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.
TRUMP ‘PUT’ BOLSTERED BY SHORT COVERING CREATES OPTIMISM, MAY IN U. K. RESIGNS, OFFICE CLOSED
To gain an edge, this is what you need to know today.
Trump ‘Put’ Bolstered
We have been sharing with you the existence of Trump ‘put’ below the market. The Trump put was in full display yesterday afternoon. When the market was falling out of bed, Trump stated that Huawei could be a part of trade resolution. Semiconductor stocks started rallying and this led the stock market to rally from the lows.
Short Covering
Those with profits on shorts do not want the profits to get away. There was significant buying yesterday afternoon arising from short covering ahead of the holiday weekend. Short covering continues in the early trade this morning.
May Resigns In The U. K.
Prime Minister May has resigned. In our analysis, we do not see any tradeable opportunities from her resignation.
Durable Goods
Durable Goods Ex-transports came at 0.0% vs. 0.2% consensus. This is a very volatile series and the weakness is not of concern at this time.
Offices Closed
On Tuesday our offices will be closed for extended Memorial Day holiday to give our team members more time with their families. There will be no Morning Capsule. The stock market will be open.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying stocks in the early trade. Smart money is inactive.
Gold
There is no discernable momo crowd or smart money activity.
Oil
The momo crowd aggressively sold oil yesterday after it broke the support of $60. This morning the momo crowd is buying oil. Smart money is inactive.
Marijuana
The momo crowd is buying marijuana stocks in the early trade. Smart money is inactive.
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 are ticking up and bonds are ticking down.
Currencies are range bound.
Gold futures are at $1282, silver futures are at $14.54, and oil futures are $58.64.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are up 136 points.
TECH BAN SPREADS BEYOND THE U. S. — PROTECT YOUR PORTFOLIO, MODI WAVE 2.0
To gain an edge, this is what you need to know today.
Tech Ban Spreads
Trump ban on supplying technology to Huawei, Chinese telecom giant is spreading beyond the U. S. shores. Companies in Europe and Japan are beginning to halt some shipments to Huawei. The reason is that the underlying technology is American technology. Investors ought to look at protecting their portfolios. Let’s explore with the help of a chart.
Please click here for the annotated chart of Nasdaq 100 ETF (QQQ). Similar conclusions can be drawn from the charts of Dow Jones Industrial Average (DJIA) and S&P 500 ETF (SPY). Please note the following:
- As the chart shows, the support zone is nearby.
- For the bull market to sustain itself, at best there should be only a minor breach of the support zone shown on the chart.
- The way machines trade these days, unlike in the past, support zones are often broken, stops of those less knowledgeable are taken out and then the market bounces. This is a typical pattern. However it does not mean that the pattern is repeated every time.
- The chart shows Arora buy signal given on Christmas Eve which has turned out to be the low of the cycle.
- The chart shows Arora signal to short sell QQQ or buy inverse ETF (PSQ).
- The chart shows a failure point for the rally.
- RSI shows a weak bounce from the oversold condition.
- The chart shows Arora call to raise cash and hedges on May 6 right near the top.
Pay attention to the ‘What To Do Now’ section below.
Modi Wave 2.0
In India, Modi wave 2.0 is likely to give Modi a bigger majority in the Parliament compared to the first wave in 2014. India is likely to provide some of the best investment opportunities over the next three to five years. India is covered in ZYX Emerging. We recently upgraded India. India has also been added to ZYX Global.
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 inactive.
Oil
EIA data showed inventory build more than the consensus. The bearish data has caused oil to break support at $60. Right now stops are being taken out. After the stops are taken out, a bounce should occur for the oil rally to sustain itself.
The momo crowd is selling oil. Smart money is inactive.
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.
Interest rates are ticking down and bonds are ticking up.
The dollar is stronger.
Gold futures are at $1282, silver futures are at $14.59, and oil futures are $59.52.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are down 224 points.
POTENTIAL NEW TRUMP BANS POSE RISK, FED MINUTES
To gain an edge, this is what you need to know today.
Potential New Trump Bans
Chinese companies have been cornering the market for surveillance equipment. Trump is considering a new ban on five Chinese companies. Shares of Hikvision and Dahua plunged on the news. These are not your father’s surveillance equipment companies. They are using new technologies of facial recognition, gait recognition, speech monitoring and artificial intelligence. These companies are setting up networks to track people by their facial features anywhere in the country.
These companies are dominating the globe and lately have been spending a ton of money to expand in the United States.
In our analysis, Trump is on the right track. However the stock market is short sighted and may react badly to new bans. Please pay attention to the ‘What To Do Now’ section below.
Fed Minutes
The Fed will release its minutes at 2:00 pm ET. That may be a market moving event.
Momo Crowd And Smart Money In Stocks
The momo crowd is selling stocks in the early trade. Smart money is inactive.
Gold
There is no discernable momo crowd or smart money activity.
Oil
The momo crowd is selling oil after API showed surprise inventory build bigger than the consensus. Smart money is inactive.
Marijuana
The momo crowd is buying marijuana stocks. Smart money is inactive.
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.
The dollar is weaker.
Gold futures are at $1275, silver futures are at $14.45, and oil futures are $62.24.
S&P 500 resistance levels are 2860, 2918 and 2925; support levels are 2840, 2800 and 2765.
DJIA futures are down 81 points.
BOUNCE FROM OVERSOLD CONDITIONS ON 90-DAY REPRIEVE FOR HUAWEI
To gain an edge, this is what you need to know today.
Oversold
The market is technically oversold. Oversold markets tend to bounce on the slightest bit of good news. This is exactly what is happening this morning.
The excuse is that the U. S. is granting a 90-day reprieve to Huawei and its customers to procure U. S. technology for maintenance purposes.
Yesterday we wrote:
Based on the emails I have received, first of all caution is warranted against short selling semiconductor stocks at this time. These stocks are oversold. The slightest bit of good news can ignite a rally. There may be opportunities to start trade around positions in semiconductor stocks from the long side.
Semiconductors are showing the biggest bounce this morning in the pre-market.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks. Buying is especially strong in semiconductor stocks. Smart money is inactive.
Gold
The momo crowd is selling gold. Smart money is inactive.
Oil
The momo crowd is acting like a yo-yo in oil. Smart money is inactive.
Marijuana
The momo crowd is buying marijuana stocks in the early trade. Smart money is inactive.
Technical Patterns
Indonesian stocks are tracing an island bottom. This is bullish. ETF of interest is EIDO.
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.
Bonds are ticking down and interest rates are ticking up.
The dollar is slightly stronger.
Gold futures are at $1271, silver futures are at $14.40, and oil futures are $63.30.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2840, 2800 and 2765.
DJIA futures are up 117 points.
TRUMP BAN HURTS, INDIAN AND AUSTRALIAN STOCKS JUMP, SURPRISE JAPAN GDP
To gain an edge, this is what you need to know today.
Trump Ban Hurts
Trump ban on Huawei is beginning to seriously hurt U. S. tech stocks. We will do a separate post.
India
Exit polls show that Modi will win. Indian stocks are up 2.5% . In the past, exit polls have not been reliable. However if the final results are inline with the exit polls, expect significant foreign money to flow into India. India represents one of the best opportunities over the next few years for investors. India is covered in ZYX Emerging.
Australia
After a surprise victory of Prime Minister Morrison, Australian stocks are jumping 2%.
Unlike India, the trajectory of the Australian stock market depends on exports to China. For this reason, unless the situation changes, the probability of the Australian stock market rocketing up is low until the China situation is resolved.
Japan
GDP in Japan came at 2.1%, this is a big surprise to the upside. In our analysis at The Arora Report, this is an anomaly. However please note that Japanese stocks are some of the cheapest stocks in the world. Japan is covered in ZYX Global.
5G Win
In a remarkable move, the FCC Chairman Pai is recommending the approval of a merger between T-Mobile (TMUS) and Sprint ( S). The merger was apparently apposed by Department of Justice. This is a win for 5G as Trump wants the U. S. to lead China.
Momo Crowd And Smart Money In Stocks
The momo crowd is selling stocks in the early trade. Smart money is inactive.
Gold
The momo crowd is selling gold. Smart money is inactive.
Oil
Oil is rising as OPEC is giving an indication of maintaining production discipline.
The momo crowd is buying oil. Smart money is inactive.
Marijuana
There is no discernable smart money or momo crowd activity in marijuana in the early trade.
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.
Bonds are ticking up interest rates are ticking down.
Currencies are range bound.
Gold futures are at $1276, silver futures are at $14.38, and oil futures are $62.82.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are down 171 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 24% – 34% and short to medium-term hedges of 10% – 20% and short term hedges of 10% – 20%.
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.
Please click here to take advantage of a FREE 30 day trial.
Check out our enviable performance in both bull and bear markets.
