WEEKLY MARKET DIGEST: STOCK MARKET MELT UP POSSIBILITY, OPEC AGREEMENT, AND GOLD ON FED MINUTES $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

WEEKLY MARKET DIGEST: STOCK MARKET MELT UP POSSIBILITY, OPEC AGREEMENT, AND GOLD ON FED MINUTES $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.

STRONG NEW ECONOMIC DATA, MELT UP POSSIBILITY, OPEC AGREEMENT, MOMO IN GOLD AFTER FED,

This is what you need to know today.

Memorial Day Holiday

As you know our team works very hard. To allow our team members to spend time with their families, our offices will be closed tomorrow for the Memorial Day holiday.  Most markets will be open tomorrow but will be closed on Monday.

Strong New Economic Data

Initial Jobless Claim came at 234K vs. 238K consensus.  This is a leading indicator and carries a heavy weight in our models.   This means that the job picture is strong and fewer people are being laid off.

Whole Sale Inventories came at -0.3% vs. +0.2% consensus.  Falling inventories mean more goods have to be produced and stocked.  This leads to more economic activity.

Melt Up Possibility

S&P 500 is likely to open up above the strong resistance of 2400.  The probability of a melt up will go significantly higher if S&P 500 moves above 2425.

OPEC Agreement

OPEC has reached a nine month agreement.  Market reaction in oil has been ‘buy the rumor sell the news. ‘  First oil moved up over $52 and then aggressive sellers came in.  Oil is at $50.67 as of this writing.

As a full disclosure, ZYX Buy sold its oil position yesterday into the strength expecting, in advance, this kind of reaction.

Momo In Gold After Fed

After the release of Fed minutes, which were in line with consensus, the momo crowd aggressively bought gold and silver. This is in line with momo’s historical behavior.

Of note there is no buying by the ‘smart money.’

Technical Patterns

Coffee is tracing a Descending Triangle.  This is a bearish pattern.  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 but expect the market to start higher.

Interest rates, bonds, and currencies are range bound.

Gold futures are at $1254, silver futures are at $17.18, and oil futures are $50.67.

S&P 500 resistance levels are 2425, 2450 and 2500; support levels are 2363, 2334, and 2300.

DJIA futures are up 71 points.

FED MINUTES, OPEC MEETING, CHINA WARNING, GOLD

This is what you need to know today.

Fed Minutes

Fed minutes will be released at 2:00 pm ET this afternoon.  This has the potential to be a market moving event. If there are opportunities or actions need to be taken, we will inform you on the appropriate Real Time Feed.

OPEC Meeting

The OPEC meeting is about to start in Vienna.  We will do a separate post.

China Warning

Moody’s has downgraded China soverign debt from A1 to Aa3.  This is the first cut since 1989.  We will do a separate post on ZYX Emerging

Gold

Momo crowd continues to aggressively buy gold and silver. However for the first time in recent days, the ‘smart money’ was a light seller yesterday afternoon.  Interestingly, aggressive buying by the momo crowd was not enough to contain light selling by the smart money causing a downward move towards $1250 support.

Please also see ‘Technical Patterns.’

Technical Patterns

Gold traced an Engulfing Line. This is a bearish pattern.  ETF of interest is .

Several home builders traced an Outside Bar. This is a bearish pattern.  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 but expect the market to start higher.

Interest rates have moved up and bonds have moved down.

Gold futures are at $1252, silver futures are at $17.05, and oil futures are $51.39.

S&P 500 resistance levels are 2400, 2450 and 2500; support levels are 2363, 2334, and 2300.

DJIA futures are up 9 points.

PROPOSAL TO SELL HALF OF U. S. STRATEGIC PETROLEUM RESERVES, $3.6 TRILLION BUDGET CUT, TERROR ATTACK, GERMAN POWER HAUS

This is what you need to know today.

Proposal To Sell Half Of U. S. Strategic Petroleum Reserve

Trump budget calls for selling half of the U. S. strategic petroleum reserve to raise $16.5 billion.  As of this writing the market is oblivious to the news.  If the news is picked up, it may put pressure on oil which in turn may put pressure on stocks.

$3.6 Trillion Budget Cut

Trump budget is proposing a $3.6 trillion cut in spending over the next decade.  The budget is roughly in line with what we shared with you previously.  Big cuts will come from slashing social programs with the exception of Medicare and Social Security.

The consensus is that the budget is dead on arrival because too many special interests have influence over Congress.

Terror Attack

A terror attack at a concert in the U. K. has killed 22 people including children.  As has been historically the case, markets with the exception of gold are ignoring the terror attack.

Gold

The terror attack is providing support to gold and silver.

The momo crowd is buying silver aggressively.

There is no buying by the ‘smart money’ in precious metals.

Data and a statement from Germany (please see the section below) are putting pressure on the dollar and in turn helping gold.

German Power Haus

Germany grew by 0.6% in the first quarter vs. 0.4% consensus. The data is helping power euro higher.

German Chancellor Merkel stated that the euro is ‘too weak. ‘

Technical Patterns

None of note

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 negative but expect the market to start out positive.

Interest rates are ticking down and bonds are ticking up.

Dollar is weaker.

Gold futures are at $1259, silver futures are at $17.15, and oil futures are $51.10.

S&P 500 resistance levels are 2400, 2450 and 2500; support levels are 2363, 2334, and 2300.

DJIA futures are up 48 points.

QUIET MARKETS, SUCCESSFUL TRUMP TRIP, OIL MOVES UP ON IRAN ELECTION

This is what you need to know today.

Quiet Markets

For a change, markets are quiet with the exception of the oil market. The reason is that there is no new data to move the markets at this time.  However expect the market to move based on new rumors regarding Russia probe.

Trump Trip

One reason the markets are quiet is that Trump is having a successful overseas trip.  He delivered a highly acclaimed speech on terrorism in Saudi Arabia.  Trump seems to be sticking to the script and doing well.

Oil Moves Up On Iran Election

Iranian President Hassan Rouhani easily won re-election trouncing his opponents.  Rouhani is pro-western while his opponents were hardline anti-western.  Oil is taking encouragement from the election results and has moved over $51.

Gold

The momo crowd continues to aggressively buy gold hoping for bad things to happen to Trump in Russian investigation.  Of note is that there is no buying by the ‘smart money.’

Indonesia Credit Upgrade

Standard & Poor’s has raised Indonesia credit rating to investment grade.  This is likely to increase foreign fund flows into Indonesia.  Indonesia provides one of the best opportunities in the world for investors. We will do a separate post in ZYX Emerging.

More Trouble In Brazil

There is more pressure on President Temer to resign after revelation of a tape recording to bribe a potential witness in the corruption probe.  So far he is standing firm claiming the tape is doctored.  Major potential opportunity in Brazil may be ahead.

Technical Patterns

Oil is tracing a Head And Shoulders Bottom.  This is a bullish pattern.  ETF of interest is .

Many oil service stocks are tracing a Flag.  This is a bullish pattern.  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 negative but expect the market to open higher..

Interest rates are ticking up and bonds are ticking down.

Currencies are range bound

Gold futures are at $1258, silver futures are at $17.04, and oil futures are $51.08.

S&P 500 resistance levels are 2400, 2450 and 2500; support levels are 2363, 2334, and 2300.

DJIA futures are up 48 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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