WEEKLY MARKET DIGEST: DOLLAR DROP LEADS TO GOLD RISE ON MUELLER CROSSING TRUMP’S RED LINE, STOCKS DON’T CARE $DIA $GLD $QQQ $SLV $SPY $TBT $TBF $USO

WEEKLY MARKET DIGEST: DOLLAR DROP LEADS TO GOLD RISE ON MUELLER CROSSING TRUMP’S RED LINE, STOCKS DON’T CARE $DIA $GLD $QQQ $SLV $SPY $TBT $TBF $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.

DOLLAR DROPS LEADING TO RISE IN GOLD ON MUELLER CROSSING TRUMP’S RED LINE, STOCKS DON’T CARE

This is what you need to know today.

Mueller Crosses The Red Line

Special Counsel Robert Mueller has reportedly expanded his investigation into a broad range of financial affairs of Trump, his family and his associates going back a decade.  This is allegedly crossing Trump’s red line.

Speculation is swirling that Trump is considering firing Mueller for investigating his business affairs.  Trump lacks direct authority to fire Mueller but can proceed by firing Justice Department officials and replacing them with people willing to fire Mueller.

Dollar Drops On Potential Consequences

The dollar has dropped on potential consequences of Mueller probe.

Gold Rises

Gold is priced in dollars.  As the dollar drops, gold price is rising.  If the situation deteriorates, gold can rise further.

Stocks Don’t Care

Stocks are under the control of the momo crowd.  The momo crowd doesn’t care about anything other than their hope of the price going up.  If history is any guide, momo will continue its behavior until the price actually goes down and they start losing money.

Oil

Rig count will be released at 1:00 pm and has the potential to move 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.

Bonds are stronger.

Gold futures are at $1251, silver futures are at $16.48, and oil futures are $46.50.

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

DJIA futures are down 43  points.

A NEW SIGNAL FOR A POSSIBLE HIGHLY PROFITABLE PARABOLIC MOVE IN STOCKS, BOJ AND ECB MEETINGS, BULLISH DATA ON OIL

This is what you need to know today.

A New Signal For A Possible Highly Profitable Parabolic Move In Stocks

We will do a separate post shortly.

BOJ Meeting

Bank pf Japan raised economic growth forecast but pushed back its inflation target.  Not only Japanese stocks are climbing on the news, stocks throughout Asia are climbing.

ECB Meeting

European Central Bank left its guidance unchanged.  Stocks in Europe are climbing on the news.

Gold

Light selling by the ‘smart money’ is coming into gold.  The momo crowd is still an aggressive buyer of gold.

Bullish Data On Oil

EIA data was bullish for oil.  Oil is climbing on the news.

Technical Patterns

Several oil service stocks are tracing a Double Bottom. This is bullish.  ETFs of interest are and .

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.

Currencies, interest rates and bonds are range bound.

Gold futures are at $1240, silver futures are at $16.25, and oil futures are $47.62.

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

DJIA futures are up 9 points.

STRONG HOUSING, TRUMP FORCES REPEAL, BEARISH API ON OIL

This is what you need to know today.

Strong Housing Starts

After some weak recent data on housing, the data released this morning is strong.

Housing Starts came at 1215K vs. 1196K consensus.  Building Permits came at 1254K vs. 1160K consensus.

Trump Forces Repeal Vote

Senate GOP leader’s plan to repeal Obamacare now without a replacement appears to be dead due to defections.  However, Trump is requesting a vote on the bill.   There is speculation that Trump plans to retaliate against defecting Senators.

Another Healthcare Scare

There is a new healthcare scare.  The U. S. government pays on a monthly basis to insurers for subsidies to low income people.  There is a scare going on that Trump may withhold the payment to force collapse of Obamacare.

Affect Of Healthcare On Stocks

A big part of the rally in stocks is based on hope of Trump agenda getting implemented.  Healthcare issues are stalling the Trump agenda.  In theory, the market should fall on this stall.  For this reason we pay a lot of attention to healthcare issues in Washington.

So far the market has not fallen because the market is being controlled by the momo crowd.  The momo crowd does not care about anything other than the price.   They will continue to buy until they start suffering losses.

Gold

Gold is holding its gains from yesterday.  Trading is muted.

Bearish API Data On Oil

API data shows that crude inventories climbed 1.6 million barrels vs. consensus of a decline of 3 million barrels.  Rising inventories are bad for oil prices.  Traders are now waiting for EIA data that will be released at 10:30 am ET.

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.

Bonds, interest rates and currencies are range bound.

Gold futures are at $1240, silver futures are at $16.26, and oil futures are $46.69.

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

DJIA futures are up 5 points.

DOLLAR FALLS ON COLLAPSE OF HEALTHCARE BILL LEADING TO STRENGTH IN GOLD, BONDS AND OIL BUT WEAKNESS IN STOCKS

This is what you need to know today.

Healthcare Bill Collapses

The Republican healthcare bill has  collapsed as two more Senators came against the healthcare bill.  Now Trump is calling for a clean repeal of Obamacare with replacement to follow after a two year grace period.

Dollar Falls

Dollar is falling on collapse of the healthcare bill.

Gold

Gold is priced in dollars.  For this reason gold is very sensitive to dollar.  Gold is running as dollar weakens.

Stocks

Stocks were initially strengthening on good earnings.  However failure of the healthcare bill means stalled Trump agenda, at least in the short-term.  As the dollar continues to weaken, stock futures have given up their gains and are falling as of this writing.

Blow To OPEC

In a blow to OPEC, Ecuador announced that it will increase oil production.  However oil is being supported by the falling dollar.

Australia

On reports of a hawkish Reserve Bank of Australia, Australian dollar is strengthening.  Some of it is related to good GDP number from China yesterday. Australia is a major exporter to China.

Technical Patterns

Uranium stocks are tracing a Double Bottom.  This is bullish.  ETF of interest is .

Natural gas is tracing a Diamond Bottom.  This is bullish.  ETF of interest is .

Some regional banks are tracing an Inside Bar in a down trend.  This is bullish.  ETF of interest is .

Many large cap stocks are tracing an Inside Bar in an uptrend.  This is bearish.  ETF of interest is .

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 getting stronger.

Gold futures are at $1241, silver futures are at $16.19, and oil futures are $47.01.

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

DJIA futures are down  45 points.

GOLD AND COMMODITIES RISE ON CHINA INDUSTRIAL OUTPUT, MOMO BUYS STOCKS AS EARNINGS SEASON GATHERS STEAM

This is what you need to know today.

China Expansion

GDP in China rose 6.9% vs. 6.8% consensus.

China is the second largest economy in the world.  China is likely to surpass the United States as the largest economy by 2025.  For this reason, events in China have a significant impact on all markets including U. S. domestic stock market.

Gold And Commodities Rise On China Industrial Output

Industrial output in China rose 7.6% year over year.  This is more than expectations.  Gold, oil, copper and other commodities are rising on the industrial output news from China.

Chinese currency yuan rose in onshore trading.  There is often a disparity between the price of yuan onshore in China and offshore outside of China.

Smart Money In Gold

Gold is breaking over $1230 as of this writing but there is no buying by the ‘smart money’ at this time.

Earnings Season

Earnings season will gather steam this week.  Momo crowd is aggressively buying stocks.

Smart Money In Stocks

The ‘smart money’ is mostly inactive in stocks.

Healthcare Bill Delayed

Trump agenda is very important to the markets.  Healthcare bill in the Senate is the next step.  Healthcare bill is delayed due to an emergency surgery performed on Senator John McCain.  As of this writing, market is ignoring the news but that may change as the day progresses.

Technical Patterns

10-year Treasuries are tracing an Exhaustion Bar.  This is bearish. ETF of interest is .

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 expect the market to start out positive.

Interest rates are ticking down and bonds are ticking up.

Currencies are range bound.

Gold futures are at $1233, silver futures are at $16.10, and oil futures are $46.45.

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

DJIA futures are up 17 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 27 – 38% of assets in cash or treasury bills, and short to medium-term hedges of  25% and very short term hedges of 5%.

 

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