WEEKLY MARKET DIGEST: EXCESSIVE BULLISHNESS AND SELLER STRIKE, BIG MOVE IN GOLD CONTRADICTING STOCK MARKET $DIA $GLD $QQQ $SLV $SPY

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WEEKLY MARKET DIGEST: EXCESSIVE BULLISHNESS AND SELLER STRIKE, BIG MOVE IN GOLD CONTRADICTING STOCK MARKET $DIA $GLD $QQQ $SLV $SPY $TBT $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.

EXCESSIVE BULLISHNESS AND SELLER STRIKE, BIG MOVE IN GOLD CONTRADICTING STOCK MARKET

To gain an edge, this is what you need to know today.

Excessive Bullishness

Sentiment has not just entered the extreme zone. As sentiment progresses further in the extreme zone, traditionally it is a sell signal.

Seller Strike

The market keeps going up not only on momo buying but also because sellers have gone on strike for two reasons.

  • Investors do not want to pay capital gains taxes this year. They are postponing any selling to 2020.
  • Senior people have gone on vacations.  Junior people are in charge who are not going to make decisions against the momentum.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying stocks.  Smart money is inactive but sporadically there is light selling by smart money into the strength.

Gold

Often the crowd that controls gold and the crowd that controls stocks are a different group of investors.  The gold crowd is believing that the stock market will crash and money will move into gold. For this reason they are buying gold.  Seasonally this is also a positive period for gold.

The momo crowd is aggressively buying gold.  Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

API data showed that crude inventory fell by 7.9M barrels vs. 1.83M barrel consensus.

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Oil and stocks are moving in tandem.  The momo crowd is aggressively buying oil.  Smart money is inactive.

For longer term, please see oil ratings.

Marijuana

The momo crowd is acting like a yo-yo.  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 but the market is very overbought and vulnerable to the downside .  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest are ticking down and bonds are ticking up.

The dollar is weaker.

Gold futures are at $1516, silver futures are at $17.94, and oil futures are $61.73.

S&P 500 resistance levels are  3256, 3288 and 3300; support levels are 3223, 3200 and 3143.

DJIA futures are up 68 points.

HAPPY HOLIDAYS, LISTEN TO BUFFETT, 37% MOVE IN STOCKS, MOMO BUYING AND RETAIL INVESTORS JUMPING IN

To gain an edge, this is what you need to know today.

Happy Holidays

Our offices will be closed tomorrow and Thursday, and there will be no Morning Capsules.  You know our team works hard for you.  It is time for them to spend time with their families.

Listen To Buffett

Buffett’s advice has been to be ‘Fearful when others are greedy.’  To understand Buffett’s advice, flash back to Christmas Eve of 2018.  For the first time in years, stocks had fallen 20% in a short time. On that day the market was falling out of bed.  Wall Street was giving sell signals.  Most gurus were telling their followers to sell stocks as the big downfall was upon us.  Traditional technical analysis had given the first major sell signal in years.

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To the best of our knowledge, The Arora Report was the only service anywhere that gave a buy signal at the depth of major selling on December 24th.  December 24th has turned out to be the low of the cycle with stocks up 37% since then.

Here are some of our headlines from that period.

SIGNAL LIMITED: A NEW IDEA ON SPY

MORNING CAPSULE: REDUCE CASH, PROBABILITY OF A RALLY, PENSION FUND BUYING, OIL AT SUPPORT, MONEY FLOWS INTO GOLD

UPDATE ON HEDGES, REVIEWED DAILY AFTER THE ORIGINAL PUBLICATION DATE

Retail Investors Jumping In

Anecdotal evidence is that retail investors are beginning to jump into the stock market with both feet.  Many of these are the same investors who sold everything when stocks were 37% lower.

Many gurus who gave sell signals last Christmas and stayed out of the market this year are now giving buy signals.

The point is to be careful know even though the market is likely to go higher.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying stocks.  Smart money is inactive.

Gold

The momo crowd is buying gold.  Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

The momo crowd is buying oil.  Smart money is inactive.

For longer term, please see oil ratings.

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.

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Markets

Our very, very short-term early stock market indicator is positive but understand that the market is very overbought.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking down and bonds are ticking up.

The dollar is slightly stronger.

Gold futures are at $1487, silver futures are at $17.41, and oil futures are $60.33.

S&P 500 resistance levels are 3256, 3288 and 3300; support levels are 3223, 3200 and 3143.

DJIA futures are up 64 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 20% – 30% and short to medium-term hedges of  5% – 15% and short term hedges of 0% – 10%.

 

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