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.
UNEXPECTEDLY STRONG JOBS REPORT IN THE U. S. AND MANUFACTURING DATA IN CHINA
To gain an edge, this is what you need to know today.
Strong Jobs Report
October Non-farm Private Payrolls came at 131K vs. 90K consensus. Prior numbers were also revised upwards by significant amounts.
This is an exceptionally strong jobs report.
ISM Manufacturing Index
Yesterday, Chicago PMI that was released after the Morning Capsule was weak. Therefore there is significant importance to ISM Manufacturing index that will be released at 10:00 am ET. The consensus is 48.3. This may be a market moving event.
Chinese Manufacturing
Caixin index rose to 51.7. This is an unexpectedly strong number.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks in the early trade. Smart money is inactive.
Gold
Gold was hit with selling on jobs report. However, the momo crowd after first selling, started buying when the momentum reversed. The momentum reversed as short sellers bought to cover on the dip.
Smart money is inactive.
For longer term, please see gold and silver ratings.
Oil
The momo crowd is behaving like a yo-yo in oil. Smart money is inactive.
For longer term, please see oil ratings.
Marijuana
The momo crowd is selling cannabis stocks in the early trade. 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 positive. 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 stronger.
Gold futures are at $1509, silver futures are at $18.00, and oil futures are $54.76.
S&P 500 resistance levels are 3050, 3100 and 3125; support levels are 3020, 2950 and 2925.
DJIA futures are up 109 points.
SURPRISE LEAK FROM CHINA STOPS THE RALLY
To gain an edge, this is what you need to know today.
Surprise Leak
A surprise leak from China is stopping the rally. There is a report that Chinese officials are saying in private that they will not budge on issues like intellectual property and state sponsorships. Chinese see the prospects of striking a trade deal with Trump beyond phase one as low.
Such leaks are typically done on purpose by the Chinese government.
Jobless Claims
Initial Jobless Claims came at 218K vs. 216K consensus.
Personal Income And Spending
Personal Income came at 0.3% vs. 0.3% consensus.
Personal Spending came at 0.2% vs. 0.3% consensus.
Momo Crowd And Smart Money In Stocks
The momo crowd is selling in the early trade. Smart money is inactive.
Gold
Yesterday a short squeeze had started after gold first fell on the Fed decision. Such short squeezes are common after a Fed decision. This morning, the short squeeze has taken another leg up on the China leak.
The momo crowd is buying gold. Smart money is inactive.
For longer term, please see gold and silver ratings.
Oil
The momo crowd is selling oil in the early trade. Smart money is inactive.
The China leak is negative for oil.
For longer term, please see oil ratings.
Marijuana
The momo crowd is selling marijuana in the early trade. 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 but can swing positive on more rumors or news. 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 weaker.
Gold futures are at $1510, silver futures are at $18.07, and oil futures are $54.36.
S&P 500 resistance levels are 3050, 3100 and 3125; support levels are 3020, 2950 and 2925.
DJIA futures are up/down 54 points.
HAWKISH RATE CUT EXPECTATIONS, STRONG GDP
To gain an edge, this is what you need to know today.
Hawkish Rate Cut
Expectations from the Fed have changed over the last two days. Now the market consensus is a hawkish rate cut. It means that the Fed will cut the rate by one-quarter percent but make future interest rate cuts data dependent and the Fed may abandon its insurance policy stance.
There is a 90% probability that the consensus is right. However if the 10% happens, the market may tank.
GDP
Q3 GDP-First Estimate came at 1.9% vs. 1.5% consensus. Digging below the surface the data shows that the consumer is strong and holding up the economy. Business spending is slowing.
ADP
ADP is the largest private payroll processor in the country. ADP employment change came at 125K vs. 95K consensus. This data is significantly stronger than expectations.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying stocks in the early trade. Smart money is inactive.
Gold
There is not discernable momo crowd or smart money activity in gold. Historically the momo crowd runs up gold leading to a Fed announcement.
For longer term, please see gold and silver ratings.
Oil
API data shows crude oil build of 592k barrel vs. consensus of 729K barrel build. This data is positive for oil.
EIA data will be released at 10:30 am and may be a market mover.
For longer term, please see oil ratings.
Marijuana
The momo crowd is selling marijuana stocks. Smart money is inactive.
Technical Patterns
Small-cap value stocks are breaking out. This is bullish. ETF of interest is IWD.
Retail stocks are tracing an island top. This is bearish. ETF of interest is XRT.
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 move either way. 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.
Currencies are range bound.
Gold futures are at $1494, silver futures are at $17.82, and oil futures are $55.30.
S&P 500 resistance levels are 3050, 3100 and 3125; support levels are 3020, 2950 and 2925.
DJIA futures are up 7 points.
MINOR PULLBACK ON SECOND THOUGHTS
To gain an edge, this is what you need to know today.
Minor Pullback
Make no mistake, this rally is not based on fundamentals but on momentum. Smart money lightly sold yesterday near the highs. As the momentum reversed, the momo crowd also started lightly selling.
Strong seasonality is ahead for the stock market. Also both Chinese and the U. S. governments keep on creating optimism for the trade deal.
The Fed meeting starts today.
Momo Crowd And Smart Money In Stocks
The momo crowd is acting like a yo-yo in the early trade. Smart money is inactive in the early trade.
Gold
The momo crowd is selling gold. Smart money is inactive.
For longer term, please see gold and silver ratings.
Oil
The momo crowd is acting like a yo-yo in oil. Smart money is inactive.
For longer term, please see oil ratings.
Marijuana
There is no discernable momo crowd or smart money activity in marijuana.
Technical Patterns
Marijuana stocks are tracing an engulfing line. This is bearish. ETF of interest is MJ.
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 can quickly swing positive. 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.
Currencies are range bound.
Gold futures are at $1491, silver futures are at $17.70, and oil futures are $54.90.
S&P 500 resistance levels are 3050, 3100 and 3125; support levels are 3020, 2950 and 2925.
DJIA futures are down 58 points.
NEW HIGHS, BUSIEST EARNINGS WEEK, FED MEETING
To gain an edge, this is what you need to know today.
New Highs
The stock market is likely to open at new highs. The prime driving force is the momentum and not the fundamentals.
Busiest Earnings Week
This is the busiest earnings week. The most important earnings report is from Apple (AAPL).
Whisper numbers for most earnings have jumped up over the last week even though consensus numbers have not been raised. This development increases the risk in the stock market.
Fed Meeting
The Fed is meeting this week. The market is assigning a 91% probability to a rate cut.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks in the early trade. Smart money is inactive.
Gold
There is no discernable smart money or momo crowd activity in gold.
For longer term, please see gold and silver ratings.
Oil
The momo crowd is aggressively buying oil. Smart money is inactive.
Natural gas is undergoing a short squeeze.
For longer term, please see oil ratings.
Marijuana
The momo crowd is buying marijuana stocks in the early trade. Smart money is inactive
Technical Patterns
Technology stocks are tracing a flag. This is bullish. ETF of interest is XLK.
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 significantly 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 $1501, silver futures are at $17.97, and oil futures are $56.61.
S&P 500 resistance levels are 3050, 3100 and 3125; support levels are 3020, 2950 and 2925.
DJIA futures are up 146 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 22% – 32% and short to medium-term hedges of 5% – 15% and short term hedges of 5% – 15%.
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