WEEKLY MARKET DIGEST: AGGRESSIVE BUYING IN GOLD, MONEY PRINTING FREE LUNCH, SMART MONEY SELLS STOCKS $DIA $GLD $QQQ $SLV $SPY $TBT $USO

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WEEKLY MARKET DIGEST: AGGRESSIVE BUYING IN GOLD, MONEY PRINTING FREE LUNCH, SMART MONEY SELLS STOCKS $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.

GOLD TO SEVEN YEAR HIGH, INFECTIONS IN KOREA JUMP

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

Korea Infections

It appears that one ‘super spreader’ has led to explosion of cases of coronavirus in South Korea, an increase from 31 on Tuesday to 156 today.

This is causing major concern in the markets.

Momo Crowd And Smart Money In Stocks

The momo crowd is selling stocks.  Smart money is inactive.

Gold

Gold is seeing aggressive buying.  The momo crowd is buying gold. Smart money is inactive.

Sentiment is approaching near extreme in gold in the very short term.  Often a pullback occurs when the sentiment becomes extreme.

For longer term, please see gold and silver ratings.

Oil

The momo crowd is selling oil. Smart money is inactive.

For longer term, please see oil ratings.

Marijuana

There is no discernable smart money or momo crowd activity in marijuana.

Technical Patterns

Solar stocks are tracing a  hanging man. This is bearish.  ETF of interest is TAN.

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.  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.

Gold futures are at $1642, silver futures are at $18.50, and oil futures are $53.14.

S&P 500 resistance levels are  3360, 3400 and 3440; support levels are 3300, 3288 and 3256.

DJIA futures are down 107 points.

GOLD BREAKOUT ON FOUR RARE THINGS SHOULD CONCERN STOCK MARKET INVESTORS, CORONAVIRUS CONCERNS

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

Gold Breakout

This stock market is controlled by the momo (momentum) crowd. The momo crowd is not known for analysis. They simply buy because the market is going up. It is not a surprise that the momo crowd is oblivious to the breakout in gold on four rare things. However, prudent investors should pay attention. Let’s explore with the help of a chart.

Please click here for an annotated chart of gold ETF (GLD).

Note the following:

  • The chart shows the previous resistance line which has now become the support line in gold.
  • The chart shows a technical breakout in gold. This is a positive for gold but negative for stocks.
  • The chart shows the breakout occurred after two shallow pullbacks. This is a positive for gold.
  • The chart shows that the breakout is occurring on four rare things coming together.
  • Gold is priced in dollars. For this reason when the dollar becomes stronger gold goes down. Lately the dollar is becoming stronger but instead of going down, gold is going up.
  • Typically gold goes down when the stock market goes higher, especially if there is an aggressive up move in the stock market as has been happening lately. Here gold has broken out as the stock market has gone higher.
  • Gold typically goes up when there is a new safe haven event such as war. Here gold did not breakout on coronavirus crisis. However now that the coronavirus scare has been subsiding, gold is moving up. Gold breaking out under these circumstances without a new event that makes money rush into the safe haven of gold is rare.
  • Smart money has not been buying gold until now but now smart money has jumped in with light buying. This behavior is rare as smart money typically buys on pullbacks.
  • With Dow Jones Industrial Average (DJIA) in a strong uptrend and investors’ portfolios concentrated in mega-caps such as Apple (AAPL), Amazon (AMZN), Facebook (FB) and Alphabet (GOOG) (GOOGL), this breakout in gold is of major significance.
  • Semiconductors have been the leading indicators of the stock market. Investors should keep a careful watch on semiconductor stocks such as AMD (AMD), Micron (MU), NVIDIA (NVDA) and Intel (INTC). Semiconductors are overbought and vulnerable.
  • Investors should also keep a careful watch on short squeezes in stocks such as Virgin Galactic (SPCE), Tesla (TSLA), Enphase (ENPH) and SolarEdge (SEDG).
  • There are new concerns about coronavirus and the impact on earnings. Investors should stay tuned to the news from China as well as to earnings related announcements.
See also  MOMO CROWD BUYING ON POWELL NOT BEING EXTRA HAWKISH AHEAD OF CPI

Jobless Claims

Jobless Claims came at 210K vs. 211K consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is selling stocks.  Smart money is inactive.

Gold

The momo crowd is buying gold.  Smart money is also lightly buying gold.

For longer term, please see gold and silver ratings.

Oil

The momo crowd is buying oil.  Smart money is inactive.  However API data was bearish. API came at a build of 4.16M barrels vs. consensus of 2.5M barrel build.

For longer term, please see oil ratings.

Marijuana

There is no discernable momo crowd or smart money activity.

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.  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 ticking down and bonds are ticking up.

The dollar is range bound.

Gold futures are at $1619, silver futures are at $18.33, and oil futures are $53.93.

S&P 500 resistance levels are 3400 and 3440; support levels are 3360, 3300 and 3288.

DJIA futures are down 65 points.

PRODUCER PRICES SEE A BIG JUMP UNDERCUTTING THE THEORY THAT FED CAN PRINT MONEY WITHOUT CONSEQUENCES

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

Money Printing

See also  ATTEMPTS AT ENGINEERING A SHORT SQUEEZE MEET RESISTANCE

Please click here for a chart showing the Federal Reserve’s assets.  We have previously written that the stock market is going up in lockstep with money printing by the Fed. Are there consequences to the Fed continuing to print money?  In theory the consequence is high inflation; high inflation should force the Fed to raise rates and if the rates rise the stock market should fall perhaps by over 50%.  The current belief is that it is a free lunch because no inflation has shown up so far.

This morning, PPI shows an early indication that the current belief may not be correct forever.

Producer Prices

Core PPI came at 0.5% vs. 0.1% consensus.  This is an early warning signal.  However the stock market gurus are completely dismissing it because it is only one month of data.

Housing Starts

Housing is strong.  Housing Starts came at 1.57 million vs. 1.3 million consensus.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying stocks. Smart money is lightly selling into the strength.

Gold

Gold has crossed $1600 because believe or not, there are investors who think the stock market is going to crash and they are putting money in gold to protect themselves.

The momo crowd is aggressively buying gold.  Smart money is also lightly buying gold.

For longer term, please see gold and silver ratings.

Oil

The momo crowd is aggressively buying oil as fighting in Libya heats up.  Smart money is inactive.

For longer term, please see oil ratings.

Marijuana

There is no discernable smart money or momo crowd activity in marijuana.

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.  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.

Gold futures are at $1607, silver futures are at $18.23, and oil futures are $52.95.

S&P 500 resistance levels are  3400 and 3440; support levels are 3360, 3300 and 3288.

DJIA futures are up 93 points.

‘BAD’ NEWS IS ‘GOOD’ NEWS MARKET CONTINUES

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

Bad’ News Is ‘Good’News

We have previously written that in this market ‘Bad’ news is ‘Good’ news and ‘Good’ news is ‘Great’ news.  This is at full display this morning.

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Bad News

There is plenty of bad news.  Here are four examples:

  • The latest data from Japan shows that Japan is at the brink of a recession.
  • WMT reported overall earnings and projections significantly less than the consensus and the whisper numbers.  After running down in the pre-market, the stock is positive as of this writing.
  • AAPL lowers its revenues guidance due to coronavirus.  Based on several models the stock should have been down about $30 but the stock is trading down only $7. in the pre-market
  • Based on the entirety of the news over the long weekend and this morning, DJIA futures should have been down about 500 points but they are down only 145 points.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying in the early trade.   Smart money is selling.

Gold

The momo crowd is aggressively buying gold.  Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

The is no discernable momo crowd or smart money activity in oil.

For longer term, please see oil ratings.

Marijuana

The is no discernable momo crowd or smart money activity in

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.  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.

Gold futures are at $1593, silver futures are at $17.94, and oil futures are $51.29.

S&P 500 resistance levels are 3400 and 3440; support levels are 3360, 3300 and 3288.

DJIA futures are down 147 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 22% – 32% and short to medium-term hedges of  0% – 15% and short term hedges of 5% – 10%.

 

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