WEEKLY MARKET DIGEST: HAPPY THANKSGIVING, STRONG ECONOMIC DATA, PROGRESS IN TRADE TALKS $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.

HAPPY THANKSGIVING, STRONG ECONOMIC DATA, PROGRESS IN TRADE TALKS

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

Happy Thanksgiving

Happy Thanksgiving to everyone!  Our offices will be closed on Friday and there will be no Morning Capsule.

Strong Economic Data

Initial Jobless Claims came at 213K vs. 220K consensus.

Durable Goods Ex-trans came at 0.6% vs. 0.2% consensus.

GDP-Second Estimate came at 2.1% vs. 1.9% consensus.

Trade Talks

Trump says that he is in the ‘final throws’ of trade talks.

Momo Crowd And Smart Money In Stocks

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

Gold

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

Gold is also seeing selling on strong economic data.

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

Home builder stocks are tracing a continuation diamond.  This is bullish.  ETF of interest is XHB.

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 positive.  Traditionally the day before Thanksgiving is a positive day in the market. 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 up and bonds are ticking down.

The dollar is stronger.

Gold futures are at $1453, silver futures are at $17.07, and oil futures are $58.40.

S&P 500 resistance levels are 3200 and 3223; support levels are 3125, 3100 and 3050.

DJIA futures are down 5 points.

LOW LIQUIDITY MAKING IT EASY TO PUSH STOCKS AROUND, FDA CBD WARNING

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

Low Liquidity

Liquidity is low due to the holiday day.  Low liquidity is making it easy to push stocks around. Historically this is a positive week.

Trade Talks

The U. S. and China have held a phone call that shows progress.

Momo Crowd And Smart Money In Stocks

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

Gold

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

For longer term, please see gold and silver ratings.

Oil

The momo crowd is buying oil.  Smart money is selling into the strength.

For longer term, please see oil ratings.

Marijuana

The FDA has issued a  warning about CBD.  We will do a separate post.

The momo crowd is 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 neutral and can easily swing either way due to low liquidity.  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 weaker.

Gold futures are at $1455, silver futures are at $16.92, and oil futures are $58.34.

S&P 500 resistance levels are  3143 and 3200; support levels are 3125, 3100 and 3050.

DJIA futures are up 23 points.

OPTIMISM OVER NEWS OF IP AND CONSENSUS ON TRADE BUT INVESTORS OUGHT TO BE CAREFUL

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

Twin News From China

There are two pieces of news on China trade deal. First, China is promising more protection for intellectual property. Second, in spite of contradictory media reports about a trade deal, there is some credibility to Gao Lingyun, an expert who is apparently close to the trade talks, stating that the two sides have reached a broad consensus for the phase one agreement. Wall Street is optimistic. How should investors think about these positive reports on trade? Let’s explore with the help of two charts.

The Chart

Please click here for an annotated chart of S&P 500 ETF (SPY).

Please click here for an annotated chart of Dow Jones Industrial Average ETF (DIA).

For the sake of transparency, both of these charts were previously published and no changes have been made.

Note the following:

  • For a longer term perspective, the first chart is a monthly chart.
  • For a shorter term perspective, the second chart is a weekly chart.
  • The monthly chart shows that the stock market is extended way above the trend line. This is a negative.
  • The monthly chart shows RSI divergence. In plain English, this means that as the stock market has made new highs, RSI is significantly below the prior high. This is a negative.
  • The weekly chart shows that there is a good set up for Dow Jones Industrial Average (DJIA) to reach the first target of 30,000.
  • RSI on the weekly chart shows that the market is overbought but there is room to run. Often this means a very short term pullback and then a higher high.

What Does It All Mean?

When I gave a “buy” signal on Donald Trump’s election at a time when many were predicting a big stock market drop, it was at first met with incredulity. When I called for a high-probability scenario of the Dow Jones Industrial Average DJIA hitting 30,000 points in Trump’s first term, I received a ton of hate mail. I have subsequently repeated Dow 30,000 in Trump’s first term several times.

Now, a few years later, Dow 30,000 calls are commonplace. So what’s next for the stock market?

Even though there are higher projections, investors ought to be careful because the market is controlled by the momo (momentum) crowd. The momo crowd is buying simply because the market is going up. The market is going up on performance chase by money managers going into the year-end. However this can quickly end on the slightest shift in momentum as money managers may decide to lock in profits.

There is a mistaken belief that popular large-cap stocks such as Apple (AAPL), Amazon (AMZN), Facebook (FB) and Microsoft (MSFT) are safe. These stocks carry heavy weighting in indexes. If the market sells off, the selling will first start in futures and ETFs. The large-cap stocks will be sold irrespective of their individual merits. Semiconductor stocks are leading indicators. Consider carefully watching stocks of Intel (INTC), AMD (AMD), Micron (MU) and NVIDIA (NVDA).

Also keep an eye on gold and silver. Gold ETF (GLD), silver ETF (SLV) and precious metal miner ETF (GDX) are seeing selling on the news from China. If there is a reversal in precious metals to the upside, that may be an early sign for more caution on the stock market.

Momo Crowd And Smart Money In Stocks

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

Gold

Gold is being sold on news from China.  The momo crowd is aggressively selling gold.  Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

Oil is being bought on news from China.  The momo crowd is buying oil.  Smart money is inactive.

For longer term, please see oil ratings.

Marijuana

CGC has received approval for a beverage facility in Canada.  This is creating optimism for marijuana 2.0.

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.

Markets

Our very, very short-term early stock market indicator is positive but can quickly turn negative.  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, bonds and currencies are range bound.

Gold futures are at $1455, silver futures are at $16.88, and oil futures are $57.65.

S&P 500 resistance levels are  3125, 3143 and 3200; support levels are 3100, 3050 and 3020.

DJIA futures are up 75 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 22% – 32% and short to medium-term hedges of  5% – 15% and short term hedges of 5% – 15%.

 

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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