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 OIH and XES.
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 URA.
Natural gas is tracing a Diamond Bottom. This is bullish. ETF of interest is UNG.
Some regional banks are tracing an Inside Bar in a down trend. This is bullish. ETF of interest is KRE.
Many large cap stocks are tracing an Inside Bar in an uptrend. This is bearish. ETF of interest is SPY.
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 IEF.
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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