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.
RETAIL SALES BOUNCE BACK, MUELLER REPORT, INGENIOUS MARIJUANA DEAL
To gain an edge, this is what you need to know today.
Retail Sales Bounce Back
The U. S. economy is about 70% consumer based. For this reason investors ought to pay attention to retail sales. Previously retail sales fell out of bed in December, now they have bounced back.
Retail Sales Ex-auto came at 1.2% vs. 0.7% consensus. We exclude auto because auto data is very noisy and hinders market timing. To see how we filter out the data in an adaptive algorithm, please click here.
Initial Jobless Claims
Initial Jobless Claims came at 192K vs. 208K consensus. This is a leading indicator and carries heavy weight in our models. This data continues to show that there is no recession nearby. You may recall that this series of data, in part, allowed us to give a buy signal on Christmas Eve. It has turned out that the buy signal was given right at the market low before a 22% bounce. Of interest is that many Wall Street banks and respected gurus were calling to sell stocks at that time.
We are mentioning that to help less sophisticated investors understand the value of the data that is published in the Morning Capsule.
Slow German Manufacturing
German manufacturing continues to be at recession levels. PMI came at 44.5 vs. 45 consensus. A number under 50 is considered recessionary.
Mueller Report
The Mueller Report will be released at 11:00 am. The consensus is that it should have no effect on the stock market but you never know. Investors ought to stay alert after the report is released.
Momo Crowd And Smart Money In Stocks
The momo crowd is lightly buying 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 lightly buying oil. Smart money is inactive.
Marijuana
There appears to be an ingenious marijuana deal. CGC appears to be buying a right to buy ACRGF when marijuana becomes federally legal in the United States.
CGC is a Canadian company listed on the NYSE. By law, if it touches marijuana in the United States, it cannot be listed on the NYSE. ACRGF is a multistate marijuana operator in the United States and is listed in Canada.
This ingenious arrangement gets around the restrictions imposed by the law.
The momo crowd is aggressively buying marijuana stocks in the early trade. Smart money is inactive.
Technical Patterns
Stocks in Taiwan are tracing an exhaustion bar. This is bearish. ETF of interest is EWT
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 easily swing either way.
Interest rates are ticking down and bonds are ticking up.
Currencies are mixed.
Gold futures are at $1275, silver futures are at $14.91, and oil futures are $64.20.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are up 61 points.
BETTER DATA FROM CHINA CREATES OPTIMISM, U. S. TRADE GAP NARROWS, OIL DRAW, MARIJUANA BUY
To gain an edge, this is what you need to know today.
China Data
China GDP came at 6.4% year over year vs. consensus of 6.3%. This is creating optimism in the stock market.
In our analysis, this data is already discounted in the stock market.
Trade Gap Narrows
The U. S. trade gap narrows to -$49.4 billion vs. -$54 billion.
In our analysis this is due to higher export of planes in the period for which the data is reported. Going forward grounding of Boeing’s (BA) 737 MAX may increase the trade gap.
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.
Oil
API showed a crude inventory draw of 3.096 million barrels vs. consensus of a build of 1.7 million barrels.
Brent crude has been strong.
The momo crowd is buying oil. Smart money is inactive.
Marijuana
There is optimism as a major Wall Street firm initiates CGC and APHA with a buy rating, (CRON has an underperform rating from this firm).
The momo crowd is buying marijuana stocks. Smart money is inactive.
Technical Patterns
Mainland China stocks are tracing a flag. This is bullish. ETF of interest is ASHR.
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 flip negative.
Interest rates are ticking up and bonds are ticking down.
Currencies are range bound.
Gold futures are at $1278, silver futures are at $15.04, and oil futures are $64.37.
S&P 500 resistance levels are 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are up 55 points.
POSITIVE FOR STOCKS AS SOME AT FED LOOK TO KEEP INTEREST LOWS TO LATE 2020, MONEY FLOWING INTO INDIA
To gain an edge, this is what you need to know today.
Positive For Stocks
Chicago Fed President Evans said that he can see the Fed keeping rates low until late 2020.
There seems to be similar sentiment on the part of several Fed officials.
There is a direct correlation between the Fed policy and the stock market. Assuming the Fed keeps interest rates at present levels until late 2020, this is positive for stocks.
Money Flowing Into India
The momo crowd foreign money has been flowing into India. Indian stocks hit new highs. Smart money does not seem to be buying into the frenzy to buy Indian stocks.
Voting for the second phase of the Parliament elections will take place on April 18th. If the price action in the stock market is to be believed, Prime Minister Modi will win the election. However, there is not much other data that supports this with a very high confidence level.
Investors pouring money into India right now are ignoring the risks.
Earnings
Important earnings this morning, including DJIA stocks UNH and JNJ are better than expected and are moving the market up in the early trade.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks this morning. Smart money is inactive.
Gold
The momo crowd is selling gold. The smart money is inactive.
Oil
There is no discernable momo crowd or smart money activity.
Marijuana
Some marijuana stocks have seen selling since we shared with you the formation of a bearish pennant pattern.
ACB is buying all shares of HEMP that it does not already own.
The momo crowd is lightly selling marijuana stocks in the early trade. Smart money is inactive.
Technical Patterns
Turkish stocks are tracing a hammer. This is bullish. ETF of interest is TUR.
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.
Interest rates are ticking up and bonds are ticking down.
Currencies are range bound.
Gold futures are at $1281, silver futures are at $14.87, and oil futures are $63.60.
S&P 500 resistance levels are 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are up 162 points.
TRUMP BLASTS FED CAUSING CONCERN — THE MARKET SHOULD BE 10,000 POINTS HIGHER, NO MARIJUANA DEAL
To gain an edge, this is what you need to know today.
The Market Should Be 10,000 Points Higher
Trump says that the market should have been 5,000 to 10,000 points higher if it were not for the Fed. Trump is blasting the Fed for reducing growth and capping stock prices.
It is very unusual for a president to criticize the Fed this aggressively. It is unprecedented. The Fed is an independent body and is supposed to be immune from political interference.
The matter seems so grave that ECB President Mario Draghi felt it necessary to express concern.
Momo Crowd And Smart Money In Stocks
So far only smart money is concerned about Trump’s attacks on the Fed and its long term negative implications for the U. S. economy.
In our analysis, in the short term Trump’s attacks on the Fed may help the stock market but in the long term they may hurt the stock market.
The momo crowd does not care and is buying stocks in the early trade. The smart money is selectively and lightly selling stocks.
Gold
The momo crowd is selling gold. Smart money is inactive.
Oil
The momo crowd is selling oil. Smart money is inactive.
Marijuana
APHA reports earnings less than the consensus. APHA also accelerates expiry of GGBXF bid and terminates option with GA Opportunities for $89 million. The stock is weak in the early trade. APHA is creating negative sentiment.
The momo crowd is selling marijuana stocks. Smart money is inactive. You may recall that the smart money mostly sold marijuana stocks into the strength when the momo crowd was buying. Now the momo crowd is selling into the weakness.
Technical Patterns
Several technology stocks are showing an inverted hammer. This is bearish. ETFs of interest are XLK and QQQ, and also inverse ETFs PSQ and SQQQ. Please note that it is unusual for this pattern to have formed at a time when the momo crowd is buying tech stocks so aggressively.
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.
Interest rates are ticking up and bonds are ticking down.
The dollar is weaker.
Gold futures are at $1287, silver futures are at $14.84, and oil futures are $63.47.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are down 1 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%.
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