WEEKLY MARKET DIGEST: A RALLY AS RECESSION LESS LIKELY, GOLD FAILS AT $1300, OIL RALLIES $DIA $GLD $QQQ $SLV $SPY $TBT $USO

WEEKLY MARKET DIGEST: A RALLY AS RECESSION LESS LIKELY, GOLD FAILS AT $1300, OIL RALLIES $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.

STRONG JOBS REPORT TEMPERING THE RALLY, OIL MOVING UP, GOLD FAILS AT $1300

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

Strong Jobs Report Tempers The Rally

After Apple (AAPL) held the support zone, buyers were coming into stock futures last night.  Buying became fairly aggressive in the early morning. Then came the strong jobs report. Buying is turning into selling after the strong jobs report.

Strong Jobs Report

Nonfarm Private Payrolls came at 301K vs. 175K consensus. Hourly earnings rose 0.4% vs. 0.3% consensus.

This is a very strong jobs report and indicates the economy is solid.

The Perverseness

Markets are often perverse.  The theory is that this strong jobs report will cause the Fed to raise interest rates. Rising interest rates have been one of  the root causes of most of the stock market’s troubles.

Ironically, as the stock market has fallen, money has flown out of stocks and into the safety of bonds. This demand for bonds has caused interest rates to plummet.

Momo Crowd And Smart Money In Stocks

The momo crowd is behaving like a yo-yo.  The smart money is lightly and selectively buying.

Gold

Gold briefly crossed $1300 resistance but the rally failed.  Gold is coming under pressure due to the strong jobs report.

Oil

API reported a crude oil draw of 4.5 million barrels vs. consensus of a draw of 2.3 million barrels.

Oil is being bought aggressively as of this writing.

Natural gas is attempting a rally from an oversold condition.

Marijuana

The momo crowd is buying marijuana stocks.  The smart money is inactive.

CRBP, is grouped with marijuana stocks because it targets the endocannabinoid system.  ZYX Buy has a position in the stock.  CRBP has entered a strategic collaboration with Kaken Pharmaceuticals of Japan to develop and commercialize a treatment for Systemic Sclerosis and Dermatomyositis.

Technical Patterns

Silver miners are tracing a flag. This is bullish.  ETF of interest is SIL. Please note that if the stock market recovers, gold may pull back and this trade may not work.  Silver moves with gold. The point is to use tight stops if trading this pattern.

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 swing negative.

Interest rates are rising and bonds are falling because of the strong jobs report.

The dollar is stronger.

Gold futures are at $1289, silver futures are at $15.77, and oil futures are $48.39.

S&P 500 resistance levels are 2500, 2550 and 2594; support levels are 2450, 2425 and 2400.

DJIA futures are up 277 points.

APPLE STOPS THE RALLY SET UP IN ITS TRACKS, YEN SOARS

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

Apple Stops The Rally

In yesterday’s Morning Capsule, at a time when stocks were being aggressively sold, we wrote:

New Year Money

New year money often pours into the stock market starting today.  This is likely to provide some support.  Keep in mind that a lot of these buy orders are executed at the close.  In other words it may not help in the morning session.

If you were closely watching the market, you would have noticed that the call was spot on.  As the day progressed, new money poured in.

In the afternoon a good set up for a rally developed.  Then came the news from Apple (AAPL) that it substantially lowered its guidance due to iPhone not selling well in China.

Apple has a very heavy weight in indexes.  Therefore Apple has significant impact on the market direction.

Yen Soars

Japanese yen soared on Apple news.  The move in yen caused a flash crash in some currencies such as the Australian dollar and the Turkish lira.

The yen is considered a safe haven like gold and money flows into it at times of distress.  Investors were obviously believing that the Apple news would cause distress in the U. S. market.

In our analysis, the move in yen may partially reverse and the move was exaggerated for the following two reasons:

  • Thin liquidity on a Japanese holiday.
  • The Apple news came around the witching hour between the close in New York and the open in Tokyo.

ADP Data

The mother of all numbers is the jobs report that will be issued by the Department of Labor on Friday.  ADP is the largest private payroll processor in the country.  It uses its data to give an advanced indication.  ADP employment change came at 271K vs. 170K consensus.  This indicates that the economy is in good shape.

Initial Jobless Claims

Initial Jobless Claims came at 231K vs. 220K consensus. This is a leading indicator and carries heavy weight in our timing models.

Momo Crowd And Smart Money In Stocks

The momo crowd sold stocks aggressively after the Apple news.  The momo crowd was aggressively selling early this morning but has now reversed course and is now buying as of this writing.

The smart money lightly bought near the lows of this morning but now has become inactive as the market has risen.

Investors should note that smart money is showing a pattern of lightly and selectively buying on extreme down spikes.

Gold

Money is pouring into the safety of gold.  The momo crowd is aggressively buying.  The smart money is inactive.

$1300 level is acting as a magnet for traders.

Oil

Oil is rallying on a report that OPEC countries are actually cutting production.

Natural gas is breaking the support at $2.90.  The next support is $2.78 to $2.83.  The resistance is at $3 to $3.11.

Marijuana

A major milestone has occurred in the legitimacy of marijuana stocks.  A major Wall Street bank, JPM, has launched coverage of GWPH with $134 price target.  ZYX Buy has previously had a position in GWPH.  GWPH has a cannabis derived drug for the treatment of epilepsy.

TLRY has signed an agreement with TGOD for TGOD to use Radiant Energy Vacuum dehydration technology to dry organic cannabis in Canada.

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 swing positive.

Interest rates are ticking down and bonds are ticking up.

Currencies are volatile.

Gold futures are at $1289, silver futures are at $15.68, and oil futures are $47.21.

S&P 500 resistance levels are 2500, 2550 and 2594; support levels are 2450, 2425 and 2400.

DJIA futures are down 241 points.

 

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CHINA DATA KILLS BUDDING RALLY, NEW YEAR MONEY COMING INTO THE MARKET

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

China Data Kills Budding Rally

Yesterday evening stock futures were higher. The momo crowd was aggressively buying.  Then came the poor data from China and the selling started.  The selling continues as of this writing.

China PMI

China IHS Markit PMI (Purchasing Manager’s Index) fell to 49.7.  A number less than 50 is considered negative.

Before reacting too much, keep in mind that PMI is simply a survey of purchasing managers.  It often flips back quickly.

New Year Money

New year money often pours into the stock market starting today.  This is likely to provide some support.  Keep in mind that a lot of these buy orders are executed at the close.  In other words it may not help in the morning session.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively selling stocks in the early trade. Smart money is lightly and selectively buying.

Gold

As the stock market falls, money is flowing into the safety of gold.

Oil

Oil is being sold on the data from China.

Natural gas is being sold on warmer weather and has broken the support at $3.

Marijuana

There is excitement about new opportunities in marijuana in 2019.  However in the very short term, marijuana stocks are beginning to move with the market unless there is news.

Technical Patterns

Silver miners are tracing a hammer.  This is bullish. ETF of interest is SIL.  Keep in mind that if the stock market starts to improve, this trade may not work.

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 positive.

Interest rates are ticking down and bonds are ticking up.

Currencies are range bound.

Gold futures are at $1286, silver futures are at $15.46, and oil futures are $44.71.

S&P 500 resistance levels are 2500, 2550 and 2594; support levels are 2450, 2425 and 2400.

DJIA futures are down 336 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 17% – 31% and short to medium-term hedges of  5% – 15% and short term hedges of zero.

 

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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