WEEKLY MARKET DIGEST: STOCK MARKET MOVING UP ON HOPE OF A PERFECT ‘V’ SHAPE QUICK RECOVERY IN THE ECONOMY – NOT SUPPORTED BY THE DATA $DJIA $GLD $SPY

WEEKLY MARKET DIGEST: STOCK MARKET MOVING UP ON HOPE OF A PERFECT 'V' SHAPE QUICK RECOVERY IN THE ECONOMY - DATA DOES NOT SUPPORT IT $DIA $GLD $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.

STOCK MARKET OBLIVIOUS – NEGATIVE FED FUNDS FUTURES RATE COULD FORESHADOW REAL BAD THINGS

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

China Trade Talks

The stock market party is getting louder on the news that U. S. and China are talking about trade.

Devastating Job Losses

More champagne is being poured on unemployment rising to a devastating 14.7% and 20.5 million jobs lost. Why is the stock market celebrating the loss of jobs? We have previously written in detail about the reasons behind this rally. During the great depression in 1933 when breadlines were common, unemployment rate was 24.9%. The present unemployment rate is 10% below the all-time high and there are no widespread breadlines – what a great reason for stock market bulls to celebrate!

Negative Interest Rates

Stock market investors are too drunk to notice that Fed funds futures rate has gone negative. This contradicts the ‘V’ shape rally elixir that the stock market is drunk on. Further it could foreshadow real bad things to come. Let’s explore with the help of two charts.

Two charts

Please click here for an annotated chart of Dow Jones Industrial Average ETF (DIA) which represents the popular stock market index Dow Jones Industrial Average (DJIA).

Please click here for an annotated chart of January Fed fund futures.

Note the following:

  • The first chart gives stock market investors a long term perspective. This should always be the starting point of any analysis.
  • The first chart shows that after touching the top band of the ‘mother of support zones’, the stock market is threatening to break above the low band of the resistance zone. From a technical perspective, this is normal behavior. However when you take into account the macro picture and fundamentals, it is a different story.
  • The second chart shows that January Fed fund futures have gone negative. A value above 100 indicates negative rates.
  • As a note of caution, the Federal Reserve has not announced negative interest rates at this time. Futures simply indicate expectations by the market that the Fed will announce negative interest rates by January.
  • In our analysis at The Arora Report, calling negative interest rates ‘evil’ is not too strong.
  • Japan and Europe already have negative interest rates. Have you taken a look at the perpetual anemic growth rates in Japan and Europe? In our analysis those economies are decaying. In contrast the U. S. has vigor and potential for significant growth. Hopefully our leaders will realize that the negative interest rates in Europe and Japan have failed and will stay away from them. But hope is not a good investment strategy. Investors should start considering a scenario of negative interest rates in the U. S. for the first time.
  • Gold might be the primary beneficiary. Keep an eye on gold ETF (GLD), silver ETF (SLV) and gold miner ETF (GDX). Leveraged gold ETFs such as (NUGT) and (DUST) will likely provide many short term trading opportunities.
  • It is highly speculative due to lack of history but bitcoin may be a beneficiary. Keep an eye on Grayscale Bitcoin Trust (GBTC). It often trades at a premium and has several drawbacks but has an advantage for those investors who do not want to open a cryptocurrency account. There will likely be many opportunities in bitcoin in the future.
  • If the stock market was controlled by the prudent investors, there would be a massive selloff – perhaps a loss of over 50%. But the stock market is not controlled by the prudent investors.
  • The momo crowd controls the stock market. Expect a narrative to develop among the momo crowd that negative interest rates are good for stocks. Stocks compete with bonds. If bonds are paying lower rates or negative rates, shouldn’t stocks be priced much higher? Expect the momo crowd to concentrate their buying in five stocks: Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG) (GOOGL) and Facebook (FB).
  • What about negative interest rates reflecting a dire strait of the economy? That is simply too deep for the momo crowd.
  • In theory, bonds should benefit. However do not rule out a huge selloff especially if the Fed loses control of the interest rates.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is acting like a yo-yo  in gold in the early trade. Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

The momo crowd is acting like a yo-yo in oil in the early trade.  Smart money is inactive.

For longer term, please see oil ratings.

Marijuana

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

Technical Patterns

Technology stocks are tracing a bottom triangle. This is bullish. ETF of interest is IYW.

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 stock market to open strongly higher.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking up and bonds are ticking down.

The dollar is slightly weaker.

Gold futures are at $1716, silver futures are at $15.69, and oil futures are $23.95.

S&P 500 futures resistance levels are 2924 and 3000: support levels are 2870, 2785 and 2714.

DJIA futures are up 244 points

STOCK MARKET INVESTORS ARE MAKING A BIG MISTAKE – HIGHLIGHTED BY NEW CORONAVIRUS RESEARCH

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

China Data

The bullishness in the stock market today is that China’s exports rose more than the consensus.  Do you trust the data coming out of China?

Initial Jobless Claims

Initial Jobless Claim came at 3.169M vs. 3.05M.

New Research Paper

Scientists tell us that there is still not enough known about coronavirus. Don’t tell that to the stock market momo (momentum) crowd. The momo crowd has it all figured out that the stock market is going to go to new highs. The economy is opening up. People are going back to work. The government is borrowing record amounts. The Fed is printing money at an unprecedented rate. Vaccines are moving along. Antivirals are coming. What is there not to be bullish about? For a change, the new bullishness in the stock market as of this writing is coming from the new data from China and not from the economy opening up.

States that are opening up are seeing an increase in new coronavirus cases. This does not matter because the new motto is “Money, some liberty and the pursuit of more money.

There is a new coronavirus research paper out: Spike mutation pipeline reveals the emergence of a more transmissible form of SARS-CoV-2. The mutation is resulting in higher viral load and evasion of existing antibodies. In plain English, this means that those who suffered from a different strain may not be immune to the new strain. It is reasonable to extrapolate that current vaccines and treatments in development may not work well on the new strain if they are based on a different antibody epitope.

On the positive side, FDA has cleared Moderna (MRNA) Phase 2 coronavirus vaccine study to proceed. Let’s explore with the help of three charts.

Three Charts

Please click here for an annotated chart of Dow Jones Industrial Average ETF (DIA) which represents the popular stock market index Dow Jones Industrial Average (DJIA).

Please click here for a daily chart of Dow Jones Industrial Average ETF DIA.

Please click here for an annotated chart of S&P 500 ETF (SPY) that represents the benchmark stock market index S&P 500 (SPX).

Note the following:

  • The first chart is a long term chart giving investors a long term perspective and should always be the starting point of any analysis.
  • The first chart shows that the stock market has been up against the lower band of the resistance zone for a while.
  • The second chart shows that as the stock market has bumped against the lower band of the resistance zone, it has been confined to a narrow range. The chart provides the clarity that debunks the narrative that the stock market is running up every day. However, this can change quickly at any time.
  • The third chart compares S&P 500 ETF SPY with Dow Jones Industrial Average DIA and equal weighted S&P 500 ETF (RSP).
  • Note that SPY is down about 11% for the year but RSP is down about 21% for the year. The reason is that S&P 500 is capital weighted and has heavy weight from these five stocks, Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG) (GOOGL) and Facebook (FB).
  • The conclusion to be drawn is that if a handful of large capitalization stocks are excluded from the analysis, the stock market is not running up like the present popular narrative.

The Big Mistake

The big mistake that many investors are making is that they are believing in a binary outcome.

Investors should plan on a wide range of outcomes and use a framework that accommodates a wide range of outcomes using probabilities.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is acting like a yo-yo in the early trade. Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

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

For longer term, please see oil ratings.

Marijuana

The momo crowd is buying marijuana stocks in the early trade. 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 strongly positive.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking  down and bonds are ticking up.

The dollar is stronger.

Gold futures are at $1696, silver futures are at $15.20, and oil futures are $26.27.

S&P 500 futures resistance levels are 2924 and 3000: support levels are  2785, 2714 and  2653.

DJIA futures are up 298 points

MONEY MORE IMPORTANT THAN LIFE – TRUMP CONFIRMS THE STOCK MARKET MESSAGE – HERE IS HOW TO NAVIGATE

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

Shift In American Values Is Key To The Future Of The Stock Market

There is an old saying: “Watch what they do, not what they say.” “Life, liberty and the pursuit of happiness” is in the United States Declaration of Independence but that was a long time ago. Over time, societal values change. The coronavirus and stock market have shown us that the new values are: “money, some liberty and the pursuit of money.” America is opening up even though in many locations deaths from coronavirus are rising. Coronavirus task force is about to be disbanded. As the economy opens up, there will likely be more sickness and more deaths. You have to have been under a rock to not notice that the stock market has been prioritizing money from the economy opening too soon over life. Now Trump has confirmed the stock market message. Trump says that even if more Americans get sick and die, the country must re-open.

Here is the key question for stock market investors. Have American values permanently changed or is it a transitory phase? I would like to believe that this is a transitory phase. Will the stock market excitement go away if more Americans get sick and the level of deaths remains high? Let’s explore with the help of two charts.

Two Charts

Please click here for an annotated chart of Dow Jones Industrial Average ETF (DIA) which represents the popular stock market index Dow Jones Industrial Average (DJIA).

Please click here for a chart of S&P 500 ETS (SPY) that represents the benchmark stock market index S&P 500 (SPX) compared to four securities.

Note the following:

  • The first chart gives investors a long term perspective and should always be the starting point of any stock market analysis.
  • The second chart gives investors a short term perspective.
  • The first chart shows that the stock market opened the month of May below the low band of the resistance zone and is now threatening to penetrate the resistance zone.
  • Ideally, new strategic buying should take place if either the stock market pulls back to the support zone shown on the first chart or the stock market goes above the resistance zone shown on the chart.
  • Under these market conditions, it is very important for prudent stock market investors to differentiate between strategic buying and selling vs. tactical actions.
  • The second chart shows that year-to-date American Airlines (AAL) stock is down 67%, Disney (DIS) stock is down 32%, Amazon (AMZN) stock is up 22% and Nasdaq 100 ETF (QQQ) which represents Nasdaq 100 ETF (NDX) is slightly positive.

How To Navigate

All investors are differently situated.

Those who believe the shift in American values is permanent, are underinvested or cannot resist the temptation may consider buying stocks and ETFs that are not outliers from a band surrounding S&P 500. For example, in the second chart, American Airlines and Amazon would be considered outliers but the ETF QQQ and Disney would merit buying.

It is true that Disney stock is about 25% higher compared to when it dipped into the Arora buy zone as shown on the second chart. It is also true that Disney reported earnings less than the consensus and suspended its dividend. There are many unknowns ahead for Disney but if you are a believer in the stock market going up due to the economy opening, Disney has an unmatched set of assets. Disney has received permission to open its park in Shanghai. Also on the positive side, Disney stock is down about 32% year to date and may go lower due to poor earnings and dividend suspension. A dip is a buying opportunity for those who are believing in the economy opening story.

Buying the ETF QQQ is a safer way than buying the high flyer Amazon, again only for those who have bought into the narrative of stocks going higher or are underinvested. As a note of caution, consider only those stocks and ETFs to buy that have a buy now rating of ‘Yes’ and buy very small quantities and plan to scale in.

The foregoing is for those who believe in the permanent shift in American values. It goes without saying that those who think the value shift is transitory may consider taking some profits to take advantage of the rally.

Those who are comfortably situated within the protection bands for their long term portfolio may consider taking no strategic action.

All investors should consider taking advantage of short term trading opportunities and nibbling when signals are given.

ADP Employment

ADP Employment came at -20.236 million vs. -21.5 million consensus.  This means that the employment loss is slightly better than expected.

Momo Crowd And Smart Money In Stocks

The momo crowd is buying stocks in the early trade. Smart money sold into the strength earlier in the morning but is inactive since then.

Gold

The momo crowd is selling gold in the early trade. Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

API reported crude inventory build of 8.44M barrels vs. 8.12M barrel consensus.  This data was bearish but a short squeeze occurred causing the crude to rally to over $25.  Such up moves due to short squeezes on bearish data are common.  When crude went over $25, smart money selling came in reversing the momentum. Once the momentum  reversed, the momo crowd that was buying earlier started selling.

For longer term, please see oil ratings.

Marijuana

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

Technical Patterns

Spanish stocks are tracing a continuation triangle. This is bearish. ETF of interest is EWP.

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.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking up and bonds are ticking down.

The dollar is  stronger.

Gold futures are at $1692, silver futures are at $15.05, and oil futures are $23.23.

S&P 500 futures resistance levels are  2924 and  3000: support levels are  2785, 2714 and 2653.

DJIA futures are up 158 points

MAKING A FORTUNE BY BUYING ‘VALUE’ IN THIS STOCK MARKET MAKES SENSE BUT LOOK AT THIS CHART FIRST

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

Buying Value In This Stock Market

There is no secret that the stock market is controlled by the momo (momentum) crowd. The momo crowd buys not because of the fundamentals but because the market is going up. At a time like this, many prudent investors are gravitating towards value investing – the strategy of finding and buying ‘value’.  On the surface this makes sense. However, before following the value strategy, take a look at the charts linked below and avoid concentration in value stocks.

Two Charts

Please click here for an annotated chart of Dow Jones Industrial Average ETF (DIA) which represents the popular stock market index Dow Jones Industrial Average (DJIA).

Please click here for a chart of S&P 500 ETF (SPY) that represents the benchmark stock market index S&P 500 (SPX) compared with eight popular stocks and ETFs.

Note the following:

  • The first chart gives stock market investors the long term perspective and should be the starting point of any analysis.
  • The first chart shows that the stock market in the month of May has been slightly below the low band of the resistance zone shown on the chart but now is threatening to penetrate the resistance zone.
  • The second chart shows five big tech stocks of Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), Facebook (FB) and Alphabet (GOOG) (GOOGL).
  • The second chart shows stock of Berkshire Hathaway (BRK.B), Warren Buffett’s company. Warren Buffett is known for finding value and buying it in the stock market.
  • The second chart shows large-cap value iShares S&P 500 Value ETF (IVE).
  • The second chart shows SPDR S&P 600 Small Cap Value ETF (SLYV).
  • The second chart shows that Warren Buffett has underperformed Apple stock by 18% even though Warren Buffett is a major shareholder of Apple. This shows how poor the performance of the rest of Buffett’s portfolio has been. In spite of lack of performance, Warren Buffett is not buying stocks.
  • The second chart shows that the large-cap value ETF has underperformed Amazon stock by about 44%.
  • The second chart shows that as bad as the performance of large-cap value ETF has been, the small-cap ETF has performed worse.
  • The second chart shows that the small-cap ETF has underperformed the large-cap ETF by about 12%.

What Does It All Mean?

Consider the following:

  • At times the White House has cited coronavirus forecast by University of Washington’s Institute for Health Metrics Evaluation. The model is forecasting the number of deaths could reach 135,000 by early August.
  • As more states open up, the death count from coronavirus appears to be going higher.
  • The U. S. government is set to borrow an unprecedented $3 trillion this quarter.
  • Federal Reserve is printing money at an unprecedented rate.
  • Millions of American’s have lost their jobs.
  • Many businesses are being destroyed.
  • At a time like this, the momo crowd sees only one outcome – a quick ‘V’ shaped recovery and the stock market going to new highs.
  • In contrast, prudent investors see a wide range of outcomes.

In our analysis at The Arora Report, it is simply arrogant and greedy to be locked into only one outcome theory. The level of arrogance and greed has reached about the same height as it was on January 30 when in spite of The Arora Report call that a stock market drop was ahead due to coronavirus, investors were aggressively buying momentum stocks.

Investors should consider a wide range of outcomes and position their long term portfolios and short term trading accordingly. It is important that in formulating this plan, investors should avoid concentration on finding and buying value based on the hard data from the charts shown above. Yes, on the surface, the concept of finding and buying value in this stock market seems attractive, but the facts are value investing is not working at this time.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is acting like a yo-yo in gold in the early trade. Smart money is inactive.

For longer term, please see gold and silver ratings.

Oil

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

For longer term, please see oil ratings.

Marijuana

The momo crowd is buying marijuana stocks in the early trade.  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 strongly higher.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking up and bonds are ticking down.

The dollar is stronger.

Gold futures are at $1706, silver futures are at $14.97, and oil futures are $23.26.

S&P 500 futures resistance levels are  2870, 2924 and 3000: support levels are 2785, 2714 and  2653.

DJIA futures are up 313 points

BUFFETT SAYS ‘BET ON AMERICA’ IN THE STOCK MARKET – HERE IS HOW

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

Wide Range Of Probabilities 

We have been sharing with you since March 19th that there is a wide range of probabilities. Now Warren Buffett agrees with us.

“I would say the range of probabilities, or possibilities on the economic side are still extraordinarily wide,” Buffett said in his annual meeting.

In contrast, the stock market has been assuming that there is only one possibility that incorporates all of the following good things – a ‘V’ shaped recovery, huge pent up demand, successful vaccines and drugs shortly, stocks going to new highs and ABSOLUTELY NO ADVERSE LONG TERM CONSEQUENCES of extraordinary money printing by the Fed and borrowing by the U. S. government.

Do Not Make This Mistake

Believing that there is only one outcome, bullish or bearish, is a mistake. Prepare for a wide range of potential outcomes. Also understand that there may be different outcomes in different time frames.

For Those Who Are Underinvested 

It is time to be patient.  Strategically buy when ETFs and stocks dip into the buy zone if following the Best Way or scaling in  very, very small tranches if following the Good Way those securities that are rated Buy Now.

For Those Who Are Overinvested

This is the time to tactically take partial profits and reduce your exposure.

Momo Crowd Disappointed In Buffett

For most of his life, Buffett has been a cheerleader for the stock market. During 2008, Buffett became the ‘chief cheerleader’ for the stock market.  Stock market gurus have been calling Buffett to cheerlead the stock market again but Buffett had remained silent.  The momo crowd had been pinning its hopes on the annual meeting that occurred this weekend. The momo crowd was predicting that Buffett would come out swinging urging everyone to buy stocks.

Instead, what did Buffett do? He urged caution. He did not use his money to buy stocks during the down turn. He is heavily in cash.

Bet On America Carefully

Warren Buffett is a legendary stock market investor. When Buffett speaks about the stock market, investors should listen.

Buffett says, “You can bet on America but you have to be careful about how you bet,” he said. “Markets can do anything.” Let’s breakdown Warren Buffett’s comment in two important parts – ‘bet on America’ and ‘be careful.’

I wholeheartedly agree with both important parts of Warren Buffett’s statement. Here are the key questions for investors. In practical terms, how do you carefully invest in this stock market that has risen in the face of coronavirus related economic deterioration? Is there a common sense framework that prudent investors can follow? Let’s explore ‘be careful’ with the help of two charts. I will discuss ‘bet on America’ in a future column.

Two Charts

Please click here for annotated chart of Dow Jones Industrial Average ETF (DIA) which represents the popular stock market index Dow Jones Industrial Average (DJIA). For the sake of full transparency this chart is exactly the same as previously published and no changes have been made.

Please click here for an annotated chart of Berkshire Hathaway (BRK.B).

Note the following:

  • The first chart is a monthly chart giving investors a long term perspective. This chart should be the starting point of any stock market analysis.
  • The most important point to note from the first chart is that the month of May opened below the low band of the resistance zone shown on the chart. Based on the historical data, this is a high risk point to buy and a good opportunity to take some profits. Unrealized profits can quickly disappear. For this reason, ZYX Change Method calls for booking some profits on a continuous basis while holding proper position sizes of long term good core positions in stocks and ETFs.
  • Due to wild gyrations that the stock market is experiencing, it creates a ton of confusion for investors. Prudent investors are looking for clarity. The first chart is a great tool to bring clarity and simplicity to the stock market.
  • The first chart shows that the stock market hit the top band of the ‘mother of all support zones.’ Then it bounced to the bottom band of the resistance zone. This is the normal expected behavior of the stock market.
  • The second chart shows the support zone and the resistance zone for the Berkshire Hathaway stock.
  • The second chart shows that as of this writing, Berkshire Hathaway stock is stuck between the support zone and the resistance zone.
  • The second chart shows that RSI is trending down. This is a negative.
  • The foregoing items would call for not buying Berkshire stock at this time. Warren Buffett seems to agree. Warren Buffett is sitting on $137 billion in cash, yet he bought back only $1.7 billion of Berkshire stock in spite of Buffett’s stock becoming cheaper.
  • Buffett sold all of his stake in the stocks of American Airlines (AAL), Delta Airlines (DAL), Southwest Airlines (LUV) and United Airlines (UAL). Buffett continues to hold his stake in Apple (AAPL) stock, Bank of America (BAC) stock, JPMorgan (JPM) stock and Coca-Cola (KO) stock.

Framework For Being Careful

Here is a common sense and proven practical frame work that The Arora Report has used for a long time for prudent investors.

  • Start out by reading a gem from Warren Buffett’s annual letter that the media ignored:
  • During the dip in the stock market Buffett bought only $1.8 billions of stock which is a small fraction of the record $137 billion cash that he is holding.
  • Follow the concept of protection bands.
  • Determine where you want to be in the protection bands based on your or your clients’ preferences if you are a money manager.
  • Make a distinction between strategic and tactical buying/selling.
  • Buy when the stocks and ETFs dip into the buy zones.
  • Lighten up near the target zones.
  • Do tactical buying and selling, especially short term, when signals are given.

Momo Crowd And Smart Money In Stocks

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

Gold

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

Money is flowing out of stocks and into gold.

For longer term, please see gold and silver ratings.

Oil

The momo crowd is acting like a yo-yo in oil.  The momo crowd was aggressively selling earlier in the morning. As of this writing the momo crowd is buying oil. Smart money is inactive.

For longer term, please see oil ratings.

Marijuana

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

Technical Patterns

Large-cap stocks are tracing a wedge. This is bearish. ETF of interest is SPY.

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.  This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.

Interest rates are ticking down and bonds are ticking up.

The dollar is stronger.

Gold futures are at $1708, silver futures are at $14.95, and oil futures are $19.52.

S&P 500 futures resistance levels are 2870, 2924 and 3000: support levels are 2785, 2714 and  2653.

DJIA futures are down 224 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 34% – 44% and short to medium-term hedges of  3% – 15% and short term hedges of 8% – 20%.

 

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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Check out our enviable performance in both bull and bear markets.

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STOCK MARKET INVESTORS PAY ATTENTION TO SHIFT OF BILLIONS OF DOLLARS AWAY FROM POPULAR STOCKS $AMZN $CSCO $DIA $DJIA $FB $MRNA $MSFT $PTON $TDOC $WMT $WORK $ZM

Money is beginning to shift away from stocks that did well while the economy shut down to fight coronavirus. The ...

VACCINE SUCCESS MAY UNLEASH THE SECOND LEG OF THE FORCE TO PROPEL THE STOCK MARKET TO NEW HIGHS $JNJ $PFE $MRNA $NVAX $INO $SRNE $DIA

Many investors not familiar with the mechanics of short squeezes are confused by the strength of the stock market rally ...

WEEKLY MARKET DIGEST: PAY ATTENTION: FED CHAIR SAID SIGNIFICANT DOWNSIDE RISKS AHEAD $DIA $GLD $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 ...

WILL TRUMP BOW TO CHINA TO SAVE APPLE, QUALCOMM, CISCO AND BOEING? $AAPL $AMZN $BA $CSCO $DIA $DJIA $FB $GOOG $MSFT $QCOM $SPX

Amid a debate about stock market investors underestimating the risks from the coronavirus-led shutdown of the global economy, China risk ...

TRUMP IS HALF RIGHT ABOUT RICH GUYS BETTING AGAINST THE STOCK MARKET—HERE IS THE OTHER HALF $DIA $DJIA $AAPL $AMZN $MSFT $FB $GOOG $GOOGL

President Trump said Wednesday that “so-called ‘rich guys’” may be “speaking negatively” about the stock market to profit from its ...

IF YOU COULD BUY ONE STOCK MARKET ETF, THIS WOULD BE IT – IT IS NOT S&P 500 $SPX $SPY $QQQ $FDN $NFLX $PYPL $FB $AMZN $NDX

Amid the coronavirus-led shutdown, the internet has become an increasingly important part of people’s lives and the economy. As a ...

IF YOU COULD BUY ONLY ONE ECOMMERCE STOCK, THIS IS IT – IT’S NOT AMAZON $SPY $SPX $AMZN $JD $BABA $DJIA $DIA

One of the hottest sectors in the stock market is ecommerce. Because of the coronavirus shutdown, ordering products online has ...

THE BIGGEST THREAT TO STOCK MARKET INVESTORS MIGHT BE POLITICIANS GONE BERSERK $DJIA $DIA $SPY $SPX $AAPL $AMZN $MSFT $FB $GOOG $GOOGL $AMC

Some investors believe the rules of risk and reward have been suspended, as the U.S. government borrows heavily and the ...

STOCK MARKET OBLIVIOUS – NEGATIVE FED FUNDS FUTURES RATE COULD FORESHADOW REAL BAD THINGS $DIA $DJIA $AMZN $AAPL $GLD $GDX $SLV $NUGT $DUST $GBTC

The stock market’s party is getting louder on news that the U.S. and China are talking about trade. And more Champagne ...

STOCK MARKET INVESTORS ARE MAKING A BIG MISTAKE – HIGHLIGHTED BY NEW CORONAVIRUS RESEARCH $MRNA $DJIA $DIA $SPY $SPX $RSP $GOOG $AAPL $AMZN $FB

Scientists tell us there is still not enough known about the novel coronavirus. Don’t tell that to the bulls in ...

MONEY MORE IMPORTANT THAN LIFE – TRUMP CONFIRMS THE STOCK MARKET MESSAGE – HERE IS HOW TO NAVIGATE $DIA $DJIA $SPY $SPX $DIS $AAL $AMZN $QQQ $NDX

Societal values change over time. “Life, liberty and the pursuit of happiness” is in the Declaration of Independence. The response to ...

DON’T BE LIKE WARREN BUFFETT — AVOID VALUE STOCKS FOR NOW $AAPL $BRK-B $DIA $DJIA $IVE $SLYV $SPY

Many prudent investors are gravitating toward value investing, the strategy of finding and buying undervalued stocks. On the surface this ...

BUFFETT SAYS ‘BET ON AMERICA’ IN THE STOCK MARKET – HERE IS HOW $AAL $AAPL $BAC $BRK-B $DAL $DIA $DJIA $JPM $KO $LUV $SPY

Warren Buffett is a legendary stock market investor. When Buffett speaks about the market, investors should listen. Buffett held court at ...

WEEKLY MARKET DIGEST: TRUMP WANTS TO PUNISH CHINA FOR CORONAVIRUS – HERE IS WHY THE STOCK MARKET INVESTORS SHOULD BE CONCERNED $DJIA $GLD $QQQ $SPY

Weekly Digest from The Arora Report is popular among serious investors and money managers because they have found studying insights ...

AS TRUMP THREATENS TO PUNISH CHINA – LOOK AT X-RAYS OF AMAZON, APPLE AND FACEBOOK FOR STOCK MARKET DIRECTION $DIA $DJIA $FB $AAPL $AMZN $GOOG $MSFT

Stock market investors should be concerned as President Trump contemplates punishing China for the spread of the coronavirus. In these times, ...

THE NEW STOCK MARKET HOPIUM – 30 MILLION JOBS LOST AND BAD EARNINGS ARE GREAT REASONS TO BUY $DIA $DJIA $SPY $SPX $GILD $TWTR $MSFT $GOOG

Weekly jobless claims were published Thursday and, again, the total was ugly: 3.8 million. I have witnessed periods when the stock ...

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