WEEKLY MARKET DIGEST: UGLY JOBS SURPRISE GOOD FOR GOLD AND BONDS BUT BAD FOR STOCKS AND DOLLAR $DIA $GLD $QQQ $SLV $SPY $TBF $TBT $USO

WEEKLY MARKET DIGEST: UGLY JOBS SURPRISE GOOD FOR GOLD AND BONDS BUT BAD FOR STOCKS AND DOLLAR, A SURPRISE LOSER FROM TRUMP MOVE ON CLIMATE CONTROL $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.

UGLY JOBS SURPRISE GOOD FOR GOLD AND BONDS BUT BAD FOR STOCKS AND DOLLAR, A SURPRISE LOSER FROM TRUMP MOVE ON CLIMATE CONTROL

This is what you need to know today.

Ugly Jobs Surprise

After strong ADP data, hopes were high for a strong job report today.  The reality is an ugly surprise.  Nonfarm Private Payrolls rose  147K vs. 172K consensus.  Prior numbers were also revised downwards.

Good And Bad

This is good for gold and bonds but bad for stocks and dollar.

Smart Money Buys Gold

For a change, there is light buying by the ‘smart money’ in gold.  It appears that the smart money is buying to cover short positions they established in anticipation of a strong jobs report.  The momo crowd  is an aggressive buyer.

Oil, The Surprise Loser

Oil is the surprise loser from Trump pulling out of Paris climate control agreement.  We may do a separate post on the subject.

There is also new data from Iraq and Libya showing that oil production is going up.

rig count data will be released at 1:00 pm ET.

Japan

Nikkei jumped 1.6%.  As a full disclosure ZYX Allocation and ZYX Buy have positions in Japan.

Technical Patterns

None of note

This is powerful information and many investors use this to enter trades in addition to our official signals.  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.

Gold futures are at $1275, silver futures are at $17.35, and oil futures are $47.43.

S&P 500 resistance levels are 2450 and 2500; support levels are 2400, 2363, and 2334.

DJIA futures are up 41 points.

BLOWOUT ADP HELPS STOCKS AND DOLLAR BUT NEGATIVE FOR GOLD AND BONDS, THE MOTHER OF ALL NUMBERS AHEAD TOMORROW

This is what you need to know today.

Blowout ADP

ADP is the largest private payroll processor in the United States.  It uses its data to provide a picture of employment.

ADP Employment Change came at 253K vs. 180K.

This is a blowout number good for stocks and the dollar but bad for gold and bonds.

Weekly Unemployment Claims

Weekly Unemployment Claims came at 248K vs. 238K consensus.  This is a leading indicator and carries a heavy weight in our timing  models. We use a four week moving average.  Overall the picture still looks very good for the U. S. economy.

Mother Of All Numbers

For stocks, bonds, gold and dollar the mother of all numbers is the  monthly Department of Labor employment report.  This report will be released at 8:30 am ET tomorrow morning.

Gold 

The ‘smart money’ lightly sold gold after the momo crowd bought gold on a golden cross yesterday.

The smart money again lightly sold gold after release of ADP data.  The momo crowd, oblivious to the data, has so far been buying the dip aggressively.

Near-term direction of gold will primarily depend on the Department of Labor data that will be released tomorrow morning barring any new geopolitical development.

Oil

Oil spiked up on release of API data. API showed a draw of 8.67 million barrels vs. consensus of a draw of 2 million barrels.  In plain English, more oil was drawn out of inventory than expected.

EIA data will be released at 11:00 am ET today and will likely be a mover of oil.

Technical Patterns

Nasdaq 100 Index traced a Key Reversal Bar. This is bearish.  ETFs of interest are , , and .

Junior gold miners are tracing a Symmetrical Continuation Triangle.  This is a bearish pattern.  ETFs of interest are , and .

This is powerful information and many investors use this to enter trades in addition to our official signals.  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 up and bonds are ticking down after ADP.

Dollar is stronger after ADP.

Gold futures are at $1265, silver futures are at $17.08, and oil futures are $48.43.

S&P 500 resistance levels are 2425, 2450 and 2500; support levels are 2400, 2363, and 2334.

DJIA futures are up 9 points.

THE NEXT MARKET MOVER MAY BE THE BEIGE BOOK, IRON ORE CRASHES

 This is what you need to know today.

The Next Market Moving Event

The next market moving event may be the Beige Book.  The Beige Book will be released at 2:00 pm ET.  The Beige Book is a report that summarizes economic conditions in each one of the 12 Federal Reserve districts.  It is called Beige Book because the color of the cover is beige.

Gold Supported

Gold is supported on slightly weaker dollar.

There is potential of a short squeeze in gold.  If a short squeeze occurs, gold can take another leg up.

Oil

Oil is under pressure as skepticism builds over OPEC production cuts.  API inventory data will be released at 4:30 pm today.  Expect oil to move on rumors related to API data during the day.

Pound Weakens

The British pound is weakening on a poll showing that Teresa May’s party may not win majority in Parliament on June 8th.

China Going Strong

The official manufacturing data released overnight shows that China is going strong.

Iron Ore Crashes

Iron ore prices are crashing. This is primarily attributable to Chinese day traders. As a full disclosure, ZYX Short has a short position in an iron ore producer.

Technical Patterns

Several biotech stocks are showing a Double Top.  This is bearish. ETFs of interest are , , and .

This is powerful information and many investors use this to enter trades in addition to our official signals.  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 stock market to open higher.

Interest rates and bonds are range bound.

Gold futures are at $1268, silver futures are at $17.37, and oil futures are $48.54.

S&P 500 resistance levels are 2400, 2450 and 2500; support levels are 2363, 2334, and 2300.

DJIA futures are up 41  points.

RATE RISE IN JUNE, DOVISH DRAGHI, GOLD SUPPORTED

This is what you need to know today.

Rate Rise In June

Odds are increasing that the Fed will raise interest rates in June.  The Fed is also likely to lay out a plan for reducing its balance sheet.

Both of the above events are not fully discounted in the stock market and does pose a risk.

Dovish Draghi

ECB Chief Draghi, in a statement, is more dovish than expected. His dovishness is backed by data.  The newly released economic confidence data for Eurozone shows a dip from the post financial crisis high reached earlier.

Gold Supported

Gold is being supported by comments by Draghi, concern about upcoming Italian election and a North Korean missile firing.

The momo crowd continues to buy.  There is no buying by the ‘smart money.’

If the Fed raises rates next month, that will be negative for gold.

Personal Income And Spending

U. S. economy is 70% consumer based.  Therefore we pay a lot of attention to personal income and personal spending.

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

Home Prices

U. S. Home Price Index came at 5.9% vs. 5.9% consensus.

Oil

Oil rally above $50 failed.  As of this writing oil has pulled back to $49.35

Brazil

Brazil’s President Temer says that his coalition is holding despite the corruption  scandal.

Investors are rushing headlong to buy Brazil even though potential risks are high.  Investors seem to be driven by ‘buy the dip’ mentality irrespective of the event.

Technical Patterns

Several real estate stocks (REIT) 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.  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, bonds and currencies are range bound.

Gold futures are at $1264, silver futures are at $17.27, and oil futures are $49.35.

S&P 500 resistance levels are 2425, 2450 and 2500; support levels are 2400, 2363, and 2334.

DJIA futures are down 28  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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