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.
DECLINE IN ITALY DAMPENING SENTIMENT FOR U. S. STOCKS, QUARTER-END SHENANIGANS, PERSONAL INCOME
To gain an edge, this is what you need to know today.
Italy
Stocks in Italy are falling. FTSE Mib Index has fallen 4.32%.
Italian bonds are also seeing major losses. The reason behind the tumble is that the populist government has decided on a deficit of 2.4% of GDP for the next year.
European Union has said that the deficit should be closer to 1.6%. Consensus has been that Italy would propose a deficit of about 2%.
Sentiment Dampened Because Of Italy
The sentiment in U. S. stocks is being dampened because of Italy. Interestingly the momo (momentum) crowd does not care about deficits in the U. S. but smart money is taking notice of the fall in Italian stocks on higher proposed deficits and rising budget deficits in the United States.
Quarter-End Shenanigans
Expect a lot of quarter-end shenanigans from money managers today. For practical purposes this can cause volatility and unexpected moves in individual stocks.
Personal Income And Spending
The U. S. economy is about 70% consumer based. For this reason investors should pay attention to personal income and spending.
Personal Income came at 0.3% vs. 0.4% consensus.
Personal Spending came at 0.3% vs. 0.3% consensus.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying in the early trade. The smart money is selling in the early trade.
Gold
Trading in gold is listless.
Oil
The momo crowd is aggressively buying oil. The smart money is lightly selling into the strength.
Technical Patterns
Semiconductors are tracing an Inside Bar. This is bullish. ETF of interest is SMH.
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 rapidly swing due to quarter-end shenanigans.
Interest rates are ticking down and bonds are ticking up.
Gold futures are at $1188, silver futures are at $14.46, and oil futures are $72.17.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are down 76 points.
DECEMBER RATE HIKE, HIGHER TRADE DEFICIT AND LOWER VOLUME
To gain an edge, this is what you need to know today.
December Rate Hike
The Fed raised rates by 0.25%. The Fed is highly likely to raise rates in December. The market did not like the December rate hike and sold off after the Fed announcement.
Higher Trade Deficit
The trade deficit came at -$75.8 billion vs. -$70.8 billion consensus.
Durable Goods
Durable Goods Ex Transports came at o.1% vs. 0.4% consensus.
Jobless Claims
Initial Jobless Claims came at 214K vs. 209K consensus.
Lower Volume
There is very heavy interest among traders to watch the Kavanaugh hearing. Many experts are expecting the volume to drop by one-half when the hearing is in progress. For practical purposes it means that the traders who are not watching the hearing will be able to move individual stocks in much wider range due to low liquidity.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying. The smart money is lightly selling.
Gold
There is heavy selling in gold on the prospect of the Fed raising rates in December. Higher interest rates are not good for gold.
Oil
Oil is rising on a denial that the U. S. is contemplating release from SPR. In our analysis, you can ignore the denial. Ultimately Trump is the decision maker and not anybody else.
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 swing either way due to lower volume.
The dollar is stronger.
Interest rates are ticking up and bonds are ticking down.
Gold futures are at $1188, silver futures are at $14.23, and oil futures are $72.35.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are up 39 points.
QUIET TRADING AHEAD OF THE FED, TRUMP MAY RELEASE OIL FROM SPR AFTER SAUDI SNUB
To gain an edge, this is what you need to know today.
Quiet Trading Ahead Of The Fed
Trading is quiet ahead of the Fed announcement at 2:00 pm ET. The Fed announcement is likely to be a market moving event. Please stay alert in case there are opportunities.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks. The smart money is lightly selling.
Gold
Trading in gold is listless. However, the momo crowd tends to run gold up going into the Fed announcement or after the announcement.
Oil
After the Saudi snub, there is speculation that Trump may chose to release oil from the Strategic Petroleum Reserve (SPR). This will be an easy way for Trump to bring gasoline prices down.
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, it depends on the Fed announcement.
The dollar is slightly stronger.
Interest rates are ticking down and bonds are ticking up.
Gold futures are at $1198, silver futures are at $14.43, and oil futures are $71.82.
S&P 500 resistance levels are 2925 and 2950; support levels are 2918, 2860 and 2840.
DJIA futures are up 18 points.
THE FED TO RAISE RATES, MOMO BUYS STOCKS
To gain an edge, this is what you need to know today.
Fed Meeting
The Fed is meeting. The decision will be announced tomorrow at 2:00 pm ET. The consensus is that the Fed will raise interest rates by 0.25%. We will be carefully reading the tea leaves regarding the future direction of interest rates.
Housing Price Index
The Housing Price Index came at 0.2% vs. 0.3% consensus.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks this morning in the early trade. Smart money is inactive.
Gold
Gold is seeing light buying by the momo crowd. Smart money is inactive.
Oil
The momo crowd is aggressively buying oil. Smart money is lightly selling into the strength. Wall Street is turning very bullish on oil. In our analysis, there is a fair probability that this bullishness will fizzle.
Technical Patterns
Chinese shares traded in Hong Kong are tracing an Island Top. This is bearish. ETF of interest is FXI. There is also an inverse ETF available with the symbol FXP.
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 swing negative easily.
Currencies are mixed.
Interest rates are ticking up and bonds are ticking down.
Gold futures are at $1205, silver futures are at $14.36, and oil futures are $72.44.
S&P 500 resistance level is 2950; support levels are 2925, 2918 and 2860.
DJIA futures are up 48 points.
POST QUADRUPLE WITCHING REVERSAL, CHINA TARIFFS, SAUDI SNUBS TRUMP
To gain an edge, this is what you need to know today.
Post Quadruple Witching Reversal
On Friday we shared with you that some of the gains last week were attributable to quadruple witching. We also shared with you that often such gains reverse, at least in part.
We may see the reversal today.
China Tariffs
China tariffs have gone into effect as scheduled.
Momo Crowd And Smart Money In Stocks
The smart money is selling stocks in the early trade. The momo crowd is lightly buying.
Gold
Gold is seeing some buying as gold is very oversold. The smart money is inactive.
Oil
Oil is moving higher as Saudi Arabia snubs Trump in the OPEC meeting and attempts to maintain high oil prices. This is generating bullishness in oil.
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 up and bonds are ticking down.
Gold futures are at $1204, silver futures are at $14.34, and oil futures are $72.22.
S&P 500 resistance level is 2950; support levels are 2918, 2860 and 2840.
DJIA futures are down 36 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 21% – 31% and short to medium-term hedges of 10% – 15% and very short term hedges of 10% – 15%.
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