WEEKLY MARKET DIGEST: TAX REFORM POSITIVE FOR STOCKS, GOLD HAS A SHOT AT $1400, HARVEY AFTERMATH $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

WEEKLY MARKET DIGEST: TAX REFORM POSITIVE FOR STOCKS, GOLD HAS A SHOT AT $1400, HARVEY AFTERMATH $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.

THIN TRADING GETTING THINNER, POSITIVE ECONOMIC DATA, TAX REFORM, OUR OFFICE CLOSED TOMORROW FOR LABOR DAY

This is what you need to know today.

Thin Trading Getting Thinner

Already thin trading is getting thinner ahead of the Labor Day holiday.  Tomorrow will be the slowest day of the summer in terms of trading as most professionals take the day off.

You know our team works hard for you.  To allow our team members to spend more time with their families, our offices will be closed tomorrow.

Positive Economic Data

Initial Jobless Claims came at 236K vs. 236K consensus.

Personal Income came at 0.4% vs. 0.3% consensus.

Personal Spending came at 0.3% v. 0.4% consensus.

Tomorrow morning monthly jobs report will be released.  Due to very thin markets anticipated tomorrow, it will be best to wait for Tuesday next week to gage the appropriate reaction to the report.

China PMI

China’s official Manufacturing PMI came at 51.7 vs. 51 consensus.  This indicates that Chinese economy is likely to stay on a good trend.

Gold

Gold came under pressure on the weakening dollar.  But the dip was aggressively bought running gold right back up again.

Oil And Gasoline

Oil appears to be stabilizing after Texas floods.

Gasoline continues to rise but shows signs of topping.

Technical Patterns

Oil is tracing an Inverted Hammer.  This is bullish.  ETF of interest is .

Stocks in Chile are tracing an Engulfing Line.  This is bearish. ETF of interest is

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.

Gold futures are at $1314, silver futures are at $17.47, and oil futures are $46.33

S&P 500 resistance level is 2500; support levels are 2450, 2425, and 2400.

DJIA futures are up 74 points.

FIRST 3 HANDLE ON GDP SINCE 2015, STOCK REVERSAL, STRONGER DOLLAR HITS GOLD, OIL GLUT

This is what you need to know today.

First 3 Handle On GDP Since 2015

GDP is the most comprehensive measure of how the economy is doing.  GDP growth for Q2 has the first 3 handle since the first quarter of 2015.

GDP came at 3.0% vs. 2.7% consensus.  Please note that GDP is a lagging indicator.  To be successful investors ought to pay more attention to leading indicators.

Stock Reversal

After opening lower on North Korea concerns, stocks staged a dramatic reversal yesterday.  In late August, markets are thin as movers and shakers are on vacation.  Such moves are common.  There is not much to be read into it.

Stronger Dollar Hits Gold

Dollar is reversing some of yesterday’s decline.  Stronger dollar is hitting gold.

Oil Glut

Oil glut continues to build in the aftermath of hurricane Harvey.  About one-fifth of U. S. refining capacity is shut.  There are fears of a gasoline shortage.

Our insight is that so far refineries are not damaged.  Unless new damage occurs, the situation will easily reverse soon.

Technical Patterns

Several technology and biotechnology stocks are staging a Diamond Pattern. This is bullish.  ETF of interest is .

Several Taiwanese shares are tracing an Island Top.  This is bearish. ETF of interest is .

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 up and bonds are ticking down.

Gold futures are at $1313, silver futures are at $17.46, and oil futures are $46.06.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are down 27  points.

MONEY MOVES TO SAFE HAVENS, GOLD HAS A SHOT AT $1400, INCREASING CASH LEVELS AND ALLOCATION TO GOLD

This is what you need to know today.

Missile Flies Over Japan

In an unprecedented move, North Korea launched a ballistic missile that flew over Japan.  The missile launch is leading to ‘risk off’ in early trading.

Money Moves To Safe Havens

Money is moving into safe havens of gold, bonds and yen.

Momo Buys Stocks As Smart Money Lightly Sells

The ‘smart money’ is lightly selling stocks in early trade.  The momo (momentum) crowd is buying the dip.

Please see the ‘What To Do Now’ section below for increased allocation to cash.

Gold

The smart money is lightly buying gold.  The momo crowd is aggressively buying gold and silver.

Gold has a shot at approaching $1400.  Please take a look at the chart of gold we published on August 10th showing resistance levels for gold, please click here for the chart of gold.

There will be a separate post on increase in the allocation to gold.

Oil

Oil is lower and gasoline is higher for the reasons we described in yesterday’s Morning Capsule.

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.

Euro is breaking out against the dollar.

Gold futures are at $1329, silver futures are at $17.68, and oil futures are $46.62.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are down 116  points.

HARVEY MOVING THE MARKETS

This is what you need to know today.

Harvey Moving The Markets

Our sympathies go to those affected by hurricane Harvey.

Markets are often perverse.  Here is how Harvey is moving the markets, please note that all of these markets are very volatile right now and can reverse on a dime.

  • Dollar is moving lower on concerns about the damaged caused by Harvey.
  • Gold is moving higher on lower dollar.
  • WTI crude oil is moving lower because crude exports are impacted and refineries are not able to take crude.
  • Brent crude is moving higher because of less competition from WTI crude.
  • Gasoline is moving higher because of refinery shut downs.
  • Stocks are being bought because the damage was not as bad as some expected.
  • Refinery stocks are being bought because the damage is less than expected.
  • Oil stocks are falling on lower WTI.
  • Insurance stocks started out lower but are beginning to move up on expectations that insurance companies will raise rates.
  • Building material stocks started trading higher but there is selling pressure because typically after hurricanes these stocks run up and then come right back down.

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.

Gold futures are at $1303, silver futures are at $17.21, and oil futures are $47.54.

S&P 500 resistance levels are 2450 and 2500; support levels are 2425, 2400, and 2363.

DJIA futures are up 47 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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