WEEKLY MARKET DIGEST: OVERBOUGHT MARKET PULLS BACK, GROWTH SLOWS, CBD CRACKDOWN $DIA $GLD $QQQ $SLV $SPY $TBT $USO

WEEKLY MARKET DIGEST: OVERBOUGHT MARKET PULLS BACK, GROWTH SLOWS, CBD CRACKDOWN $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.

THE OVERBOUGHT MARKET FINDS THE EXCUSE TO PULLBACK

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

The Excuse

Yesterday in the Morning Capsule we wrote:

Overbought Market

The stock market is overbought in the short term. Overbought markets are vulnerable to pullbacks.

The market found the excuse on the news that Trump and Xi may not meet before March 1st; Trump and Xi may meet shortly afterwards.

The market pulled back on the news.

If the market was oversold, the market would have likely gone up on this news.

Momo Crowd And Smart Money In Stocks

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

Gold

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

Oil

Oil got hit on world growth concerns.  The momo crowd is selling oil.  Smart money is inactive.

Marijuana

The momo crowd is aggressively buying cannabis stocks. Smart money is inactive.

Technical Patterns

REITs are tracing an inside bar. This is bearish.  ETF of interest is IYR.

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 reverse.

Interest rates are ticking down and  bonds are ticking up.

Currencies are mixed.

Gold futures are at $1317, silver futures are at $15.62, and oil futures are $52.92.

S&P 500 resistance levels are 2700, 2740 and 2765; support levels are 2688, 2661 and 2658.

DJIA futures are down 122 points.

OVERBOUGHT MARKET, GROWTH IN EUROPE SLOWS, CRACKDOWN ON CBD

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

Overbought Market

The stock market is overbought in the short term. Overbought markets are vulnerable to pullbacks.

Slower Growth In Europe

The European Commission sharply cut growth forecast for the eurozone from 1.9% to  1.3%.

Jobless Claims

Initial Jobless Claims came at 234K vs. 220K consensus.  This is a leading indicator and carries heavy weight in our models.

Australia

The Australian dollar has fallen sharply after the head of the Reserve Bank indicated a potential interest rate cut due to economic risks. This is a stunning reversal.

Momo Crowd And Smart Money In Stocks

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

Gold

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

Oil

EIA data was bullish for oil. Trading activity is listless.

Marijuana

New York is cracking down on the use of CBD in edibles and beverages.  This news is taking some air out of marijuana stocks. As we wrote yesterday, short squeeze shows signs of ending.

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

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.

Interest rates are ticking down and bonds are ticking up.

Currencies are mixed.

Gold futures are at $1312, silver futures are at $15.67, and oil futures are $53.33.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2700, 2688 and 2661.

DJIA futures are down 128 points.

TRUMP’S SPEECH, GERMANY DRIFTING TOWARDS RECESSION, MARIJUANA SHORT SQUEEZE EASING

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

Trump’s Speech

Trump gave a good speech. However, nothing has changed and there is nothing new that will impact investors.

Germany Drifting Towards Recession

Germany is one of the 23 countries that we monitor at The Arora Report. Germany is the largest economy in Europe and therefore important.  Leading indicators in Germany have been deteriorating.  Now the largest German bank is warning that Germany is drifting towards recession.

Momo Crowd And Smart Money In Stocks

The momo crowd is buying stocks in the early trade.  The smart money is lightly selling.

Gold

Trading in gold is listless.

Oil

API inventory came at a build of 2.5 million barrels vs. consensus of 2.2 million barrels.  This is bearish. The data for gasoline and distillates was also bearish.

The EIA data that is considered more authoritative will be released at 10:30 am ET.

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

Marijuana

According to algorithms at The Arora Report, this leg of short squeeze is showing signs of ending.  Will another short squeeze leg start? There is no way to know.  If another leg of short squeeze does not start soon, expect marijuana stocks to fall.   The momo crowd is buying marijuana stocks in the early trade.  The smart money is selling marijuana stocks.

Technical Patterns

Mainland Chinese shares are tracing a megaphone bottom.  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 neutral but the probability of the indicator shifting to negative is high.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1318, silver futures are at $15.78, and oil futures are $53.51.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2700, 2688 and 2661.

DJIA futures are up 21 points.

POSITIVE SENTIMENT AFTER STOCKS IN EUROPE JUMP, STATE OF THE UNION, POSITIVE MARIJUANA PRONOUNCEMENTS

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

Europe

Eurozone January Services PMI (Purchasing Manager’s Index) came at 51.2 vs. 50.8 consensus.  This is a leading indicator.

Eurozone December Retail Sales came at -1.6% vs. consensus of -1.5%.  This is a lagging indicator.

Investors ought to pay attention to the leading indicators. Eurozone stocks are jumping, in part, due to a good earnings report from oil giant BP.

State Of The Union

Trump will deliver his State of the Union address tonight.  Investors need to pay special attention to what he says about taxes and drug prices.

Momo Crowd And Smart Money In Stocks

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

Gold

Trading in gold is listless.

Oil

Trading in oil is listless as traders await API data to be released at 4:30 pm.

Marijuana

Analysts are rushing to make positive marijuana related pronouncements to justify the recent rally.  These are analysts who apparently are not deeply steeped into the mechanics of the markets and do not understand that the real reason behind the rally is short squeeze.

The momo crowd is aggressively buying marijuana stocks.  Smart money is selectively selling into the strength.

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 higher.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1319, silver futures are at $15.89, and oil futures are $53.83.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2700, 2688 and 2661.

DJIA futures are up 93 points.

STOCKS AND BONDS FOCUS ON TWO DIFFERENT THINGS, WHO IS RIGHT?

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

Who Is Right?

Stocks and bonds are focusing on two different things.

Action in bonds shows that economic weakness is ahead.

Action in stocks shows that because of dovish Fed everything will be find.

Who is right? The answer is not clear at this time. For this reason, it is important to pay attention to leading economic indicators.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is selling gold after the recent run up.  Smart money is inactive.

Oil

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

Marijuana

Short squeeze continues in the early trade.  The momo crowd is aggressively buying marijuana stocks in the early trade.  Smart money is selectively selling.

Technical Patterns

Semiconductor stocks are tracing a head and shoulders bottom. This is bullish. ETF of interest is SMH.

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.

Interest rates are ticking up and bonds are ticking down.

The dollar is stronger.

Gold futures are at $1316, silver futures are at $16.74, and oil futures are $54.76.

S&P 500 resistance levels are 2740, 2765 and 2800; support levels are 2688, 2661 and 2658.

DJIA futures are down 10 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%.

 

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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