WEEKLY MARKET DIGEST: GO FIGURE — U. S. STOCKS MOVE UP OVER 400 POINTS FROM THE LOW AND CHINESE STOCKS JUMP 3.1% ON TARIFFS $DIA $GLD $QQQ $SLV $SPY $TBT

WEEKLY MARKET DIGEST: GO FIGURE — U. S. STOCKS MOVE UP OVER 400 POINTS FROM THE LOW AND CHINESE STOCKS JUMP 3.1% ON TARIFFS $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.

GO FIGURE — CHINESE STOCKS JUMP 3.1% AS TARIFFS GO INTO EFFECT, COOLER INFLATION

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

Tariffs

Not only tariffs increased to 25% from 10% on $200 billion of Chinese goods, Trump made two new points.

  • He is planning for new 25% tariffs on an additional $325 billion of Chinese goods.
  • Trump saw no need to rush into a trade deal.

U. S. Stocks

Investors need to carefully listen to the message of the markets. A rational response would have been for the stock futures to fall on the new pronouncements that were not discounted in the markets.  Instead buying came into the futures.

Chinese Stocks Jump 3.1%

These tariffs are going to hurt the Chinese economy.  What did Chinese stocks do after the imposition of the tariffs? They jumped 3.1%.  The government sponsored funds were heavy buyers of Chinese stocks.

Inflation Cools

Core CPI came at 0.1% vs. 0.2% consensus.  This indicates cooling inflation.

Momo Crowd And Smart Money In Stocks

The momo crowd is buying stocks in the early trade.  Smart money is inactive.

Gold

There is no discernable momo crowd and smart money activity.

Oil

There is no discernable momo crowd and smart money activity.

Marijuana

There is no discernable momo crowd and smart money activity.

Technical Patterns

Emerging markets are tracing an exhaustion bar. This is bullish.  ETF of interest is EEM.

Utilities are tracing a triple top. This is bearish. ETF of interest is XLU.

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, expect the market to open lower and it can easily move in either direction.

Interest rates are ticking up and bonds are ticking down.

Currencies are range bound.

Gold futures are at $1289, silver futures are at $14.83, and oil futures are $61.82.

S&P 500 resistance levels are 2860, 2918 and 2925; support levels are 2840, 2800 and 2765.

DJIA futures are down 73 points.

TRUMP SAYS ‘CHINA BROKE THE DEAL,’ U. S. THREATENS IRAN

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

China Broke The Deal

Trump says, ‘China broke the deal.’

China’s top negotiator, Liu He, is in Washington leading the negotiations.

There is no change in probabilities that were given for the stock market in yesterday’s Morning Capsule.

Jobless Claims

Initial Jobless Claims came at 228K vs. 220K consensus.

Inflation

Core Producer Price Index (PPI) came at 0.1% vs. 0.2% consensus.

Momo Crowd And Smart Money In Stocks

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

Gold

There is no discernable momo crowd or smart money activity.

Oil

After Iran announced that it would no longer keep curbs  on its nuclear program the U. S. is threatening Iran with a show of force.

The momo crowd is getting whipsawed in oil. The smart money is inactive.

Marijuana

CRON reported earnings this morning.  We are still in the process of analyzing the earnings.

The momo crowd is lightly buying.  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 negative but can quickly swing positive based on news.

Interest rates are ticking up bonds are ticking down.

The dollar is slightly stronger.

Gold futures are at $1281, silver futures are at $14.72, and oil futures are $61.54.

S&P 500 resistance levels are 2860, 2918 and 2925; support levels are 2840, 2800 and 2765.

DJIA futures are down 284 points.

TRADE TALKS, IRAN NUKES, STOCK MARKET SETS UP TWO TRAPS AND INVESTORS ARE FALLING INTO THEM

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

Trade Talks

The downtrend continues leading up to the Friday deadline. The trend can quickly reverse based on news and rumors.

Two Traps

Nobody likes to fall into a trap. Yet investors are falling into two traps that the stock market has potentially set up. Let’s explore with the help of a chart.

Please click here for an annotated chart of ETF S&P 500 ETF (SPY) that represents S&P 500 (SPX). Similar conclusions can be drawn from the charts of Dow Jones Industrial Average (DJIA), Nasdaq 100 ETF (QQQ) and small-cap ETF (IWM). Please note the following:

  • The chart shows two potential traps that the stock market has set up and investors are falling into.
  • The potential bull trap is characterized by the breakout of stock prices above the green line shown on the chart.
  • The potential bear trap is shown by the stock prices falling below the orange line shown on the chart.
  • Only one of these two traps will become valid,
  • There is no way to know with 100% certainty which trap will become valid.
  • Under these circumstances, investors ought to pay attention to Arora’s Third Law of Investing and Trading: Making investing and trading decisions based on probabilities is the only realistic and profitable approach.

Probabilities

In our analysis at the Arora Report, the following are the probabilities:

  • Bull trap coming true –30%
  • Bear trap coming true –45%
  • Whipsaws –25%

The highest probability is the bears getting trapped. In plain English, this means there is a 45% probability of the market going higher.

Supports And Target Zones

Please click here to see support and target zones. Please see an earlier Morning Capsule for details.

Important Stocks To Watch

Stocks with little direct exposure to China such as Google (GOOG) (GOOGL), Amazon (AMZN) and Facebook (FB) are likely to be least affected. Stock with direct exposure to China like Apple (AAPL), Starbucks (SBUX), Nike (NKE) and Boeing (BA) are likely to be most affected. Semiconductor stocks such as Intel (INTC), AMD (AMD), Micron (MU) and Qorvo (QRVO) may see wild swings. Chinese stocks such as Alibaba (BABA) and JD.com (JD) may also see wild swings.

Portfolios Protected

The Arora Report portfolios were well protected before the downdraft started. We increased protection on Monday and the rally on Monday from the lows gave advantageous fills. How could you have also protected your portfolios in advance? Start with Arora’s Second Law of Investing and Trading: Nobody knows with certainty what is going to happen next in the markets.

Momo Crowd And Smart Money In Stocks

The momo crowd is selling and smart money is inactive.

Gold

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

Oil

Iran is threatening to go back to the path of developing a nuclear bomb.  The oil market is ignoring it so far.

There is no discernable momo crowd or smart money activity.

Marijuana

The market is waiting for CRON earnings.  There is no discernable momo crowd or smart money activity.

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 quickly reverse.

Interest rates are ticking up and bonds are ticking down.

The dollar is stronger.

Gold futures are at $1291, silver futures are at $14.92, and oil futures are $61.48.

S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.

DJIA futures are down 59  points.

MOMO GETTING WHIPSAWED ON TRADE NEWS, U. S. AIRCRAFT CARRIER TO WARN IRAN

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

Whipsaws On Trade News

In yesterday’s Morning Capsule we wrote:

Whipsaws

The best thing investors can do is to guard against whipsaws. Expect many whipsaws based on rumors, tweets and new reports.

Yesterday morning the momo crowd was aggressively selling on the news of potential tariffs. Later when the Chinese confirmed that they were coming to Washington for trade negotiations, the momo crowd aggressively bought.  After the market close, it was announced that tariffs will go into effect on Friday.

The momo crowd sold on the news and the market fell.

While the momo crowd was getting whipsawed, what did smart money do? Smart money did absolutely nothing, avoiding the pain of getting whipsawed.

Momo Crowd And Smart Money In Stocks

The momo crowd is selling in the early trade.  Smart money is inactive.

Gold

Trading in gold is listless.  There is no discernable momo crowd or smart money activity.

Oil

The U. S. is deploying an aircraft carrier group in the Persian Gulf to warn Iran.

Yesterday morning oil was falling on concerns about trade war with China.  If there is a trade war, economic growth will slow. Lower economic growth means lower demand for oil.  Subsequently as the word spread of the U. S. aircraft group deployment, the momo crowd aggressively bought oil.

This morning the momo crowd is aggressively selling oil on the prospect of tariffs going into effect on Friday.

Marijuana

There is no discernable momo crowd or smart money activity in the early trade.

Technical Patterns

Chinese technology stocks are tracing a triple top. This is bearish.  ETF of interest CQQQ.

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 on trade news.

Interest rates are ticking up and bonds are ticking down.

Currencies are range bound.

Gold futures are at $1280, silver futures are at $14.82, and oil futures are $61.54.

S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.

DJIA futures are down 168 points.

TRADE GAME ON — A SETUP FOR AN EXPLOSIVE RALLY AND SUPPORT ZONES, RAISE CASH AND HEDGES

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

Trade Game On

The markets across the world are falling.

From a pure investment and trading perspective, the real question is how investors may want to react to President Trump threatening to put more tariffs on Chinese goods. Let’s explore with the help of a chart.

Please click here for an annotated chart of ETF S&P 500 ETF (SPY) that represents S&P 500 (SPX). Similar conclusions can be drawn from the charts of Dow Jones Industrial Average (DJIA), Nasdaq 100 ETF (QQQ) and small-cap ETF (IWM). Please note the following:

  • The Chinese are notorious for dragging out negotiations to get the best deal. Irrespective of your political leanings, Trump’s latest move seems to be in the long term best interest of the United States and the stock market.
  • The short term for the stock market is a different story.
  • The chart shows five different support zones. These support zones are based on a number of factors that have proven to be accurate in the past including how algorithms tend to trade and money flows.
  • The chart shows the target zone for a potentially explosive rally on a short squeeze. If it turns out that there is a good trade deal soon, those who are short selling now will be forced to cover at much higher prices.
  • Expect stocks that are dependent on China to be affected more. These include Apple (AAPL), Starbucks (SBUX), Nike (NKE) and Yum China (YUMC). Expect less impact on Google (GOOG) (GOOGL), Amazon (AMZN) and Facebook (FB). Microsoft (MSFT) and semiconductor stocks such as Intel (INTC), AMD (AMD) and Micron (MU) may be adversely affected.
  • Expect Chinese stocks such as Alibaba (BABA) and JD.com (JD) to be adversely affected.
  • Expect day traders to make money by trading leveraged Chinese ETFs (YING) and (YANG).

Whipsaws

The best thing investors can do is to guard against whipsaws. Expect many whipsaws based on rumors, tweets and new reports.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively selling stocks in the early trade.  Smart money is inactive.

Gold

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

Oil

The momo crowd is aggressively selling oil.  Smart money is inactive.

Marijuana

The momo crowd is aggressively selling marijuana in the early trade. 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 negative but can quickly turn.

Interest rates are ticking up and bonds are ticking down.

The dollar  and yen are stronger.

Gold futures are at $1279, silver futures are at $14.80, and oil futures are $61.52.

S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.

DJIA futures are down 501 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% – 20% and short term hedges of 10%.

 

A knowledgeable investor would have turned $100,000 into over $1,000,000 with the help from The Arora Report. NOW YOU TOO CAN ALSO SPECTACULARLY SUCCEED AT MEETING YOUR GOALS WITH THE HELP OF THE ARORA REPORT. You are receiving less than 2% of the content from our paid services. …TO RECEIVE REMAINING 98% INCLUDING MANY ATTRACTIVE INVESTMENT OPPORTUNITIES, TAKE A FREE TRIAL TO PAID SERVICES.

Please click here to take advantage of a FREE  30 day trial.

Check out our enviable performance in both bull and bear markets.

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