WEEKLY MARKET DIGEST: TRADE TRIAL BALLOON MOVES STOCKS HIGHER, OIL BOUGHT AND GOLD SOLD $DIA $GLD $QQQ $SLV $SPY $TBT $USO

WEEKLY MARKET DIGEST: TRADE TRIAL BALLOON MOVES STOCKS HIGHER, OIL BOUGHT AND GOLD SOLD $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.

TRADE TRIAL BALLOON MOVES STOCKS HIGHER

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

Trade Trial Balloon

Stocks are moving higher across the globe on a trade trial balloon.  The rumor is that the U. S. may roll back some tariffs on Chinese goods.  The trial balloon has already been popped but the optimism lingers.

President Trump does not want the stock market to go down. Expect more trial balloons to support the market.

Industrial Production

Industrial Production came at 0.3% vs. 0.2% consensus.

Capacity Utilization came at 78.7% v. 78.5% consensus.

Momo Crowd And Smart Money In Stocks

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

Gold

Gold is being sold on prospects of a trade deal with China.

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

Oil

Oil is moving higher on prospects of a trade deal with China.

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

Marijuana

The momo crowd is buying marijuana stocks.  Smart money is lightly selling on the up spikes.

Canadian marijuana producer HEXO Corp (HYYDF) that has a joint venture with the producer of Coors Beer (TAP) plans to list on NYSE American and will start trading on January 23.

Technical Patterns

Healthcare stocks are tracing a triangle.  This is bullish.  ETF of interest XLV.

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 higher.

Interest rates are ticking up and bonds are ticking down.

Currencies are range bound.

Gold futures are at $1282, silver futures are at $15.43, and oil futures are $52.96.

S&P 500 resistance levels are 2658, 2661 and 2688; support levels are 2631, 2615 and 2594.

DJIA futures are up 164 points.

A STEEP LOSS IN CONTRACT SEMICONDUCTOR REVENUE, ADDING SHORT TERM HEDGES

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

A Steep Loss In Contract Semiconductor Revenue

These days semiconductors are everywhere.  It is helpful to look at semiconductors as an indicator of global economy.

A large number of semiconductor companies design and market their own semiconductors but contract out the manufacturing.  TSM is the largest contract semiconductor manufacturer.  This morning TSM reported the largest drop in a decade in revenues.

In our analysis, most of the drop appears to be related to smart phones and not an indication of general weakness in the global economy. Having said that, it is important to stay somewhat cautious after this data.

Adding Short Term Hedges

The market is approaching resistance.  Adding new short term hedges.  Please see the ‘What To Do Now’ section below.

Jobless Claims

Weekly Jobless Claims came at 213K vs. 221K consensus.  This is an excellent number.  This is also a leading indicator and carries a heavy weight in our timing model.

Momo Crowd And Smart Money In Stocks

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

Gold

Trading in gold in listless as there are no new developments.

Oil

Oil is range bound after EIA data that was mixed.

Marijuana

ACB is offering $250 million of convertible senior notes.  The stock is down on dilution.

The momo crowd is buying marijuana stocks. Smart money is lightly selling marijuana stocks.

Technical Patterns

Natural gas ETF UNG is tracing an outside bar.  This is bearish.

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 $1290, silver futures are at $15.53, and oil futures are $51.48.

S&P 500 resistance levels are  2615, 2631 and 2658; support levels are 2594, 2550 and 2500.

DJIA futures are down 82 points.

POSITIVE REACTION TO BANK EARNINGS, AG BARR ON MARIJUANA

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

Positive Reaction To Bank Earnings

Banks are the life blood of the economy.  Bank earnings have been mixed.  However the market is reacting positively even to bad earnings.  This is a good sign for the stock market.

Brexit

Prime Minister May’s proposal was defeated in the Parliament.  A no confidence vote against May is ahead.  There is also a proposal for a second referendum.

Normally uncertainty is one of the biggest enemy of the markets.  However, so far the market does not care about the Brexit issues.

Momo Crowd And Smart Money In Stocks

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

Gold

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

Oil

API data was bearish.  API showed a crude inventory draw of 650K barrels vs. consensus of a draw of 2.5 million barrels.

Gasoline also showed a large build of 5.99 million barrels.

Oil has stabilized after the bearish data and now traders are waiting for EIA data to be released at 10:30 am.

Marijuana

Attorney General nominee William Barr said at a Senate hearing he would support law prohibiting marijuana nationwide.  His statement stopped a short squeeze in marijuana stocks.  On the positive side, he also said that he will not use federal resources to target marijuana companies.

Significant selling has been occurring in Tilray (TLRY) on expiration of option lockup.  We previously shared with you that option lockup was expiring and gave a signal to take partial profits right at the top before over $20 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 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 $1291, silver futures are at $15.64, and oil futures are $51.78.

S&P 500 resistance levels are 2631, 2658 and 2661; support levels are 2594, 2550 and 2500.

DJIA futures are up 122 points.

CHINA TAX CUT ANNOUNCEMENT TURNS NEGATIVE SENTIMENT TO POSITIVE

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

China Tax Cuts

China has announced tax cuts to stimulate its economy.  Stocks in Asia rallied on the news.

Brexit Vote

Brexit vote is scheduled for today. The consensus is that Prime Minister May faces a defeat.  If there is a defeat the next course of action is not clear. The consensus is that it should not roil the markets.  However investors ought to keep an eye because consensus has often been wrong regarding reaction of the markets to Brexit.

German GDP

German GDP came at 1.5% roughly in line with consensus.

Momo Crowd And Smart Money In Stocks

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

Gold

Gold is holding on to its gains but still trading below the key resistance of $1300. The momo crowd is buying gold.  The smart money is inactive.

Oil

Oil is gaining on China’s tax cuts.  Traders are awaiting API inventory data.

Marijuana

In some marijuana stocks, the short squeeze has taken another leg up after New York granted Canopy Growth (CGC) license to process hemp.

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 start higher.

Interest rates are ticking down and bonds are ticking up.

The dollar is slightly stronger.

Gold futures are at $1292, silver futures are at $15.68, and oil futures are $51.43.

S&P 500 resistance levels are 2594, 2615 and 2631; support levels are 2550, 2500 and 2450.

DJIA futures are up/down 2 points.

CHINA TRADE DATA HURTS THE SENTIMENT

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

Earnings Season Begins

Citigroup (C ) has kicked off the earnings season.

As always earnings season will provide opportunities.  Analysts’ estimates have come down over the last month.  There is a lower bar for companies to beat now. If companies do end up beating this lower bar and there is progress on trade talks with China, expect the market to go higher.

On the other hand, if the companies are not able to beat even the lower estimates and there is no progress on trade talks, expect the market to break the recent lows.

Please pay attention to the ‘What To Do Now’ section below.

China Trade Data

Both import and export data in China were significantly worse than the expectations.  This is dampening the sentiment for the stock market rally.

In our analysis, this data should be of less concern than the market believes because there was a lot of front loading ahead of the tariffs.

Momo Crowd And Smart Money In Stocks

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

Gold

Money is moving into gold out of stocks.  The momo crowd is buying gold. The smart money is inactive.

Oil

Oil is seeing selling on weak China data.

Marijuana

A short squeeze on marijuana stocks continues.  After the orders from retail investors entered over the weekend are filled, it will be a test to see if the short squeeze fizzles.

Aurora Cannabis (ACB) is buying Whistler Medical Marijuana Corp in a deal valued at C$175 million.  Whistler sells medical cannabis in Australia and the Cayman Islands.

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.

Interest rates are ticking down and bonds are up.

Money is moving into the safety of Japanese yen.

Gold futures are at $1289, silver futures are at $15.60, and oil futures are $50.92.

S&P 500 resistance levels are 2594, 2615 and 2631; support levels are 2550, 2500 and 2450.

DJIA futures are down 178 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 17% – 31% and short to medium-term hedges of  5% – 15% and short term hedges of 5%.

 

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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