WEEKLY MARKET DIGEST: BETTER JOB PICTURE GOOD FOR STOCKS, CHINESE JUMP INTO SILVER, OIL RESPONDS $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

 WEEKLY MARKET DIGEST: IMPROVING JOB PICTURE GOOD FOR STOCKS, CHINESE DAY TRADERS JUMP INTO SILVER AND OIL RESPONDS TO FUNDAMENTALS $DIA $GLD $QQQ $SLV $SPY $TBF $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.

EMPLOYMENT PICTURE GETS STRONGER

This is what you need to know today. 

Employment Report 

June Employment Report shows Nonfarm Private Payrolls increased by 265K vs. 170K consensus. With this number, now we know that the may number was an aberration, we previously wrote that this was likely.  Our analysis has proven to be spot on.

Bonds

Bonds should have precipitously dropped on the employment number.  However they dropped only a little bit and have since rebounded.  Bonds are behaving abhorrently.  The reason behind this abhorrent behavior is not clear at this time.

Stock Groups

Expect banks, technology, and industrials to benefit.  Expect telecoms, utilities and staples to weaken.

Precious Metals

Silver fell to 11% from its most recent high over the long weekend.  Momo crowd immediately stepped in with aggressive buying. Silver has since rebounded.  Gold is following the same pattern but not as violently as silver.

Markets

Our very, very short-term early stock market indicator is positive.

We have been sharing with you that oil fundamentals did not support the price above $50. Yesterday it was evident in inventory numbers.  This morning oil has traded as low as $45.30.

Yen is behaving abhorrently just like bonds, first falling then rising again.

Gold futures are at $1350, silver futures are at $19.72, and oil futures are $45.07.

S&P 500 resistance levels are 2120, 2132 and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are up 97 points.

STRONG ADP DATA, CRITICAL MARKET MOVING EMPLOYMENT REPORT TOMORROW, HOT MONEY RUSHES INTO GOLD AND SILVER

This is what you need to know today.

Strong Economic Data

ADP Employment Change came at 172K vs. 152K consensus.  A higher number is better for the U. S. economy.

Initial Jobless Claims came at 254K vs. 268K consensus.  Lower number is better for the U. S. economy.

Yesterday ISM Data was stronger than expectations.

FOMC

FOMC minutes show that the primary focus of the Fed is U. S. employment picture.  The data released this morning shows that the U. S. picture is getting better. If the employment picture stays on this track, at least one rate rise this year is likely.  However, gold market is positioned for no rate rise until 2018.

The foregoing shows that there is much higher risk in gold and silver than understood by the masses.

Hot Money In Gold And Silver

Hot money is flowing at a rapid clip into gold and silver. Over the last few days, a big portion of hot money has come from China.

Even in the United States, hot money is flowing into ETF GLD.

Please click here for an annotated chart 

We will do a post later  today on how to interpret the chart.

Market Moving Report Tomorrow

The U. S. Department of Labor will release June Employment Report tomorrow at 8:30 am ET.  This has the potential to be a key market moving event.

Markets

Our very, very short-term early stock market indicator is neutral but can quickly turn negative.

After strong employment data, interest rates are ticking up and bonds are giving up some of their recent gains.

Smart Money is lightly selling gold but momo crowd continues to aggressively buy gold and silver.  Gold and silver have given up gains from yesterday.

Currencies are mostly range bound.

Gold futures are at $1364, silver futures are at $20.01, and oil futures are $47.96.

S&P 500 resistance levels are 2100, 2120 and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are down 18  points.

POTENTIAL MARKET MOVING FOMC AND ISM ON TAP, CHINESE DAY TRADERS JUMP ON SILVER

This is what you need to know today.

FOMC Minutes

FOMC minutes are often a market moving event.  These minutes will be released at 2:00pm ET.  Please stay extra alert at this time in case there are opportunities.

ISM

ISM Non-Manufacturing Data will be released at 10:00 am ET.  This data is also often a market moving event.

Typically gold responded to ISM data.  However, it is not clear if gold responds to any negative news for gold at this time.

Silver

Chinese day traders have now jumped onto silver.  Their actions cause up-spikes in silver as they mostly buy.  Gold goes along for the ride.

British Pound

British pound hit it a 31 year low.  As a full disclosure, ZYX Short Sell Change Alert has a short position in British pound.

Markets

Our very, very short-term early stock market indicator is negative.

U. S. 10-year Treasury yields hit all time low.

Yen continues to strengthen as safe haven money moves to Japan.

Gold futures are at $1372, silver futures are at $20.20, and oil futures are $46.06.

S&P 500 resistance levels are 2100, 2120 and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are down 85 points.

ITALIAN PROBLEMS AND AGGRESSIVE SELLING IN OIL

This is what you need to know today.

Italian Problems

Ironically, Brexit has hit hard fragile Italian banking system. Italian bank stocks have been falling.  Italian Prime Minister, Renzi, is angling to provide state funds to the banks but this goes against EU rules and Germany is not supporting such a move.

Italian banks may be the next weak spot.

Oil

On the news that oil production was strong in Nigeria in June, oil started the day by being aggressively sold by Smart Money.  As losses mounted for the momo crowd, they started panicking and selling causing over 3% down move as of this writing.

Silver Short Squeeze

Silver short squeeze in the illiquid market of yesterday pushed silver to $21.20.  As liquidity is returning, silver has fallen back below $20.

Markets

Our very, very short-term early stock market indicator is negative.

Yen is strengthening.

Other currencies, interest rates and bonds are range bound.

Recent rally in copper is being sold.

Gold futures are at $1350, silver futures are at $19.84, and oil futures are $47.55.

S&P 500 resistance levels are 2100, 2120 and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are down 96 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 30 – 42% of assets in cash or treasury bills, and short to medium-term hedges of 30% of non-cash positions.

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