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

Optimism Over Trade Deal

There is significant optimism across the globe over a potential trade deal.  Now there is a draft agreement that both sides are going through line-by-line.

Consumer Spending Weakens

Consumers are about 70% of the U. S. economy. This is why investors need to pay attention to consumer behavior.

January Personal Spending came at 0.1% vs. 0.3% consensus.

February Personal Income came at 0.2% vs. 0.3% consensus.

Inflation Weakens

Core PCE Price Index came at 0.1% vs. 0.2% consensus.

Momo Crowd And Smart Money In Stocks

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

Gold

Significant smart money buying is coming into gold after the release of personal spending, personal income and PCE data  (please see above). In our analysis this is likely a short term trade because in general, lately, smart money has not been buying gold.  The momo crowd is inactive.

Oil Snubs Trump

Yesterday oil first fell on Trump tweet to jawbone oil price lower. The oil first went lower however oil came right back.  Those who sold short on Trump tweet had to cover leading to a short squeeze.  As of this writing oil has broken above $60 key level.

The momo crowd is aggressively buying oil. Smart money bought oil on the dip but is inactive as of this writing.

Marijuana

The House Financial Services Committee voted overwhelmingly to advance the bill that allows financial institutions to service legal marijuana business.  This was expected and was already discounted in marijuana stock prices.

The full House is expected to vote within weeks but there is no certainty that the bill will pass.

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.

Interest rates are ticking up and bonds are ticking down.

Currencies are range bound.

Gold futures are at $1303, silver futures are at $15.14, and oil futures are $60.60.

S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.

DJIA futures are up 147 points.

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

Fed Speak

The main determinant of the stock market right now is Fed policy. Many Fed officials are speaking and the market will be watching for clues.  Those speaking include  Fed Vice Chairman for Supervision Randal Quarles, Fed Vice Chairman Richard Clarida, Fed Governor Michelle Bowman, Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard.

Trade Talks

There are reports that China has offered unprecedented concessions in trade talks.  If the market decides to take a clue from trade talks today, this is a big positive.  However the market seems to be more focused on the Fed.

GDP Revision

Q4 GDP-Third Estimate came at 2.2% vs. 2.5% consensus.  The number is weaker than expected but it is a lagging indicator.

Jobless Claims

Initial Jobless Claims came at 211K vs. 220K consensus.  This is a leading indicator and carries a heavy weight in our models.

Momo Crowd And Smart Money In Stocks

The momo crowd is lightly buying stocks.  Smart money is inactive.

Gold

The rise in the dollar is causing selling in gold.  Palladium has been crushed.

The momo crowd is aggressively selling gold.  As of this writing gold has broken below the support level of $1300.

Oil

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

Marijuana

The momo crowd is selling marijuana stocks into the weakness.  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 neutral but expect the market to open higher.

Interest rates are ticking up and bonds are ticking down.

The dollar is stronger.

Gold futures are at $1298, silver futures are at $15.12, and oil futures are $58.57.

S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.

DJIA futures are up 20 points.

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

Trade Deficit

The trade deficit fell 14.6% to $51.1 billion vs. consensus of $57.5 billion.  This is the largest decline since 2018. The primary reason is China buying more soybeans.

All Eyes On Central Banks

Investors are hoping for more indications from central banks of more actions to spur economic growth in the face of slowing global growth.

Window Dressing

Window dressing is happening. In window dressing, money managers buy strong performing stocks before the quarter end.

Momo Crowd And Smart Money In Stocks

Both momo crowd and smart money are inactive.

Gold

Trading in gold is listless.  Both momo crowd and smart money  are inactive.

Oil

API data showed a build of 1.9 million barrels vs.  consensus of a draw of 1.1 million barrels.

EIA data will be released at 10:30 am.

Oil is holding up in the face of various data.

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

Marijuana

The momo crowd is lightly buying marijuana stocks.  Smart money is lightly selling marijuana stocks.

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.

Interest rates are ticking down and bonds are ticking up.

The dollar is stronger.

Gold futures are at $1314, silver futures are at $15.37, and oil futures are $59.85.

S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.

DJIA futures are up 9 points.

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

A Scenario For New Highs, Response To Your Questions

This is in response to emails I am getting from investors who are trying hard not to panic in the face of fearmongering related to inverted yield curve and other data.

The foundation of traditional technical analysis is that all known information is reflected in the chart of the stock market. There are strong reasons to disagree with the hypothesis; nonetheless there is significant merit to look at the charts even for those who do not believe in technical analysis. This is especially true at this time where there is a dichotomy between fearmongering on one hand and bullishness on the other hand. Let us explore with the help of a chart.

The Chart

Please click here for an annotated chart of S&P 500 (SPY). For the sake of full transparency, this is the same chart that was previously published without any changes. Somewhat different conclusions can be drawn from the charts of Dow Jones Industrial Average (DJIA), Nasdaq 100 ETF (QQQ) and small-cap ETF (IWM). Please note the following:

• The leading economic indicators from across the globe are cause for a big concern for the stock market.
• Inverted yield curve merits careful watching.
• Considering that the bull market is long in the tooth, the concern about the stock market is justified.
• On the positive side, central banks across the world are pursuing monetary policies that should put a floor under the stock market.
• A situation is developing that may prompt the Fed to cut interest rates.
• Under this scenario, as the rumors of Fed rate cut spread, a short squeeze can easily develop. If a short squeeze develops, the stock market can easily penetrate the resistance shown on the chart and go to new highs.
• The chart shows the support zone.
• From a longer term perspective, until the support zone shown on the chart is penetrated, there is not a strong bear case for the stock market from a technical perspective.
• Semiconductor stocks such as Micron (MU), AMD (AMD), Intel (INTC) and Applied Materials (AMAT) may be the leading indicator.
• Semiconductor stocks are ignoring poor fundamental data. This behavior often leads to a new up leg. A new up leg in semiconductor stocks may be the start of a push for the stock market to new highs.
• Large-cap tech stocks such as Apple (AAPL), Amazon (AMZN), Facebook (FB) and Microsoft (MSFT) are also acting like they want to go higher and take the stock market to new highs.

Momo Crowd And Smart Money In Stocks

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

Gold

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

Oil

Both momo crowd and smart money are buying oil.

Marijuana

New Jersey Senate called off marijuana vote because there was not enough support from law makers for legalization.

CRON reported earnings and revenues significantly below the whisper numbers and below the consensus numbers.

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.

Interest rates are ticking up and bonds are ticking down.

Currencies are range bound.

Gold futures are at $1315, silver futures are at $15.46, and oil futures are $59.86.

S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.

DJIA futures are up 155 points.

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

Bulls Vs. Bears

When the stock market has a bad day, many gurus come out making dire predictions such as the stock market going down 40%. On the other hand, when the stock market has a really good day, gurus come out making rosy predictions such as the stock market going up as much as 50%.

There are always cross currents in the stock market. Let’s explore how to navigate the stock market with the help of a chart.

The Chart

Please click here for an annotated chart of S&P 500 (SPY). Somewhat different conclusions can be drawn from the charts of Dow Jones Industrial Average (DJIA), Nasdaq 100 ETF (QQQ) and small-cap ETF (IWM). Please note the following:

• Irrespective of your political ideology, Mueller report is a win for Trump and a win for investors.
• The Arora Report monitors leading economic indicators from 23 countries. We have been warning investors since last year that the global growth is slowing. Now Wall Street is catching on.
• The yield curve has barely inverted. Contrary to gloom and doom projections based on the yield curve, in our analysis at The Arora Report, there are special factors related to central banks that are at play. For this reason, the historical precedents may not apply. Investors should keep a close watch but not panic.
• The chart shows Arora call that smart money was selling aggressively into the strength before the market fell. The advantage of monitoring smart money flows is at vivid display here.
• The chart shows Arora buy signal that was given on Christmas Eve which turned out to be the low.
• The chart shows a technical breakout.
• The chart shows a potential failure of the breakout on heavy volume and falling RSI. This is a negative pattern. However, the situation needs to be closely monitored as the bear case from a technical perspective will not be fully established unless the market falls through the support zone shown on the chart.

Momo Crowd And Smart Money In Stocks

The momo crowd aggressively sold  on Friday after aggressively buying on Thursday.  As we have previously shared with you, smart money sold into the strength. Smart money was inactive during Friday’s swoon. (Not buying)

This morning smart money is inactive. The momo crowd is acting like a yo-yo.

Gold

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

Oil

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

Marijuana

The momo crowd is buying marijuana stocks.  Smart money is selling marijuana stocks.

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 due to Trump win, it can easily turn positive.

Interest rates are ticking down and bonds are ticking up.

Currencies are range bound.

Gold futures are at $1319, silver futures are at $15.55, and oil futures are $58.79.

S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.

DJIA futures are down 24 points.