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.
UNEASINESS BEFORE THE HURRICANE, HEAVY DEMAND FOR SAFE HAVENS
To gain an edge, this is what you need to know today.
Uneasiness
There is uneasiness in all markets before the weekend ahead of the hurricane hitting Florida and potential missile test by North Korea.
There is heavy demand for safe havens.
Stocks
The momo crowd is aggressively selling stocks in early trading. The ‘smart money’ is inactive.
Gold
Gold is being aggressively bought by the momo crowd. The smart money is inactive.
Bonds, Yen And Euro
There is heavy buying in bonds, yen and euro.
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.
Interest rates are falling.
Gold futures are at $1351, silver futures are at $18.16, and oil futures are $49.03.
S&P 500 resistance level is 2500; support levels are 2450, 2425, and 2400.
DJIA futures are down 64 points.
MARKET IS ASSUMING IRMA HITTING FLORIDA HARD IS A CERTAINTY, HIGHEST GROWTH FORECAST FOR EUROPE SINCE 2007, BUYING IN GOLD ON ECB
To gain an edge, this is what you need to know today.
Irma
The market is assuming that hurricane Irma hitting Florida is a certainty. It is forecast that Irma will hit Miami by Sunday afternoon.
Stocks being hit hard include the following:
- Insurers such as, UVE, PGR, TRV and ALL.
- Cruise lines such as RCL and CCL.
- Airlines such as AAL, UAL and JBLU.
The following stocks and ETFs are being bought.
- Generator manufacturer GNRC
- Home improvement stores such as HD and LOW.
- Rental car companies such as CAR and HTZ.
- RV manufacturers such as WGO and THO.
- Building materials such as USG and EXP
- Various energy stocks and oil. ETFs that are moving are XLE and OIH.
From our sources, here is the insight. Contrary to what the media is saying, there is still a fair probability that Irma may not hit Florida hard. If this comes true, then on Monday many of the moves being seen will reverse and there may be several trading opportunities. The problem with buying or short selling these stocks or ETFs now is that the storm is not projected to hit until Sunday when the markets are closed. On Monday these stocks can gap up or down potentially either making a lot of money or losing a lot of money. There is not a good way to control the risk.
Highest Growth Forecast For Europe Since 2007
ECB has raised forecast for Europe to 2.2%. This is the highest growth rate since 2007. Here is the other important information coming out of ECB:
- No change in interest rates.
- Expansion not boosting inflation.
- Bond buying (QE) can continue beyond December if needed.
Buying In Gold On ECB
The momo crowd is aggressively buying gold on ECB statement and conference. Gold briefly crossed $1350 before pulling back.
The ‘smart money’ is inactive.
Oil
The main driver for oil is the path of Irma.
API data showed a build of 2.79 million barrels in line with the consensus.
EIA data will be released today.
Technical Patterns
French stocks are tracing a Continuation Diamond. This is bullish. ETF of interest is EWQ.
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.
Dollar is weaker.
Interest rates and bonds are range bound.
Gold futures are at $1346, silver futures are at $18.02, and oil futures are $48.90.
S&P 500 resistance level is 2500; support levels are 2450, 2425, and 2400.
DJIA futures are up 9 points.
UNEASY CALM, SMART MONEY BUYING EMERGING MARKETS, BEIGE BOOK AND ECB AHEAD
To gain an edge, this is what you need to know today.
Uneasy Calm
There is an uneasy calm in most markets awaiting further news from North Korea and about the path of hurricane Irma.
Smart Money Buying Emerging Markets
On the dips, the ‘smart money’ is lightly buying emerging markets of India, Indonesia and Vietnam. Based on Trump’s threats against China, there was an expectation of the smart money selling Chinese shares. However no such selling is occurring.
Smart Money In U. S. Stocks
The smart money has been inactive in U. S. stocks during this dip.
Beige Book And ECB Ahead
The Fed will release its Beige Book at 2:00 pm ET. This is often a market moving event.
Tomorrow morning we will be looking for clues from ECB after its meeting for the course of the monetary policy in Europe.
Gold
The smart money is inactive. Even the momo crowd is not buying today. Trading is range bound.
Oil
Oil is moving up on concerns that hurricane Irma may take a westward turn and damage oil platforms in the Gulf of Mexico.
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.
After a strong move yesterday, bonds are pulling back slightly interest rates are ticking up slightly after yesterday’s move lower.
Dollar continues to be weak.
Gold futures are at $1344, silver futures are at $18.02, and oil futures are $49.28.
S&P 500 resistance level is 2500; support levels are 2450, 2425, and 2400.
DJIA futures are up 69 points.
STOCK AND GOLD MOMO CROWD DIVERGE ON N. KOREA HYDROGEN BOMB, POSITIVE FED SPEAK, OIL HIGHER AND GASOLINE LOWER, IRMA MAY HEAD TO FLORIDA
This is what you need to know today.
Hydrogen Bomb
N. Korea has moved the tension several notches higher by testing a hydrogen bomb. The U. S. Ambassador to the United Nations said that N. Korea is, “Begging for war.”
There are credible reports that N. Korea is preparing to test a new ICBM before Saturday.
Japan is reportedly planning to evacuate 60,000 Japanese from South Korea even if the U. S. has a secret plan to potentially strike N. Korea.
Trump is threatening trade sanctions against any country that does business with N. Korea. Most of N. Korea’s business is with China. If Trump carries out his threat, it will start a big trade war problematic for the economy.
Stock Momo Says N. Korea No Big Deal And Trump Threat Hollow
The momo (momentum) crowd is aggressively buying the slight dip in the pre-market in stocks. The thinking appears to be that N. Korea is simply an irritant and not a big deal. Trump’s threat against China is also not being believed.
The ‘smart money’ is inactive.
Gold Momo Says N. Korea A Big Deal
The momo crowd in gold is diverging from the stock momo crowd. In general, these two crowds are made of different people with different analysis.
The gold momo crowd is aggressively buying gold and silver on N. Korea hydrogen bomb.
The smart money is inactive in gold and silver.
Positive Fed Speak
Fed governor Brainard is saying that economic outlook has improved notably.
Oil Higher And Gasoline Lower
As Harvey waters recede, oil is moving higher and gasoline is moving lower.
As a full disclosure, ZYX Buy took a long position in oil ETF USO and ZYX Short took a short position in gasoline ETF UGA.
IRMA May Head To Florida
New category 5 hurricane Irma may potentially be heading to Florida.
The smart money is selling auto insurance stocks such as PGR, ALL and UVE in early trading.
China Crack Down On Initial Coin Offerings
China is cracking down on initial coin offerings. These are the popular cryptocurrencies similar to Bitcoin. In early trading the smart money is selling AMD and NVDA.
Technical Patterns
Several Canadian stocks are trading a Continuation Diamond Pattern. This is bullish. ETF of interest is EWC.
South Korean stocks are tracing a Flag. This is bearish. ETF of interest is EWY.
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.
Dollar is weak, yen is stronger.
Bonds are being aggressively bought, interest rates are ticking down.
Gold futures are at $1336, silver futures are at $18.00, and oil futures are $48.03.
S&P 500 resistance level is 2500; support levels are 2450, 2425, and 2400.
DJIA futures are down 66 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% – 29% and short to medium-term hedges of 15% – 25% and very short term hedges of 15%.
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