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.
FASTEST GROWTH IN FOUR YEARS BUT DO NOT EXPECT IT TO CONTINUE
To gain an edge, this is what you need to know today.
Fastest Growth In Four Years
GDP came at 4.1%. This is the fastest growth in four years. However, keep in mind that this is in line with consensus. As a result there is no big impact on the market.
In our analysis, a big part of this strong number is related to trade issues and inventory building. This is not likely to continue. We expect GDP to weaken in the coming quarters.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying in the early trade. The smart money is lightly selling some high beta popular stocks such as AMZN into the strength. Interestingly the momo crowd is aggressively buying AMZN.
Gold
The momo crowd is trying to run gold up. Historically gold runs up on the GDP day. However rallies are being met with some selling.
There is no smart money buying.
Oil
Oil is running up on a short squeeze.
Technical Patterns
Home builders are tracing an Inside Bar. This is bullish. ETF of interest is XHB. Traders may consider ITB.
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 easily swing either way.
The dollar is range bound.
Interest rates are ticking down and bonds are ticking up.
Gold futures are at $1224, silver futures are at $15.50, and oil futures are $69.50.
S&P 500 resistance levels are 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are up 5 points.
FACEBOOK WIPEOUT AND TRUMP TRADE DEAL
To gain an edge, this is what you need to know today.
Facebook Wipeout
We will do a separate post on the subject, however this may dampen the sentiment.
Trade Deal
Trump seems to be on the verge of making a trade deal with Europe. This is very bullish.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying. The smart money is inactive.
ECB And Economic Data
There is a lot of economic data and results of the ECB meeting. However market is ignoring all of this for the time being.
Gold
Gold is experiencing mild selling.
Oil
Oil is seeing buying because of a short squeeze
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.
Interest rates and bonds are range bound.
Gold futures are at $1227, silver futures are at $15.53, and oil futures are $69.25.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are up 59 points.
PAY ATTENTION TO THE REVERSAL IN THIS INDEX DOMINATED BY POPULAR STOCKS
To gain an edge, this is what you need to know today.
Reversal
This market is controlled by the momo (momentum) crowd and nothing else seems to matter. Prudent investors should not become complacent and stay alert to the reversal traced on the chart irrespective of the other near term price action.. Let’s examine the chart.
Please click here for an annotated chart of Nasdaq 100 ETF (QQQ). This ETF is dominated by popular stocks such as Facebook (FB), Amazon (AMZN), Apple (AAPL), Google (GOOG) (GOOGL) and Netflix (NFLX). Please note the following from the chart:
- QQQ broke out on good earnings. This is considered positive.
- The chart shows that QQQ went higher after a gap up opening but then reversed. This is considered negative.
- The close was not at the low but near the low. This is considered negative.
- RSI shows a divergence as shown on the chart. This is considered negative.
The sum total of the foregoing is to not be complacent. In the pre-market, when QQQ was hitting highs, we shared with The Arora Report subscribers in the Morning Capsule, made available to them every morning that while the momo crowd was aggressively buying the smart money was lightly selling into the strength. In this case, that was an early warning of a potential reversal.
Momo Crowd And Smart Money In Stocks
The momo crowd is lightly buying. The smart money is inactive.
Gold
Gold is bouncing from the oversold condition.
Oil
Oil is seeing strong buying.
Technical Patterns
Mexican stocks are tracing a Flag. This is bullish. ETF of interest is EWW.
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 negative and the indicator can swing quickly either way.
Interest rates are ticking down and bonds are ticking up.
The dollar is slightly weaker.
Gold futures are at $1233, silver futures are at $15.65, and oil futures are $68.76.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are down 59 points.
MOMO IGNORES WEAK PMIS AND WEAK EARNINGS
To gain an edge, this is what you need to know today.
Weak PMIs
PMIs coming out of Japan and Europe are weaker than expected. A PMI is a leading indicator and carries a heavy weight in our timing models.
Poor Earnings
With the exception of GOOG, major earnings released since the market close yesterday on the average are weaker than expected. Examples include WHR, MMM and UTX.
Momo Crowd And Smart Money In Stocks
The momo crowd is ignoring weak PMIs and poor earnings. The momo crowd is aggressively buying this morning. The smart money is lightly selling into the strength.
Gold
Trading is gold is listless.
Oil
Trading in oil is listless.
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.
Interest rates moved up yesterday and bonds fell.
Gold futures are at $1227, silver futures are at $15.53, and oil futures are $67.94.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2765, 2740 and 2700.
DJIA futures are up 89 points.
TENSIONS WITH IRAN INCREASE BUT FEARS OF A CURRENCY WAR LESSEN
To gain an edge, this is what you need to know today.
Iran
Trump issued a strongly worded tweet warning Iran in response to Iran’s warning to the U. S. against threatening its oil exports. This is dampening the sentiment in financial markets.
Currency War
Statements from the U. S. and China have lessened the fear of a currency war. This is counteracting the negative sentiment from the Trump tweet on Iran.
Momo Crowd And Smart Money In Stocks
Both momo crowd and smart money are inactive.
Gold
Trading in gold is listless.
Oil
Oil is seeing significant buying on Trump tweet.
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 easily move either way.
Currencies, interest rates and bonds are range bound.
Gold futures are at $1226, silver futures are at $15.42, and oil futures are $68.97.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2765, 2740 and 2700.
DJIA futures are down 13 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 10% – 15% and very short term hedges of 10%.
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