mind every few minutes.

The smart money is inactive.

Economic Data

Q1 GDP Deflator came at 2.2% vs. 1.9% consensus.

Third Estimate of GDP came at 2% vs. 2.2% consensus.

Gold

Selling seems to have temporarily abated in gold.

Oil

Oil is range bound but still levitating.

Indian Rupee

Indian rupee is hitting a record low against the dollar.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is negative but can quickly flip to positive.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1254, silver futures are at $16.32, and oil futures are $72.60.

S&P 500 resistance levels are 2700, 2740 and 2765; support levels are 2688, 2661 and 2631.

DJIA futures are down 105 points.

DRAMATIC TURN AROUND ON SOFTER CHINA STANCE, WINDOW DRESSING AHEAD

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

Dramatic Turn Around

This morning DJIA futures were down about 200 points when the news hit that the U. S. will use Committee On Foreign Investment (CIFIUS) mechanism along with legislation progressing through the Congress.  This is a significantly softer stance towards China than the consensus.  As of this writing the futures have turned around to positive territory.

Will it last?  It will depend on the details.

Window Dressing

Today is likely to be the peak day of window dressing.  In window dressing, money managers buy stocks that have done well during the quarter to show their clients in their quarter-end reports that they were holding winning stocks. This will provide support for the stocks that the momo crowd has been buying.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying as of this writing.  The smart money is also lightly buying as of this writing.

Gold

Gold remains under pressure due to the stronger dollar.  The momo crowd is selling gold.  The smart money is inactive.

Oil

Oil jumped after the U. S. government moved to restrict buying of Iranian oil.

API inventory data showed a draw of 9.228 million barrels vs. a consensus of 4 million barrels draw.  This is bullish.

EIA data which is considered more authoritative will be released at 10:30 am.

Hong Kong Bear Market

Previously Mainland China stocks had entered a bear market.  Now Hong Kong stocks have fallen into a bear market.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is positive but can quickly turn negative depending upon the details of the U. S. policy towards China.

Interest rates are ticking down and bonds are ticking up.

The dollar is stronger.

Gold futures are at $1259, silver futures are at $16.30, and oil futures are $71.07.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2700, 2688 and 2661.

DJIA futures are up 20  points.

HOT MONEY NOT YET GIVING A SELL SIGNAL, GOLD SOLD, CHINA ENTERS BEAR MARKET

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

Did The White House Panic?

Yesterday when the market had fallen about 500 DJIA points, the White House trade advisor Peter Navarro downplayed the investment restrictions that we discussed in the Morning Capsule.  Navarro calmed the nerves and the market rallied from its lows.  Here is the real question, “Did the White House panic on the DJIA dropping 500 points?” If the answer is yes, this is positive for the stock market.

Hot Money Not Yet Giving A Sell Signal

To understand the future direction of the market, it is important to first look at the leaders. The leaders in this market have been the popular technology stocks. The popular technology stocks have marched upwards primarily because the hot money has been flowing into them. The hot money mostly cares about the momentum.

Money flows provide an edge to the investors wanting to beat the market and lower their risks. Let’s explore by looking at momo (momentum) crowd money flows with the help of a chart.

Please click here for the annotated chart of money flows in 11 popular technology stocks. As a group these stocks have outperformed the Dow Jones Industrial Average (DJIA), S&P 500 (SPX) and Nasdaq 100 (NDAQ) and the popular index ETFs such as (SPY), (QQQ) and (IWM). Please observe the following from the chart.

  • Among FAANG stocks, momo crowd money flows are positive in Facebook (FB), Amazon (AMZN) and Netflix (NFLX). They are neutral in Apple (AAPL) and Google (GOOG) (GOOGL).
  • Among semiconductor stocks, momo crowd money flows are positive in AMD (AMD) and Nvidia (NVDA). They are negative in Intel (INTC).
  • Momo crowd money flows are positive in Tesla (TSLA) as shorts are getting squeezed.
  • Momo crowd money flows are positive in Alibaba (BABA) which is the Amazon of China in spite of a bear market in Chinese stocks by some measures.
  • Momo crowd money flows are positive in Microsoft (MSFT).
  • There is quite a contrast between the momo crowd flows and smart money flows as shown on the chart.

Momo Crowd And Smart Money In Stocks

In early trade the momo crowd is buying stocks.  The smart money is inactive.

Gold

Gold is being sold on a stronger dollar.  Gold is priced in dollars.  When the dollar becomes stronger gold weakens.  The momo crowd is aggressively selling gold.  The smart money is inactive.

Oil

Trading in oil is listless in the absence of any new news.

China

By some measures, China has entered a bear market.  Even those investors who do not want to invest in China or short China, need to keep an eye on China.  Does this mean that the U. S. is winning the trade war because the U. S. stock market still continues to levitate?  ETFs of interest are ASHR, FXI and FXP.  China is covered in ZYX Emerging.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is neutral but can quickly turn either way.

Interest rates and bonds are range bound.

The dollar is stronger.

Gold futures are at $1258, silver futures are at $16.21, and oil futures are $68.40.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2700, 2688 and 2661.

DJIA futures are up 9 points.

MORE RESTRICTIONS ON TECHNOLOGY EXPORTS TO CHINA, ERDOGAN WINS IN TURKEY

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

More Restrictions

Trump is planning on more restrictions on technology exports to China. This is causing fears of a trade war escalating.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively selling stocks. The smart money is inactive.

Gold

Gold is falling on a stronger dollar.

Oil

Oil continues its move up on OPEC agreement.

Turkey

Erdogan wins in Turkey’s presidential election.  Turkish stocks initially jumped over 4% but retraced on falling lira.

Technical Patterns

None of note

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is negative.

Interest rates are ticking down and bonds are ticking up.

Yen and dollar are stronger

Gold futures are at $1268, silver futures are at $16.36, and oil futures are $69.24.

S&P 500 resistance levels are 2765, 2800 and 2840; support levels are 2740, 2700 and 2688.

DJIA futures are down 173  points.

WHAT TO DO NOW

Looking ahead and not only in the rear view mirror, consider continuing to hold existing core portfolio positions.  Based on individual risk preference, consider holding cash or treasury bills 20% – 30% and short to medium-term hedges of  10% – 15% and very short term hedges of 10%.

 

A knowledgeable investor would have turned $100,000 into over $1,000,000 with the help from The Arora Report. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE TRIAL TO PAID SERVICES.

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