WEEKLY MARKET DIGEST: STOCKS, GOLD AND OIL MOVE ON POWELL SPEECH: SENTIMENT POSITIVE $DIA $GLD $QQQ $SLV $SPY $TBT $USO

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WEEKLY MARKET DIGEST: STOCKS, GOLD AND OIL MOVE ON POWELL SPEECH: SENTIMENT POSITIVE $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.

AGGRESSIVE BUYING ON SPECULATION THAT POWELL WILL BE MORE DOVISH THAN EXPECTED

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

Powell’s Speech

In early trade there is aggressive buying on speculation that Powell will be more dovish than expected.  In plain English, this means that Powell may back off from the course of interest rate hikes that the Fed has set.  If interest rates do not rise, it will be extremely beneficial for the stock market.

We will shortly find out when Powell speaks.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying.  The smart money is inactive.

Gold

There is aggressive buying in gold on speculation that Powell will be dovish.  Low interest rates are good for gold.

Oil

Oil is also rising on speculation that Powell will be dovish.

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 indeterminate as it depends on what Powell says.

Interest rates, bonds and currencies are range bound.

Gold futures are at $1200, silver futures are at $14.67, and oil futures are $67.94.

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

DJIA futures are up 62 points.

TRUMP COMMENTS ON IMPEACHMENT, TIGHT RANGE AHEAD OF POWELL’S SPEECH

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

Trump Comment

Trump says he believes the stock market would crash if he were to be impeached.

Fed

The FOMC minutes that were released yesterday afternoon show that the Fed is staying on the path to raise rates again.  However a lot has happened since the last meeting. Markets are trading in a tight range waiting for Powell’s speech tomorrow at Jackson Hole.

Europe

European Central Bank (ECB) has published a synopsis of its July policy meeting.  ECB is preparing to wind down its stimulus program.

IHS Composite PMI came at 54.4 vs. 54.5 consensus. In our analysis this is a positive reading.  However some experts believe that this data shows the risks are to the downside.

Momo Crowd And Smart Money In Stocks

The momo crowd is lightly buying.  The smart money is inactive.

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Gold

Gold is pulling back on a stronger dollar.

Oil

Oil is seeing significant buying after EIA inventory data.

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.

Bonds and interest rates are range bound.

Gold futures are at $1197, silver futures are at $14.57, and oil futures are $67.94.

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

DJIA futures are up 7 points.

INVESTORS SHOULD GET AHEAD AND PAY ATTENTION TO COHEN AND MANAFORT GOING INTO NOVEMBER

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

One of the keys to success in investing is to think ahead. The November midterm election is not too far away. Recent polls show that Democrats are resurgent. Legal troubles of Michael Cohen and Paul Manafort are going to give more ammunition to Democrats and distract President Trump from his agenda. Let’s explore with a chart.

Please click here for an updated chart of S&P 500 ETF (SPY). Please note the following from the chart:

  • The chart shows the market starting to breakout from the resistance.
  • The chart shows pullback below the prior resistance on the news related to Cohen and Manafort.
  • The chart shows the key level.
  • Bears look at the potential double top shown on the chart and stand their ground. A double top will be a big negative.
  • Often in a situation like this, RSI is a helpful indicator. In this case, RSI can go either way.
  • Divergence in RSI from the last peak shows that momentum has waned. This favors bears.
  • The volume is low. This indicates that there is no conviction.
  • The pattern looks different for Dow Jones Industrial Average (DJIA), Nasdaq 100 ETF (QQQ) and small cap ETF (IWM).

Consumer Confidence

The U. S. economy is about 70% consumer based. For this reason consumer confidence is important. Bulls argue that the market cannot go down because earnings are rising. Well, earnings are rising because of high consumer confidence. If a political crisis erupts, it may hurt consumer confidence which in turn will hurt earnings. It is as simple as this to give investors a reason to be somewhat cautious going into the November midterm election.

The Leaders

The leaders are not immune. In the bull market, it is important to look at the market leaders. When speculation arose about a guilty plea of Cohen and the conviction of Manafort, money flows abruptly turned from extremely positive to negative in market leaders such as Amazon (AMZN), Facebook (FB), Microsoft (MSFT) and Google (GOOG) (GOOGL). Money flows also turned negative in popular semiconductor stocks such as Nvidia (NVDA), AMD (AMD), Intel (INTC) and Micron (MU). Marijuana stocks such as Canopy Growth (CGC), Tilray (TLRY) and Cronos Group (CRON) were rocketing before the news. On speculation of the news, money flows turned from extremely positive to negative.

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Future Not The Past

The sum total of the foregoing is that looking into the rear view mirror, the market should go up. But should you not be looking ahead? Investors should not make decisions based only on the chart and look at a more comprehensive model with a proven record in both bull and bear markets such as ZYX Global Multi Asset Allocation Model with 10 inputs. Please click here to see the 10 inputs. Further, markets are dynamic and static models do not work over a long period. ZYX Global Multi Asset Allocation Model is adaptive in that it changes itself with market conditions. Please click here to see how it changes itself.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying. The smart money is lightly selling.

Gold

Gold has moved over $1200 on momo crowd buying.  The smart money seems to be taking profits.

Oil

Oil is moving higher on API showing larger than expected inventory drop.

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, bonds and currencies are range bound.

Gold futures are at $1207, silver futures are at $15.53, and oil futures are $67.94.

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

DJIA futures are down 52 points.

TRUMP’S CRITICISM OF POWELL MOVING THE MARKETS

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

Trump Moves The Markets

Trump has criticized Powell for raising interest rates at the time of a trade war. This has had a cascading effect.  It first moved the dollar lower. The lower dollar in turn is bringing buying into stocks, bonds, gold and oil.

Momo Crowd And Smart Money In Stocks

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

Gold

The momo crowd is aggressively buying gold. The smart money is inactive.

Oil

The momo crowd is aggressively buying oil. The 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 positive but can easily swing negative.

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Interest rates are range bound.

Gold futures are at $1197, silver futures are at $14.75, and oil futures are $66.21.

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

DJIA futures are up 48 points.

REDUCE CASH AND HEDGES, CRITICAL JACKSON HOLE SPEECH AHEAD, MOMO BUYS

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

Reduce Cash And Hedges

On Friday, cash and hedges were reduced.  Please scroll down to ‘What To Do Now’ section.

Jackson Hole Speech Ahead

The Fed Chairman Powell will give a critical speech at Jackson Hole conference at 10:00 am on August 24th.  This speech may set the tone for the markets for the near future.  It is of utmost importance to pay attention to this speech.

Momo Crowd And Smart Money In Stocks

The momo crowd is aggressively buying stocks. The smart money is lightly buying stocks.

Gold

Buying  in gold by smart money started Friday afternoon at a time when the momo crowd was aggressively selling.  This morning the momo crowd has switched to aggressive buying and the smart money is lightly selling into the strength.

Oil

Trading in oil is listless.

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 but can quickly swing negative.

Interest rates are ticking down and bonds are ticking up.

The dollar is mixed.

Gold futures are at $1192, silver futures are at $14.71, and oil futures are $64.97.

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

DJIA futures are up 14 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 19% – 29% and short to medium-term hedges of  10% – 15% and very short term hedges of zero%.

 

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