WEEKLY MARKET DIGEST: JUST RELEASED DATA SHOWS RATE CUT FEVER IS MISPLACED — WILL THE FED PAY HEED? $DIA $GLD $QQQ $SLV $SPY $TBT $USO

WEEKLY MARKET DIGEST: JUST RELEASED DATA SHOWS RATE CUT FEVER IS MISPLACED — WILL THE FED PAY HEED? $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.

JUST RELEASED DATA SHOWS RATE CUT FEVER IS MISPLACED — WILL THE FED PAY HEED?

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

Just Released Data

Q2 GDP – Advanced came at 2.1% vs. 1.9% consensus.

Q2 GDP – Deflator-Advance came at 2.5% vs. 1.8% consensus.

Most importantly, consumer spending jumped 4.3%.

Fed

Will the Fed pay heed to the new data?  This is the last piece of important data before the Fed meeting next week.

Everyone is expecting the Fed to cut interest rates by at least 0.25%.  Many are expecting the Fed to cut by 0.5%.  The justification that is being advanced is that such a cut is needed as an insurance policy.  This is unprecedented in the recent history.  The reason that interest rates are not historically cut as an insurance policy is that there is a cost of the insurance policy.  The cost is inflating the asset bubble.

Momo Crowd And Smart Money In Stocks

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

Gold

The data just released is negative for gold.  However gold is experiencing a mini short squeeze after the release of the data.  Such short squeezes after release of a data that is negative for gold are common.

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

Oil

The momo crowd is acting like a yo-yo in oil.  Smart money is inactive.

Natural gas is being crushed. The momo crowd is aggressively selling natural gas.

Marijuana

The momo crowd is acting like a yo-yo in marijuana.  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 but expect the market to open strongly higher.  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.

Currencies are range bound.

Gold futures are at $1419, silver futures are at $16.46, and oil futures are $56.52.

S&P 500 resistance levels are 3020, 3050 and 3100; support levels are 2950, 2925 and 2918.

DJIA futures are up 74 points.

ECB READY TO START A NEW ROUND OF QE

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

A New Round Of QE

European Central Bank (ECB) is ready to do ‘all’ to step up the economy.

In our analysis at The Arora Report, the most likely first action is another round of QE.

Durable Goods

Durable Goods Ex-Transports came at 1.2% vs. 0.3% consensus.

Initial Claims

Initial Jobless Claims came at 206K vs. 215K consensus.  This is a leading indicator and carries heavy weight in our models. This continues to show that the economy remains strong.

Momo Crowd And Smart Money In Stocks

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

Gold

Of significant interest is that gold should have rocketed higher on ECB statement but it has not.  Since the momo crowd is buying, this indicates there are institutional sellers in gold.

Oil

There are rumors that Saudi and Kuwait are planning not to renew production cuts when the present agreement expires.  If true, this will be highly bearish for oil and may provide significant opportunities in oil.

The momo crowd is acting like a yo-yo in oil.  Smart money is inactive.

Marijuana

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

Technical Patterns

Metal and mining stocks are tracing an inverse head and shoulders pattern. This is bullish.  ETF of interest is XME.

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 but expect the market to open higher.  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 $1426, silver futures are at $16.57, and oil futures are $56.79.

S&P 500 resistance levels are 3050 and 3100; support levels are 2950, 2925 and 2918.

DJIA futures are  up 22 points.

THE CHART SHOWS DOJ BROADSIDE AGAINST THE BIG TECH MAKES THE STOCK RALLY PRECARIOUS

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

DOJ Investigation

The Department of Justice has launched a broad anti-trust investigation into big technology companies. The chart shows that this investigation has the potential to make the current rally precarious. Let’s examine with the help of an annotated chart.

Please click here for an 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) and Nasdaq 100 ETF (QQQ). Please note the following:

  • As the chart shows, the stock market is consolidating just above the breakout point. This is not a hallmark of a strong rally. A strong rally would typically move farther after a breakout. Please click here for an annotated chart of Dow Jones Industrial Average ETF (DIA). The chart shows measured targets for Dow Jones Industrial Average to be 29,000 and 32,000. For the sake of full transparency, this chart is exactly the same without any changes from the prior publication.
  • The chart shows RSI divergence. This is a negative.
  • The chart shows Arora buy signal given on Christmas Eve which has turned out to be the low and a good buying opportunity.
  • The chart shows the rally is on low volume. This indicates lack of conviction.
  • The rally is mainly driven by expectations of a Fed rate cut and the momo (momentum) crowd. Smart money is not buying this rally so far.
  • Four stocks that seem to be the target of DOJ investigation are Facebook (FB), Amazon (AMZN), Apple (AAPL) and Google (GOOG) (GOOGL).
  • The rally is already precarious. Since the big tech stocks are the market leaders, any negative impact on them has the potential to slow the rally or even kill it.

German PMI

Manufacturing PMI in Germany slipped to 43.1 vs. 45.0 consensus.

Eurozone Manufacturing PMI slipped to 46.4 vs. 47.6 consensus.

A number less than 50 indicates contraction.

Momo Crowd And Smart Money In Stocks

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

Gold

There is no material smart money or momo crowd activity in gold in the early trade.

Oil

API reported the largest crude inventory draw of the year.  The draw was 10.961 million barrels vs. consensus of a draw of 4 million barrels.  This is causing strength in oil.

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

Marijuana

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 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 are ticking down and bonds are ticking up.

The dollar is slightly weaker.

Gold futures are at $1427, silver futures are at $16.60, and oil futures are $56.92.

S&P 500 resistance levels are 3020 and 3050; support levels are 2950, 2925 and 2918.

DJIA futures are down 80 points.

MOMO USES DEBT CEILING DEAL AS AN EXCUSE TO BUY

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

Debt Ceiling

The Congress and the President have reached a debt ceiling deal as expected.  The momo crowd is using this as an excuse to aggressively buy stocks.

U. K.

Boris Johnson is UK’s  new prime minister.  He is a hard liner.  His election increases the probability of a hard Brexit.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd has been acting like a yo-yo.  Smart money is inactive.

Oil

The momo crowd is acting like a yo-yo in oil.  Smart money is inactive.

Marijuana

There is no material smart money or momo crowd activity in the early trade.

After a recent fall, some marijuana stocks are coming into support zones.

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 expect the market to open up strongly higher.  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 slightly stronger.

Gold futures are at $1424, silver futures are at $16.49, and oil futures are $55.97.

S&P 500 resistance levels are 3020 and 3050; support levels are 2950, 2925 and 2918.

DJIA futures are up 102 points.

STOCKS BULLS CONCLUDING THAT CHINA TRUMPS IRAN

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

De-escalation

The U. K. is seeking to de-escalate tensions with Iran after Iran seized a U. K. tanker.  Apparently, so far, President Trump is against going to war with Iran over the U. K. tanker.

Chinese Media

Over the weekend, Chinese media was full of optimism over trade talks.

China Trumps Iran

China bulls are concluding that China trumps Iran as President Trump is not likely to go to war with Iran.  This is taking pressure off stocks and oil.  This is also taking some steam out of gold. On the other hand, bullish traders are concluding that optimism over trade in the Chinese media is a signal that the Chinese government is sending of its desire to resolve 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 buying gold.  Smart money is inactive.

There is aggressive momo crowd buying in silver.  Smart money is inactive in silver.

Oil

The momo crowd was buying oil earlier this morning.  Smart money was inactive.  Within the last few minutes, significant selling is coming into oil. At this time, it is not clear what is behind the selling.  The data is too noisy to determine at this time who is doing the selling.  More than likely it is a large hedge fund that may have some inside information.

Marijuana

There is no material smart money of momo crowd activity in marijuana stocks.

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 in either direction.  Expect the market to open higher.  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.

Dollar is slightly weaker.

Gold futures are at $1426, silver futures are at $16.36, and oil futures are $56.42.

S&P 500 resistance levels are 3020 and 3050; support levels are 2950, 2925 and 2918.

DJIA futures are up 57 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  5% – 15% and short term hedges of 0% – 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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