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.
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REBOUND, TAKE MORE PROFITS ON HEDGES
To gain an edge, this is what you need to know today.
Rebound
Stock rebound started after a big down push in the late afternoon. The consensus thinking among traders is that the big down push took out the weak hands and a bottom has formed. In our analysis, probability is only about 60% that the traders are right.
Futures started climbing in after hours. There was a rebound in Asia leading to a rebound in Europe and now the strength is coming into the U. S. market.
Take Partial Profits On Hedges
There are significant profits on hedges now. Consider taking more partial profits. Please see ‘What To Do Now’ section.
Momo Crowd And Smart Money In Stocks
The momo (momentum) crowd is aggressively buying stocks. The smart money is inactive.
Gold
Gold saw a strong move up yesterday as money moved out of stocks and into gold. The move was exaggerated because of short covering. This morning in the early trade gold is giving up some of its gains as the money is moving back into stocks.
Oil
Oil is rebounding along with stocks.
Marijuana
The momo crowd is very aggressively buying marijuana stocks this morning. Smart money is 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 up.
Interest rates are ticking up and bonds are ticking down.
The dollar is range bound.
Gold futures are at $1222, silver futures are at $14.67, and oil futures are $71.78.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are up 257 points.
TAKE PARTIAL PROFITS ON HEDGES, SMART MONEY CALL ON STOCKS PROVEN SPOT ON — HOW TO AVOID LOSING MONEY IN THE STOCK MARKET
To gain an edge, this is what you need to know today.
Take Partial Profits On Hedges
There are significant profits on hedges due to the market fall. Consider taking partial profits on hedges. Please see What To Do Now section for the hedges to be left after profit taking.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively selling stocks in the early trade. The smart money is lightly buying stocks.
Smart Money Call On Stocks Proven Spot On — How To Avoid Losing Money In The Stock Market
Smart money call in advance about market drop in October has now proven spot on.
The Arora Report subscribers’ long portfolios have been 41 – 61% protected in advance plus further protection has been gained through underweighting of high beta stocks and ETFs as well as short positions. There are three key questions for investors now: how to avoid losses in the stock market, where is the support and is the market oversold? Let’s explore with the help of two charts.
Two charts
Please click here for the chart of money flows in 11 popular tech stocks. Tech stocks have been the market leaders. Therefore it makes sense to pay the most attention to tech stocks. For the sake of complete transparency, this chart is exactly the same without any changes that was first provided to the subscribers to The Arora Report on September 25th when the market was flying high.
Please click here for the annotated chart of S&P 500 ETF (SPY). Similar 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 from the charts:
- The chart shows that The Arora Report added short term hedges on September 7th. Now those hedges have not only added protection but they are profitable. We are beginning to book profits on those hedges now.
- The chart shows the Arora call on fear of October based on smart money flows on September 25th.
- The chart shows the support zone. As of this writing, the market is right at the top band of the support zone. The most likely scenario is for the market to bounce from the support zone.
- RSI shows that the market is oversold. This indicates that the market should bounce. Perhaps after a deeper excursion into the support zone.
How to avoid losses in the stock market
The Arora Report subscribers came to the market drop well protected. Here are some of the things we had done.
- We held 21 – 31% cash.
- We held medium term hedges of 10 – 15%.
- We held short term hedges of 10 – 15%.
- We underweighted high beta stocks and ETFs are being crushed. At this time all of our long portfolios are drastically underweight in high beta stocks and ETFs. For this reason in addition to the protection from holding cash and hedges, our subscribers are being spared the pain that many are experiencing because most investors (NOT The Arora Report investors) are overweight high beta. The FAANG stocks Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOG) (GOOGL) are high beta stocks. Amazon and Netflix tend to have the highest beta among these stocks. Other popular tech stocks such as Square (SQ), AMD (AMD), Micron (MU) and NVIDIA (NVDA) are examples of high beta stocks.
- We hold select short positions. Short positions provide gains when the market goes down.
- We hold an inverse ETF that selectively short sells highly touted stocks. This ETF goes up when the highly touted stocks fall.
We update daily recommended cash levels and hedges. As an example after the fall, we are taking profits on hedges.
The foregoing provides a road map for all investors to avoid stock market losses with real examples and real numbers given in advance.
Gold
Gold is seeing significant buying as a hedge against stock market fall.
Oil
Oil is being sold as hurricane fears ease.
Marijuana
The momo crowd continues to aggressively buy 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 neutral but can swing either way in a volatile manner.
Interest rates are ticking down and bonds are ticking up.
The dollar is ticking down.
Gold futures are at $1209, silver futures are at $14.48, and oil futures are $72.10.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are down 20 points.
MOMO SELLS HIGH BETA STOCKS, EARNINGS AHEAD AND CHINA’S WEAPON APPROACHES KEY LEVEL
To gain an edge, this is what you need to know today.
Earnings Season
Earnings season is about to start. There have not been many preannouncements and that is good news for investors who are long.
China’s Weapon
The big weapon China has against the U. S. is to weaken its currency. By weakening its currency, China can easily negate tariffs that Trump has imposed. There are increasing signs that China’s yuan may weaken. Seven yuan to the dollar is a key level.
It is important for investors to keep an eye on Chinese currency as it may ultimately have major repercussions for U. S. stocks.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively selling high beta stocks. The smart money is inactive.
High beta stocks are the stocks that move more than the market. Investors love them when they are going up and panic when they are going down. Investors simply need to understand that when they invest in high beta stocks, these stocks can move a lot in either direction.
Gold
Trading in gold is listless.
Oil
Oil and natural gas are seeing a lot of buying as many rigs are being shut down due to the hurricane in the Gulf.
Marijuana
Positive sentiment continues. ACBFF will list on NYSE before the end of the month. And IGC has filed a patent application for treatment of fatigue.
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 swing positive.
Currencies, interest rates and bonds are range bound.
Gold futures are at $1189, silver futures are at $14.35, and oil futures are $74.62.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are down 72 points.
GLOBAL GROWTH FORECAST CUT, MOMO SELLING, FIRST LEGAL EXPORT OF MARIJUANA FROM CANADA TO THE U. S.
To gain an edge, this is what you need to know today.
Global Growth Forecast Cut
IMF has cut global growth forecast to 3.7% from 3.9%.
At The Arora Report we follow economic indicators from 23 countries. This cut in global growth is consistent with the data we have been sharing with you in the Morning Capsules.
Momo Crowd And Smart Money In Stocks
The momo (momentum) crowd is selling stocks in the early trade. The smart money is inactive.
Gold
The momo crowd is selling gold. The smart money is inactive.
Oil
Oil is seeing buying due to a hurricane in the Gulf of Mexico.
Marijuana
CGC has completed the first legal export of marijuana from Canada to the U. S. for medical purposes.
Technical Patterns
Emerging markets are tracing an Inside Bar. This is bullish. ETF of interest is EEM.
Biotechs are tracing a Double Top. This is bearish. ETF of interest is IBB.
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.
The dollar is stronger.
Interest rates and bonds are range bound.
Gold futures are at $1190, silver futures are at $14.34, and oil futures are $74.71.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are down 83 points.
SENTIMENT IN U. S. STOCKS DAMPENS ON SLUMP IN CHINA AND ITALY, MONEY FLOWS INTO BRAZIL
To gain an edge, this is what you need to know today.
Interconnected Markets
Markets across the world are connected. Foreign markets often have significant effect on U. S. stocks. The is the case today.
In China, Shanghai Composite fell 3.7%.
In Italy, MIB has fallen 2.5%.
Slump in China and Italy is dampening the sentiment in U. S. stocks in the early trade.
Money Flowing Into Brazil
Money is flowing into Brazil. Investors love Jair Bolsonaro. Bolsonaro is a retired Army captain who defends Brazil’s past dictatorship and has made derogatory comments about women and gays. In election results, Bolsonaro took a commanding lead. The probability is high that he will win the run off election to become Brazil’s president. Investors love him because he is a right wing politician and advocates investor friendly policies.
We will do a separate post on ZYX Emerging about a buy signal on Brazil.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively selling in the early trade. The smart money is inactive.
Notice the pattern — smart money is often a seller on strong up days and often a buyer on strong down days. We encourage our subscribers to adopt the same tactic.
Gold
Gold is seeing a lot of selling on the stronger dollar. The momo crowd is aggressive sellers of gold. The smart money is inactive.
Oil
The last leg of short squeeze in oil is easing. The momo crowd is still an aggressive buyer but smart money is inactive.
Marijuana
In early trade smart money is selling marijuana but the momo crowd is buying.
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.
The bond market is closed.
Gold futures are at $1189, silver futures are at $14.37, and oil futures are $73.51.
S&P 500 resistance levels are 2918, 2925 and 2950; support levels are 2860, 2840 and 2800.
DJIA futures are down 109 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 short term hedges of 7%.
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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