WEEKLY MARKET DIGEST: TRUMP TO FOLLOW THROUGH, MODI SELLING HURTS GOLD, BIGGEST MOVE IN COPPER $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

WEEKLY MARKET DIGEST: TRUMP TO FOLLOW THROUGH, MODI SELLING HURTS GOLD, BIGGEST MOVE IN COPPER $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.

TRUMP SHOWS SIGNS OF FOLLOWING THROUGH, BIGGEST ON RECORD IN COPPER, OIL BREAKS DOWN

This is what you need to know today.

Trump

Analysis of statements by Trump and his close allies shows that Trump intends to follow through with his pre-election campaign policies.  This has negative implications for the current market rally.  The current market rally is partially based on expectations that pre-election campaign was simply rhetoric and it will be significantly moderated now that Trump has won.

Copper Insanity

Since the election, copper has shown the biggest move ever on the record since 1986 on the current contract.

This is the height of insanity because the infrastructure projects Trump is talking about are not going to use that much copper.  Further, there are not many shovel ready projects.  Most of the infrastructure spending will be in 2018.

Logic and analysis are not the strong suits of the momo crowd that is rushing into copper

As a full disclosure, we are short selling copper taking advantage of the momo crowd.

Oil

Oil breaks down below support of $44.  Nothing fundamental has changed other than the momo crowd is experiencing massive losses as they bought around $50 and now are being forced to sell due to margin calls.

Gold

Physical gold demand in India continues to weaken.  Please see chart posted yesterday on the Real Time Feed.

Markets

Our very, very short-term early stock market indicator is negative.

Bonds and interest rates are stabilizing after a big move.

Currencies are range bound.

Gold futures are at $1258, silver futures are at $18.73, and oil futures are $43.82.

S&P 500 resistance levels are 2165, 2200 and 2222; support levels are 2150, 2132, and 2120.

DJIA futures are down 50 points.

REDUCING CASH AND HEDGES, REINSTATING ZONES, TRUMP RALLY CONTINUES, MODI HURTS GOLD

This is what you need to know today.

Reducing Cash And Hedges

Our algorithms are calling for reducing cash and hedges as we enter the seasonally strong period.  It is important to make portfolio adjustments slowly, buying more only on dips and shorting more only on rips.  In other words, do not start aggressively buying today at these highs without first waiting for a pull back.

For details, please see ‘What To Do Now’.

Reinstating Zones

All zones are being reinstated.  It goes without saying that particularly at this critical time, investors should be carefully reading all new posts before making any buy or sell decisions.  If you have not yet migrated to The Best Way, this is the time to step up.

Model Portfolio Updates

Our Model Portfolio Updates are done systematically on hard data.  We need to see if various markets attempt reversals of yesterday’s and this morning’s trends and how they behave during the reversals before publishing new updates to Model Portfolios.  Since we are dependent on trading patterns, new updates may arrive as soon as later today but no later than early next week.

Trump Rally

Trump rally continues.  There is heavy buying in the pre-market.  Japan’s Nikkei reversed yesterday’s Trump losses and closed up about 7%.

Move up in copper and infrastructure stocks was way overdone.

Modi Hurts Gold

India is often the biggest source of demand for gold.  Indian Prime Minister Modi has directed  that 500 and 1000 rupee notes be banned.

This is a huge deal.  These notes represent 20% of cash value in circulation and 80% of cash outstanding.

Indian economy has long suffered from black money.  Only 49 million out of 473 million working Indians pay taxes.  A common method to convert black money into white money has been to slowly buy gold by paying cash using large bills.  As large bills become worthless, this important source of demand for physical gold will disappear.

This is the real reason that gold reversed after rallying to $1336 on Trump election and is now trading at $1273 as of this writing.

Markets

Our very, very short-term early stock market indicator is undeterminable due to heavy noise in the data but expect market to open higher.

Dollar continues to gain strength.

Yen is especially weaker.

Bonds continue to fall.

Interest rates continue to tick up.

Copper, iron ore and other non-precious metals continue a monster Trump rally.

Gold futures are at $1273, silver futures are at $18.57, and oil futures are $44.58.

S&P 500 resistance levels are 2180, 2200 and 2222; support levels are 2150, 2132, and 2120.

DJIA futures are up 84 points.

TRUMP WINS AND SO DO ARORA ALGORITHMS, WHAT TO DO NOW AND SUSPENDING ALL ZONES

This is what you need to know today.

Trump Wins

Trump wins in an upset victory.  Senate stays Republican. House stays Republican.  Senate rules require 60 votes out of 100 to do serious business.  Democrats are likely to hold 48 -49 seats.  If Democrats stay united, they will be able to block some Trump measures.

Arora Algorithms

As Wall Street swung back almost 100% to Clinton victory since FBI Director Comey exonerated Clinton, Arora algorithms were not swayed.  We stayed with our prudent middle of the road position saying that Clinton win was not a sure thing and definitely did not jump onto Clinton band wagon.  The Arora Report was one of the rare  advisory services that was right on Brexit, selling gold when it was $1900, selling silver when it was $50, selling oil when it was $108, selling all stocks before 2008 great recession and going heavily into inverse ETFs as well as shorts.

Markets

Our very, very short-term early stock market indicator is undeterminable due to very heavy noise in the data.

Stock futures initially fell limit down 5% before recovering as shown on the annotated chart of Nasdaq futures.

Please click here for the annotated chart.

This up move is shocking Wall Street again as Wall Street was predicting further down move.

Gold is up to $1304 but not $100 – $200 that Wall Street was predicting.

Gold futures are at $1304, silver futures are at $18.76, and oil futures are $44.97.

S&P 500 resistance levels are 2120, 2132 and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are down  224 points.

QUIET TRADING ON THE ELECTION DAY, RUMOR MONGERS ARE GOING TO HAVE A FIELD DAY

This is what you need to know today.

Election Day

Trading is quiet.  There is not much sense in telling you about other economic developments across the globe because they will have no effect on the markets as markets await election results.

Rumors

Historically, rumor mongers have a field day on quiet days.  Rumors of exit polls may whipsaw markets around.

Markets

Our very, very short-term early stock market indicator is neutral.

Gold, oil, bonds and most currencies are range bound.

Yen is weaker.

There is aggressive buying by the momo crowd in silver.

Gold futures are at $1281, silver futures are at $18.29, and oil futures are $44.47.

S&P 500 resistance levels are 2132, 2150 and 2165; support levels are 2120, 2100, and 2063.

DJIA futures are down 28 points.

COMEY CAUSES SQUEEZE, STOCKS AND DOLLAR SQUEEZE UP, GOLD AND BONDS SQUEEZE DOWN

This is what you need to know today.

Squeeze

FBI Director, Comey, all but exonerated Clinton of the email fiasco.

Stocks and dollar are being squeezed up.

Bonds and gold are being squeezed down.

Mexican peso moves up strongly as Trump’s  chances to become president recede.

Oil

Secretary general of OPEC has stated that OPEC will implement Algiers’ accord.  Oil is moving up on the news.  Adding to the momentum is a statement by Iranian oil minister that OPEC has finally come to its senses.

Natural Gas

Traders are having second thoughts on running down natural gas on the assumption that this will be a very mild winter.

Markets

Our very, very short-term early stock market indicator is positive.

Japanese yen is especially weak on the Clinton news.

Gold futures are at $1288, silver futures are at $18.20, and oil futures are $44.65.

S&P 500 resistance levels are 2120, 2132 and 2150; support levels are 2100, 2063, and 2038.

DJIA futures are up 254  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 15 – 25% of assets in cash or treasury bills, and short to medium-term hedges of  15% and very short term hedges of 0%.

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