WEEKLY MARKET DIGEST:DATA SHOWS INFLATION IS ALIVE, NO NEED FOR NEGATIVE INTEREST RATES, POOR PROJECTIONS FROM GOLD MAJORS $DIA $GLD $QQQ $SLV $SPY $USO

 

WEEKLY MARKET DIGEST: NEW DATA SHOWS INFLATION IS ALIVE, NO NEED FOR NEGATIVE INTEREST RATES,  POOR PROJECTIONS FROM GOLD MAJORS $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. ) 

NEW DATA SHOWS INFLATION IS ALIVE, NO NEED FOR NEGATIVE INTEREST RATES

This is what you need to know today.

The talk of negative interest rates has been prompted by fears of deflation.

Recently we shared with you that Core PPI came much hotter than the consensus.  Today, Core Consumer Price Index (CPI) came at +0.3% vs. 0.1% consensus.

The foregoing tells us that inflation is well and alive in the United States and there is no need to pay attention to speculation of negative interest rates in the United States  at this time.

Since 2008, the gold trade is dominated by the momo crowd.  The momo crowd has consistently exhibited a strange pattern of selling gold on higher inflation data.  Traditionally, gold is a hedge against inflation.  Today is no different, on the news of hotter CPI, momo crowd aggressively sold gold.

Oil has pulled back and is now trading under $30.  Please note that starting Monday we will shift to April contract. April contract is trading about $2.25 higher than the oil numbers we have been giving you.

At 1:00 pm BHI rig count will be released.  It often moves oil. Further oil has a tendency to go up on Fridays as shorts do not want to carry heavy positions into the weekend.

Stocks are pulling back.  After the strong four day rally, this pull back is natural and does not foreshadow anything about the future.

Interest rates are slightly higher.

Currencies are range bound.

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

Gold futures are at $1226, silver futures are at $15.39, and oil futures are $29.95.

S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1900, 1860, and 1838.

DJIA futures are down 92 points.

What To Do Now?

It is important for investors to look ahead and not in the rear view mirror.

Consider continuing to hold existing positions.  Based on individual risk preference, consider holding cash 28 – 44%, and short to medium-term hedges of  30%.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.

A Reminder

As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load.  For long only investors, this remarkable performance was achieved by using inverse ETFs.

Our models do not expect a repeat of 2008.  In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.

Individual Trades

Please click on Home on the left side of the Menu.  Scroll down on the Home Page for individual trades.

Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.

OIL ROCKETS ON API, POOR PROJECTIONS FROM GOLD MAJORS AND WMT SPOILS THE PARTY

This is what you need to know today.

Oil is rocketing on a surprise API inventory of -3.3 million vs. consensus of +3.0 million.

The oil gains may reverse or accelerate at 11:00 am ET when DOE reports inventory data.  DOE data is considered more authoritative than API data.

Given recent interest in gold stocks, it is worth noting that two gold majors, NEM and ABX,  are providing awful earnings projections.

Poor earnings projections from WMT are spoiling the budding stock rally.

Interest rates, gold, silver and copper are range bound.

Dollar is strengthening.

FOMC minutes show a lot of uncertainty and a divided Fed.

Our very, very short-term early stock market indicator is positive but can quickly reverse.

Gold futures are at $1206, silver futures are at $15.27, and oil futures are $31.68.

S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1909, 1900, and 1860.

DJIA futures are up 52 points.

What To Do Now?

It is important for investors to look ahead and not in the rear view mirror.

Consider continuing to hold existing positions.  Based on individual risk preference, consider holding cash 28 – 44%, and short to medium-term hedges of  30%; these are 2% reductions all around.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. 

A Reminder

As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load.  For long only investors, this remarkable performance was achieved by using inverse ETFs.

Our models do not expect a repeat of 2008.  In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.

Individual Trades

Please click on Home on the left side of the Menu.  Scroll down on the Home Page for individual trades.

Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.

SKEPTICISM OVER THE OIL DEAL, STRONG PPI, FOMC MINUTES AHEAD

This is what you need to know today.

In trading circles, there is strong skepticism over the enforcement of the oil deal.  This is the reason behind the weak rally in oil.

Core Producer Price Index (PPI ) came at 0.4% vs. 0.0% consensus.  This strong reading should help with fears of deflation.

Housing Starts came at 1099K vs. 1171K consensus.  This weakness appears to be weather related.

Building Permits came at 1202K vs. 1200K consensus; building permits are a leading indicator.

FOMC will release its minutes of the last meeting this afternoon. This is potentially a market moving event.

We have received questions from subscribers regarding the contradiction in China currency policy.  The prevailing wisdom had been that China wanted to devalue its currency to increase exports.  However, lately capital outflows out of China have become so severe that the government has no choice but to give the highest priority to stem capital outflows. The best way to accomplish this is to temporarily strengthen yuan.  If the yuan is strengthening, there is less incentive for Chinese to take money abroad.

Interest rates are rising slightly.

Gold and silver are range bound.

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

Gold futures are at $1208, silver futures are at $15.35, and oil futures are $30.22.

S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1860, 1838, and 1800.

DJIA futures are up 152 points.

What To Do Now?

It is important for investors to look ahead and not in the rear view mirror.

Consider continuing to hold existing positions.  Based on individual risk preference, consider holding cash 28 – 44%, and short to medium-term hedges of  30%; these are 2% reductions all around.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. 

A Reminder

As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load.  For long only investors, this remarkable performance was achieved by using inverse ETFs.

Our models do not expect a repeat of 2008.  In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.

Individual Trades

Please click on Home on the left side of the Menu.  Scroll down on the Home Page for individual trades.

Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.

SAUDI AND RUSSIA FREEZE OIL PRODUCTION, YUAN DRAMATICALLY STRENGTHENS AND FEAR OF NEGATIVE INTEREST RATES RECEDES; REDUCE CASH AND HEDGES

This is what you need to know today.

Saudi and Russia have agreed to freeze oil production provided accommodation is reached  with other oil producers.  Oil has lost much of its early gains as during the weekend there was extensive buying on hopes of a production cut.

China is spending a lot of its cash to prop up yuan.  Yuan has dramatically strengthened.

Fears of negative interest rates are receding, gold is being crushed.

Interest rates are beginning to rise.

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

Gold futures are at $1213, silver futures are at $15.43, and oil futures are $29.61.

S&P 500 resistance levels are 1900, 1909, and 1920; support levels are 1860, 1838, and 1800.

DJIA futures are up 184 points.

What To Do Now?

It is important for investors to look ahead and not in the rear view mirror.

Consider continuing to hold existing positions.  Based on individual risk preference, consider holding cash 28 – 44%, and short to medium-term hedges of  30%; these are 2% reductions all around.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.

A Reminder

As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load.  For long only investors, this remarkable performance was achieved by using inverse ETFs.

Our models do not expect a repeat of 2008.  In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.

Individual Trades

Please click on Home on the left side of the Menu.  Scroll down on the Home Page for individual trades.

Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.

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