WEEKLY MARKET DIGEST: QUADRUPLE WITCHING, REBALANCING AND COLD WATER ON MARIJUANA $DIA $GLD $TLRY $ACBFF $KO $QQQ $SLV $SPY $USO

WEEKLY MARKET DIGEST: QUADRUPLE WITCHING, REBALANCING AND COLD WATER ON MARIJUANA $DIA $GLD $TLRY $ACBFF $KO $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.

QUADRUPLE WITCHING, REBALANCING, PMI DAY AND COLD WATER ON CANNABIS

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

Quadruple Witching

Today is quadruple witching.  For practical purposes this will increase volatility as futures and options expire.

Please note that a large part of the rise in the stock market over the last two days is attributable to book squaring ahead of quadruple witching.  Often such moves reverse over the next few days.

Rebalancing

The largest revision since 1999 is effective today in the Global Industry Classification Standard.  This will cause moves in several important stocks.  For example some of the most popular technology stocks are no longer in the technology sector.

Growth Slows In Europe

PMI numbers have been released for various countries in Europe and the Euro area. The data shows that growth unexpectedly slowed in Europe.

Cold Water On Cannabis

Normally we do not mention individual stocks in the Morning Capsule unless it has an impact on the entire market.  The hottest sector in the market has been marijuana stocks.  The hottest marijuana stock has been Tilray (TLRY).  TLRY and marijuana stocks got a boost when TLRY got permission to supply marijuana to a researcher in the United States.  This was a monumental event.  Until now, the researchers in the United States have been restricted to get marijuana only from one farm operated by the University of Mississippi.

Now a politician is questioning TLRY supplying marijuana and a movement is on the way to reverse the decision.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying stocks in the early trade.  The smart money is selling into the strength. Unlike past days, selling by smart money is not light.

Gold

There is aggressive selling by the momo crowd in gold.  Gold is also being sold on the dollar becoming stronger.

Oil

The momo crowd is aggressively buying oil.  A short squeeze is also taking place.

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 expect the market to open higher.

Interest rates are ticking up and bonds are ticking down.

Gold futures are at $1198, silver futures are at $14.26, and oil futures are $70.98.

S&P 500 resistance level is 2950; support levels are 2925, 2918 and 2860.

DJIA futures are up 78 points.

OPTIMISM CONTINUES BUT BUYBACK BLACKOUT MAY CAUSE VOLATILITY

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

Optimism But Buyback Blackout

Optimism about stocks continues.  Sentiment is now very positive.  The next step in sentiment is extremely positive.  When sentiment becomes extremely positive, it is a contrary indicator. In plain English, stocks often fall when sentiment becomes extremely positive.

A big reason behind the stock market rise is that corporations continue to aggressively buyback their own stocks.  Corporations stop buying their own stock one month before the earnings release.  Earnings season starts on October 5th.  This means that many corporations are now getting into the blackout period.  Support from buybacks for the stock market will temporarily disappear.

For practical purposes, there may be dips over the next 30 days that may provide buying opportunities. Consider being patient.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying in the early trade.  The smart money is lightly selling into the strength.

Gold

Gold is moving higher on the weak dollar.  The smart money is inactive.

Oil

Russian oil production is hitting post-Soviet era high. This is a negative.  On the positive side, EIA inventory data was bullish.

Oil is seeing aggressive momo crowd buying. The smart money is inactive.

Technical Patterns

Regional bank stocks are tracing an Engulfing Line.  This is bullish.  ETF of interest is KRE.

Lithium stocks are tracing a Megaphone Bottom. This is bullish.  ETF of interest is LIT.

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 stock market to open higher.

The dollar is weaker.

Interest rates are ticking up and bonds are ticking down.

Gold futures are at $1211, silver futures are at $14.53, and oil futures are $67.94.

S&P 500 resistance levels are 2925 and 2950; support levels are 2918, 2860 and 2840.

DJIA futures are up 132 points.

MORE OPTIMISM ON CHINA SAYING IT WILL NOT DEVALUE ITS CURRENCY

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

China Creates Optimism

China is saying that it does not intend to devalue its currency to make its exports cheaper to counter U. S. tariffs.  This is creating optimism in stocks in Asia.  Stock markets in Asia are generally higher.  The optimism is being carried to the U. S. stock market.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying this morning.  The smart money is lightly selling stocks.

Housing Starts

Housing Starts came at 1282K vs. 1229K consensus.  Building Permits came at 1229K vs. 1310K consensus.  Overall this says the housing market in the U. S. is strong.

Gold

Gold is seeing buying on a weaker dollar.  The smart money is inactive. The momo crowd is lightly buying.

Oil

API inventory data  showed a build of 1.25 million barrels vs. a consensus of a draw of 2.74 million barrels.  Oil market is dismissing this as an anomaly related to storm Gordon.

Technical Patterns

Metal and mining stocks are tracing a Double Bottom. 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 can easily swing positive.

Interest rates are ticking up and bonds are ticking down.

Dollar is slightly weaker.

Gold futures are at $1209, silver futures are at $14.26, and oil futures are $69.63.

S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.

DJIA futures are up 10 points.

STOCKS RISE ON ESCALATION OF TRADE WAR, 3% YIELD

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

Stocks Rise On Escalation Of Trade War

Trump has escalated the trade war by imposing 10% tariffs on additional $200 billion of Chinese goods.  On the surface it may seem that the stock market should go down.  However the stock market does not work that way.

The stock market is going up because the amount of tariffs is less than the whisper number.  The stock market moves based on the difference between reality and the whisper numbers.

China Response

China is responding with tariffs on $60 billion of U. S. goods.

Asian Stocks Move Up

Asian stocks, including Chinese stocks, are moving up on the escalation of the trade war.

Momo Crowd And Smart Money In Stocks

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

The smart money is lightly selling.

3% Yield

10 year Treasury yields are hovering around 3%.  3% is a key level.  Even those investors who do not invest in bonds need to pay attention to this level because bonds compete with stocks.  The higher the yields the stronger the competition.

Gold

Trading in gold is listless.  Those who were hoping that gold would move higher on the escalation of the trade war are disappointed and selling.

Oil

Saudi Arabia is stating that it is comfortable with oil going over $80.  This is helping bulls on oil. On the other hand the trade war is negative for oil.

Technical Patterns

Russian stocks are tracing a Mega Phone bottom.  This is bullish.  ETF of interest is RSX.

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 swing either way.

Currencies are mixed.

Gold futures are at $1207, silver futures are at $14.23, and oil futures are $69.64.

S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.

DJIA futures are up 20 points.

HARD LINE FROM CHINA ON TRADE, WORLD’S LARGEST BEVERAGE COMPANY LOOKING AT CANNABIS

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

Hard Line From China

There is a report that China may retaliate if Trump goes ahead with tariffs on additional $200 billion worth of Chinese goods.

There is now doubt about trade talks scheduled for later this month.

Stocks In Asia

Export oriented stocks in Asia with a China connection have been hit hard.

Coca Cola Looking At Cannabis

Coca Cola (KO) is the largest beverage company in the world.  There is a report that KO is looking at drinks infused with CBD.  CBD is the non-psychoactive component in marijuana that does not give a high.  There is a report that KO is working with Aurora Cannabis (ACBFF).

Momo Crowd And Smart Money In Stocks

The momo crowd is ignoring the trade issue with China and buying aggressively this morning.  The smart money is lightly selling stocks.

Gold

Gold is seeing buying on a weaker dollar.  The smart money is inactive.

Oil

Oil is moving higher on concerns over U. S. sanctions on Iran.

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 easily reverse.

Interest rates are ticking up and bonds are ticking down.

Gold futures are at $1203, silver futures are at $14.20, and oil futures are $69.49.

S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.

DJIA futures are down 24 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 21% – 31% and short to medium-term hedges of  10% – 15% and very short term hedges of 10% – 15%.

 

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.

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