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.
TAKE PARTIAL PROFITS ON HEDGES, POSITIVE SENTIMENT FROM CHINESE GOVERNMENT BUYING STOCKS, SMART MONEY BUYING MARIJUANA
To gain an edge, this is what you need to know today.
Take Partial Profits On Hedges
The stock market is oversold in the short term. The probability of a bounce has increased. For this reason, it is time to take more partial profits on short term hedges. For the current levels of cash and hedges, please scroll down to ‘What To Do Now’ section.
Chinese Government Buying Stocks
Positive sentiment from China is being carried to he U. S.
Overnight GDP in China disappointed by coming at 6.5%, this was below consensus. This is the lowest growth rate since the financial crisis in 2008.
The Shanghai Composite first fell 1.5%. There is speculation that the Chinese government stepped in to buy stocks leading to stocks moving up 2.6%.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks in the early trade. The smart money is also lightly buying.
Gold
Trading in gold is listless.
Oil
Oil is seeing some buying. In our analysis the buying is coming from short sellers buying to cover their positions to book profits.
Marijuana
There is an interesting new dynamic in marijuana this morning. As we have been sharing with you, lately smart money had been selling marijuana stocks. This morning in the early trade, smart money is lightly buying marijuana stocks. It appears that most of the buying is to book profits on short positions.
The momo crowd is aggressively buying marijuana stocks in the early trade.
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.
Currencies, interest rates and bonds are range bound.
Gold futures are at $1231, silver futures are at $14.73, and oil futures are $69.34.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are up 114 points.
FED THROWS A CURVE BALL, FORCED SELLING IN CHINA, OIL FALLS ON INVENTORIES
To gain an edge, this is what you need to know today.
Fed Throws A Curve Ball
FOMC minutes were hawkish vs. the consensus. In plain English, this means that the Fed wants to raise interest rates higher than the market is expecting. This is negative for stocks.
Forced Selling In China
Forced selling of stocks is occurring in China. This is not an unusual occurrence in when a large number of investors buy stocks on margin. Shanghai Composite fell almost 3%.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying stocks in the early trade. Smart money is selling stocks in the early trade.
Gold
Gold is weaker on a stronger dollar. The momo crowd is selling gold. The smart money is inactive.
Oil
Oil is falling on rising inventories. You may recall until recently the momo crowd was aggressively buying oil. Now the momo crowd is sitting on huge losses.
Our call on oil has proven spot on. We are effectively short oil from near the top. In addition to a short position is ZYX Short, there is also an inverse ETF in ZYX Buy to take advantage of the falling oil price.
Marijuana
The momo crowd is buying marijuana stocks in the early trade. The smart money is selectively buying some stocks and selectively selling other stocks.
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 but it can easily swing positive.
Interest rates are ticking up and bonds are ticking down.
The dollar is stronger.
Gold futures are at $1228, silver futures are at $14.64, and oil futures are $68.77.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are down 112 points.
GOOD GAINS BUT PART OF IT WAS SHORT SQUEEZE, FOMC MINUTES, SMART MONEY SELLS MARIJUANA ON CANADA LEGALIZATION
To gain an edge, this is what you need to know today.
Great Rally But A Part Of It Was Short Squeeze
Yesterday the stock market experienced a great rally on good earnings but about 40% of it was short squeeze.
Implication for investors is that the part of the rally that was based on short squeeze may retrace. Earnings released since yesterday are mixed.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks. The smart money is inactive.
FOMC Minutes
The down draft in the stock market over the last couple of weeks has been due to rising interest rates. The FOMC will release its minutes at 2:00 pm ET. The minutes may provide valuable information for the future direction of interest rates.
Gold
The dollar is stronger and that is not good for gold. However gold is set up for a rally from a technical perspective if the dollar weakens.
Oil
Trading in oil is listless.
Marijuana
Marijuana is now legal in Canada. As we had been anticipating and writing in advance, smart money sold marijuana stocks aggressively. The momo crowd kept on aggressively buying but was not able to overcome aggressive selling by the smart money.
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 expect the market to open lower.
Interest rates are ticking up and bonds are ticking down.
The dollar is stronger.
Gold futures are at $1235, silver futures are at $14.70, and oil futures are $71.07.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are down 114 points.
OPTIMISM ON GOOD EARNINGS, VERY POSITIVE SENTIMENT ON MARIJUANA STOCKS
To gain an edge, this is what you need to know today.
Optimism
There is a lot of optimism this morning on good earnings released so far.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks. Smart money is lightly selling into the strength.
Gold
Gold is seeing some buying on the weaker dollar.
Oil
Oil is range bound awaiting inventory data.
Marijuana
Sentiment is very positive on marijuana stocks as Canada is about to go legal tomorrow. The sentiment is about to enter the zone of extremely positive. Often extremely positive sentiment is a contrary indicator. In plain English, this means such stocks top out.
Momo crowd is aggressively buying marijuana stocks but smart money is selling into the strength. There is excitement about organic marijuana stock TGODF as it gets its medical license.
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 and bonds are range bound.
The dollar is weaker.
Gold futures are at $1234, silver futures are at $14.84, and oil futures are $71.41
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are up 224 points.
ASIA SPOILS THE PARTY, WEAKER RETAIL SALES, OIL RISES ON THE MISSING JOURNALIST
To gain an edge, this is what you need to know today.
Asia Spoils The Party
After constructive price action on Friday, hopes were high that this morning the market would gap open by a large amount. However Asia has spoiled the party in the early trade. Shanghai Composite in China fell to close at the lowest level since 2014. The weakness carried into Europe and is now coming to the early trade in the United States.
Weak Retail Sales
70% of the U. S. economy is consumer based. For this reason it is important to pay attention to retail sales. Retails sales Ex-auto came at -0.1% vs. +0.4% consensus. We exclude auto because auto sales data is very noisy and hinders analysis. Please click here to see how we filter the noise.
In a perverse way, weak sales may be positive for the stock market because they may hinder the Fed from aggressively raising rates. The Fed raising rates is the main cause for the recent down draft in the stock market.
Momo Crowd And Smart Money In Stocks
The momo crowd is acting like a yo-yo. The momo crowd was aggressively buying on Friday afternoon and aggressively selling earlier this morning. As of this writing, the momo crowd is aggressively buying again. The smart money is inactive.
Gold
Hedge funds are experiencing huge losses in gold because they had built up large short positions before this rise. Gold is experiencing a short squeeze.
Oil
Tensions are building with Saudi on the disappearance of a prominent journalist from Saudi consulate in Istanbul. Many western corporate leaders are dropping out of an event in Saudi. Trump is under pressure to punish Saudi. Saudi is responding by talking about $200 oil.
Marijuana
CGC is buying the assets of ebbu, a company that has made advances in cannabis infused beverages and a cannabis genetic breeding program.
The momo crowd is aggressively buying marijuana stocks in the early trade. The smart money is selling marijuana stocks into the strength.
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 but can easily swing positive.
Interest rates, bonds and currencies are range bound.
Gold futures are at $1235, silver futures are at $14.77, and oil futures are $71.81.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2740, 2700 and 2688.
DJIA futures are down 30 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 short term hedges of 3%.
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