WEEKLY MARKET DIGEST: QUAD WITCH & RUSSELL SUPPORTS STOCKS, REASON BEHIND GOLD RALLY, OIL RIG DATA $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

WEEKLY MARKET DIGEST: QUAD WITCH AND RUSSELL SUPPORTS STOCKS, THE REASON BEHIND GOLD RALLY AND OIL RIG DATA $DIA $GLD $QQQ $SLV $SPY $TBF $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.

QUAD WITCH AND RUSSELL REBALANCING SUPPORTIVE OF STOCKS, THE REASON BEHIND GOLD RALLY AND OIL RIG DATA

This is what you need to know today.

Quad Witch And Russell Rebalance Supportive Of Stocks

Quad witch and Russell rebalancing have been supportive of stocks all week.  These two events are ending today.  The Arora Report provided you this information in advance and is one of the rare services whose call has proven spot on.  On June 19th Morning Capsule we wrote:

Quadruple Witching

Quadruple witching is this coming Friday when index futures, index options, single stock options, and single stock futures expire.  Lately this expiry exerts upward pressure on the stock market.

We will have to see what it does this time.  Preliminary indications are that the pressure is to the upside.

Russell Rebalance

Upcoming Russell rebalance is likely to exert upward pressure on technology stocks.

The Real Reason Behind The Gold Rally

The fall in oil has created uncertainty.  This is causing investors to rush into gold.  To add fuel to the fire, gold permabull gurus latched on to a Fibonacci retracement level to issue buy signals.   On June 20th we wrote:

Perma gold bull gurus are out in force touting 61.8% retracement of the recent rally as the point to buy gold.  This retracement level is right at $1246.

On June 22nd in the Morning Capsule we wrote:

The ‘smart money’ is buying to cover shorts in gold.  Please also see Technical Pattern section.

Gold has traced an Engulfing Line. This is bullish.  ETF of interest is .

Several gold mining stocks are also tracing Engulfing Line.  ETFs of interest are , , and .

At the time of this writing, a short squeeze in gold is leading the price to reach about $1260.

There is too much risk to take a very short-term  trade in gold at this time in bullish or bearish direction.

Oil

BHI rig data will be released at 1:00 pm ET.  This data has the potential to move the oil market.

Technical Patterns

20+ year Treasury bonds are tracing a Hanging Man.  This is bearish.  ETF of interest is .

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.

10-year bond yield has hit 2.16%.   This is the lowest level in a while.  10-year bond yield is important because this is a major heavily used benchmark.

Gold futures are at $1260, silver futures are at $16.74, and oil futures are $42.81.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are down 16 points.

 

SENATE GOP HEALTH BILL, OIL DOWN ON LIBYA, GOLD AND YEN UP ON OIL, MOMO BUYS STOCKS

This is what you need to know today.

Senate GOP Health Bill

GOP Senate leadership plans to release its healthcare plan today.  The leadership has been working on its plan in secret.

There are likely to be several implications for investors.  We will publish new posts as appropriate.

Oil Down On Libya

EIA inventory data yesterday was supportive of oil going higher.  But then came the following two pieces of news.

  • More production from Libya is coming on line.
  • OPEC ministers are not supportive of deeper production cuts.

Oil fell through several support levels on the news.

Gold And Yen Up On Oil

Precipitous fall in oil is creating uncertainty everywhere other than in the stock market momo crowd.

Gold and yen are moving higher as prudent investors rush into the safe haven of these two assets.

The ‘smart money’ is buying to cover shorts in gold.  Please also see Technical Pattern section.

Momo Buys Stocks

The momo crowd continues to aggressively buy stocks.  There is no significant buying by the smart money.

Jobless Claims

Weekly Jobless Claims came at 241K vs. 241K consensus. This is a leading indicator and carries heavy weight in our timing models.

Technical Patterns

Gold has traced an Engulfing Line. This is bullish.  ETF of interest is .

Several gold mining stocks are also tracing Engulfing Line.  ETFs of interest are , , and .

Several biotech stocks are breaking out.  The main ETF of interest is . Other ETFs of interest are , , and .

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 and bonds are range bound.

Gold futures are at $1254, silver futures are at $16.57, and oil futures are $42.79.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are down 12  points.

STOCKS REVERSING EARLIER LOSSES AS OIL STABILIZES, GOLD RALLY FIZZLES, SAUDI SHAKE UP, AND MSCI ADDS CHINA

This is what you need to know today.

Stocks Reversing Earlier Losses As Oil Stabilizes

Oil slide reversed on better than expected API data.  Earlier U. S. stocks followed Asian stocks lower.  Asian stocks went lower because of oil slide and strength in yen.

EIA data on oil to be released at 10:30 am will be key for both oil and stocks.

Gold Rally Fizzles

Gold rallied in Asia along with strength in yen.  After the initial rally, the yen rally fizzled as oil strengthened.  Gold has given up its earlier gains from Asia as it is following yen.

Saudi Shake Up

Deputy Crown Prince has been named the Crown Prince.

MSCI has indicated that it will consider elevating Saudi to the emerging market status.  These developments are boosting Saudi stocks.

MSCI Adds China

MSCI has added China Mainland to its indexes.  This will provide major opportunities for investors.  We will discuss this in more detail in ZYX Emerging Markets ETF Alert later.

Technical Patterns

Several REITs are tracing an Engulfing Line.  This is bearish.  ETF of interest is .

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.

Bonds and interest rates are range bound.

Gold futures are at $1243, silver futures are at $16.35, and oil futures are $43.63.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are up 6 points.

HAWKISH FED, OIL PRICES SINK, GOLD UNDER $1250 BUT BUYING IN MINERS, STOCKS SUPPORTED ON HEALTHCARE VOTE

This is what you need to know today.

Hawkish Fed

Commentary coming from Fed officials is very hawkish.  They want to raise rates irrespective of the economic data.

Oil Sinks

The big news of the day is that oil is sinking on over supply concerns.  Now oil is at the lowest level since November.  API inventory data to be released at 4:30 pm ET will be the next big market moving event.

Gold Under $1250 But Buying In Miners

Gold has slipped below $1250 support.

Perma gold bull gurus are out in force touting 61.8% retracement of the recent rally as the point to buy gold.  This retracement level is right at $1246.

The momo crowd is aggressively buying gold miners.  The are believing that gold will rally from here and they will get more leverage by buying miners.

There is no buying by the ‘smart money.’

Stocks Supported On Healthcare Vote

U. S. Senate is setting up an ambitious schedule to vote on the healthcare bill.  This is supporting stocks. Other supportive factors for stocks include Russell rebalancing and quad witching.  Please be aware that yesterday’s buying may have already exhausted these supportive factors.

Technical Patterns

Consumer staple stocks are tracing a Hammer.  This is bullish. ETF of interest is .

This is powerful information and many investors use this to enter trades in addition to our official signals.  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, bonds and currencies are range bound.

Gold futures are at $1246, silver futures are at $16.44, and oil futures are $43.31.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are up  6 points.

QUAD WITCH AHEAD, TECH UP ON RUSSELL REBALANCE, GOLD $1250 SUPPORT, MACRON WINS AGAIN

This is what you need to know today.

Quadruple Witching

Quadruple witching is this coming Friday when index futures, index options, single stock options, and single stock futures expire.  Lately this expiry exerts upward pressure on the stock market.

We will have to see what it does this time.  Preliminary indications are that the pressure is to the upside.

Russell Rebalance

Upcoming Russell rebalance is likely to exert upward pressure on technology stocks.

Gold $1250 Support

As of this writing gold is holding on to $1250 support.  Trading is listless with a drift down for lack of buyers.  The ‘smart money’ is inactive.

Oil

There has been a fair amount of buying in oil from overseas.  As of this writing, oil has moved above $45.

Natural Gas

Natural gas is being slaughtered on weather forecast.

Macron Wins Again

In France, Macron’s party won a solid majority in the Parliamentary election.  Turnout was exceptionally low.  The smart money is rushing into Europe.

China

There has been strong buying in Mainland China stocks on speculation that these stocks will be included in MSCI index.  If this happens a lot of money is going to flow into these stocks.

Technical Patterns

Several oil stocks are tracing an Inside Bar.  This is bullish.  ETFs of interest are and .

Several technology stocks are tracing a Hammer.  This is bullish.  ETFs of interest are , and .

This is powerful information and many investors use this to enter trades in addition to our official signals.  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.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1251, silver futures are at $16.59, and oil futures are $45.05.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are up 75 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 27 – 38% of assets in cash or treasury bills, and short to medium-term hedges of  25% and very short term hedges of 5%.

 

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