WEEKLY MARKET DIGEST: HIGHER CONSUMER SPENDING BUT LOWER PERSONAL INCOME, GOLD SOLD, CRUDE OIL BUILD, HIGHER STOCKS $DIA $GLD $QQQ $SLV $SPY

WEEKLY MARKET DIGEST: HIGHER CONSUMER SPENDING BUT LOWER PERSONAL INCOME, GOLD SOLD, CRUDE OIL BUILD, HIGHER STOCKS $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.

THIS ONE WORD FROM POWELL TELLS PRUDENT INVESTORS TO BE CAREFUL, NO CAPSULE ON FRIDAY

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

Message Of The Market

Sometimes the stock market sends a clear unambiguous message. Most investors are so caught up in their own opinions that they shut out the message.

This market is controlled by the momo (momentum) crowd. The momo crowd believes blue skies are ahead as far as they can see. The message the stock market sent during Fed Chair Powell’s press conference says that the market is vulnerable. Let’s explore with the help of a chart.

Please click here for annotated chart of S&P 500 ETF (SPY) that represents S&P 500 index (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 that the stock market moved up immediately after the Fed decision was announced.
  • The chart shows when Fed Chair Powell’s press conference started,
  • The chart shows aggressive selling on Powell stating that lower inflation was transitory. Bulls were hoping that lower inflation would prompt the Fed to lower interest rates. This stock market is addicted to low interest rates.
  • VUD indicator is the most sensitive indicator of supply and demand in real time. In very simple terms, stocks move down when supply exceeds demand and vice versa.
  • The chart shows VUD indicator with periods of orange and high amplitude. This indicates significantly higher supply of stocks than the demand.
  • Even Apple (AAPL) stock which was aggressively bought prior to Powell’s conference was not immune. Apple stock saw selling during and after the conference.
  • Please click here for the longer term chart showing Arora buy signal given on Christmas Eve. Christmas Eve has turned out to be the low of this cycle. For the sake of complete transparency, this chart is unchanged from the original publication. Ever since the Arora buy signal shown on the chart, VUD indicator has not shown such negativity until Powell conference. Prudent investors may want to make a note of this.

Momo Crowd And Smart Money In Stocks

The momo crowd is selling stocks in the early trade. Smart money sold yesterday afternoon near the highs but is inactive this morning.

Gold

Gold is being sold on a stronger dollar.  The momo crowd is selling gold.  Smart money is inactive.

Oil

Oil is being sold on a stronger dollar. The momo crowd is selling oil.  Smart money is inactive.

Marijuana

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

No Capsule On Friday

There will be no Morning Capsule on Friday.

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 are ticking down and bonds are ticking up.

Dollar is stronger.

Gold futures are at $1270, silver futures are at $14.63, and oil futures are $62.03.

S&P 500 resistance levels are 2925, 2950 and 3000; support levels are 2918, 2860 and 2840.

DJIA futures are down  27 points.

STRONG ADP EMPLOYMENT NUMBER, APPLE EARNINGS, FED MEETING AND CRUDE BUILD

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

Strong ADP

ADP is the largest private payroll processor in the country.  It uses its data to give a glimpse of the employment picture.

ADP Employment Change came at 275K vs. 170K consensus.

Apple Earnings

Apple AAPL earnings have a disproportionate effect on the stock market.  For this reason we often address it in the Morning Capsule.  Apple earnings were better than the consensus and the whisper numbers.  We will do a separate post on ZYX Buy.

Fed Meeting

The Fed will announce its decision at 2:00 pm.  Please see yesterday’s Morning Capsule.

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 or smart money activity in gold.

Oil

API data showed a crude build of 6.86 million barrels vs. consensus of 2 million barrel build.

This bearish data has stopped crude oil rally.

EIA data will be released at 10:30 am ET.

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.

Markets

Our very, very short-term early stock market indicator is positive but can easily swing positive.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1282, silver futures are at $14.83, and oil futures are $63.32.

S&P 500 resistance levels is 3000; support levels are 2950, 2925 and 2918.

DJIA futures are up 64 points.

 

MIXED EARNINGS, FED MEETING, OPEC PUSHES BACK AT TRUMP

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

Mixed Earnings

Earnings continue to be mixed.  DJIA constituents MCD, PFE and MRK reported earnings better than the consensus and the whisper numbers.

Market also likes that GE reported earnings better than consensus and the whisper numbers.

On the negative side, Alphabet (GOOG) (GOOGL) reported earnings worse than the consensus and whisper numbers.

Apple will report earnings after the close.  APPL earnings usually have a disproportional effect on the market.

Fed Meeting

The Fed meeting starts today.  The Fed will announce its decision at 2:00 pm tomorrow.  The consensus is that there will be no change in interest rates.

If the Fed is hawkish or dovish compared to the consensus, expect a significant move in the markets.

Momo Crowd And Smart Money In Stocks

The momo crowd is buying.  The smart money is inactive.

Gold

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

Oil

Oil prices had fallen when Trump pushed OPEC to increase oil production to  lower oil prices.  Now OPEC is pushing back.  Oil is rising on OPEC pushback.

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

Marijuana

OrganiGram  (OGRMF) a major Canadian marijuana company is headed for listing on a U. S. exchange.

The momo crowd is lightly 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 neutral.

Interest rates are ticking down and bonds are ticking up.

The dollar is weaker.

Gold futures are at $1282, silver futures are at $14.84, and oil futures are $64.41.

S&P 500 resistance levels are 2930 and 3000; support levels are 2925, 2918 and 2860.

DJIA futures are up 39  points.

HIGHER CONSUMER SPENDING BUT LOWER PERSONAL INCOME AND INFLATION

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

Personal Income And Spending

The U. S. economy is about 70% consumer based.  For this reason investors should pay attention to personal spending and personal income.

Personal Spending came at 0.9% vs. 0.8% consensus.

Personal Income came at 0.1% vs. 0.4% consensus.

Inflation

Fed’s favorite gage of inflation is Core PCE.  Core PCE came at 0.0% vs. 0.1% consensus.  This indicates that inflation is cooling.

Trade Talks

Trade talks are beginning again this week.  In our view, a successful trade deal with China is already discounted in the market.

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.

The stronger dollar is not helping gold.

Oil

The momo crowd is selling oil.  Smart money is lightly buying oil.

The selling in oil is prompted by Trump’s claim that he has spoken to OPEC about increasing production to lower oil prices.  However it is not clear that OPEC is listening to him.

Marijuana

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

Technical Patterns

Brazilian stocks are tracing a bottoming triangle.  This is bullish. ETF of interest is EWZ.

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.

Interest rates are ticking down and bonds are ticking up.

The dollar is stronger.

Gold futures are at $1284, silver futures are at $15.00, and oil futures are $63.00.

S&P 500 resistance levels are 2950 and 3000; support levels are 2925, 2918 and 2860.

DJIA futures are down 15 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 19% – 31% and short to medium-term hedges of  5% – 15% and short term hedges of 5%.

 

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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