(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
CHRISTMAS GRINCH AND LONG WEEKEND EXASPERATE U. S. STOCKS AFTER SHANGHAI BROKE SUPPORT FOLLOWED BY OIL
This is what you need to know today.
Overnight Shanghai broke major psychological support at 3000. Oil followed by breaking major psychological support at $30.
The stock market in the U. S. is likely to be exasperated by the Christmas Grinch. The U. S. economy is 70% consumer based. American consumers are known for spending, especially during Christmas. This morning, December Retail Sales came at -0.1% vs. +0.1% consensus.
As our long-time subscribers know, in our models we use retail sales ex-auto. The reason is that auto sales are very volatile and make it harder to determine the real underlying trend. December Retail Sales Ex-auto came at -0.1% vs. +0.3% consensus.
This is a long weekend. Chinese stocks will trade for two days before stocks in the U. S. trade again. Many investors who are fully invested, are not going to want to take the risk of the long weekend. They may sell this morning.
Bonds, gold and silver are running up as money moves on safe haven buying.
As of this writing, oil is trying to rally but still staying below $30.
Often U. S. dollar sees safe haven buying, but not today. U. S. dollar is weakening on poor retail sales.
Yield on 10-year bonds has just fallen below the psychologically important number of 2%.
Our very, very short-term early stock market indicator is negative. Keep in mind that typically on Friday afternoon before a long weekend under similar market conditions, there is a high propensity of sharp short squeezes to occur in the afternoon. Such squeezes can viciously move the market to the upside.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-45% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1095, silver futures are at $14.07, and oil futures are $29.71.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1860, 1838, and 1800.
DJIA futures are down 395 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
BANK EARNINGS TO A STRONG START, CENTRAL BANKERS ACT IN CHINA AND EUROPE, MARKET NEAR MAJOR SUPPORT
This is what you need to know today.
This morning bank earnings season started with solid earnings from JPM.
PBOC injected 160 billion yuan in reverse seven day repos.
ECB cut its deposit rate to -0.3% from -0.2%.
Stock market in the U. S. is approaching major support level.
Please see yesterday afternoon’s post.
Gold, silver and bonds are showing some weakness as money comes out of them into stocks.
After briefly breaking $30 yesterday, oil has moved up over $31.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-45% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1084, silver futures are at $13.83, and oil futures are $30.93.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 18.60, 1838, and 1800.
DJIA futures are up 84 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
GOOD DATA FROM CHINA CALMS THE MARKETS
This is what you need to know today.
There are two pieces of good data from China.
- The differential between yuan offshore and onshore rates against the U. S. dollar has narrowed. This indicates that the Chinese government is finally getting control of its currency and speculators betting against the yuan are losing.
- For December the export data was less bad than feared.
Markets are calmer due to good data from China.
Oil traders are awaiting release of DOE data at 10:30 am ET.
Activity in gold, silver, copper, and bonds is listless.
U. S. dollar is gaining strength against major currencies.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-45% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1081, silver futures are at $13.84, and oil futures are $31.39.
S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1920, 1860, and 1838.
DJIA futures are up 124 points.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
REDUCING CASH
This is what you need to know today.
The Real Reasons Behind Recent Market Fall
Here are the real reasons behind the recent market fall.
- Chinese currency
- Hedge fund redemptions
- Fall in oil
What Is Next?
Here is what is next.
- More likely than not, Chinese government will succeed at stabilizing its currency.
- Impact of hedge fund redemptions is over.
- Our view on oil continues to be bearish. However, in the short-term, oil is very oversold and a vicious rally can take place at any time.
- Earnings season is upon us. Earnings expectations are low. It is common for actual earnings to beat expectations when expectations are low.
Markets
Smart Money continues to lightly sell gold and silver.
Overnight, after falling below $31, oil is staging a mild bounce.
Smart Money is selling bonds. Interest rates are range bound.
For a change, there are not any huge moves currencies with the exception of yuan. Yuan has strengthened and this should be good for the markets.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1, 2015.
Consider continuing to hold existing positions. Based on individual risk preference, the new recommended cash levels are 25% to 45%.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Early Trading
Gold futures are at $1087, silver futures are at $13.77, and oil futures are $31.65.
S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1860, 1938, and 1800.
DJIA futures are up 144 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
SHANGHAI FALLS ANOTHER 5% BUT U. S. FOCUS SHIFTS TO EARNINGS
This is what you need to know today.
Overnight Shanghai was ugly again with a fall of over 5%.
On the positive side, the Chinese government intervened heavily in the offshore yuan market causing the currency to move up.
In the U. S., the focus is beginning to shift from China to earnings. Earnings season starts today. There is also a large amount of U. S. economic data this week.
Smart Money is lightly selling gold and silver, while the momo crowd is still aggressively buying.
Oil is falling on growth concerns in China. Also losses is hedge funds that have been long oil are mounting. It will not be a surprise if some of these funds are forced to liquidate oil.
Smart Money is also lightly selling bonds.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 30-50% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1101, silver futures are at $14.03, and oil futures are $32.51.
S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1860, 1838, and 1800.
DJIA futures are up 62 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
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