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.
UNEXPECTED FALL IN JOBS GROWTH, SUSPECT SIGNAL ON CHINA
To gain an edge, this is what you need to know today.
Jobs Growth
Nonfarm Private Payrolls came at 25K vs. 170K consensus. This fall in hiring appears to be an anomaly. However there was another anomalous data on Retail Sales. Looking below the surface, so far, there is nothing in the data that sheds more light on this unexpected fall in hiring. The speculation is that this is weather related.
It is important to pay attention to ‘What To Do Now’ section below.
Suspect Signal On China
Chinese stock market has been rallying stronger than the U. S. stock market. China’s largest broker issued a sell signal. A sell signal in China by a big broker is a rarity. Nothing like this happens in China without government approval. The conclusion is that the Chinese government wants to slow the stock market rally.
Stocks in Shanghai fell 4.4%.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively selling stocks. Smart money is inactive.
Gold
Gold is being bought on weak jobs report. The momo crowd is aggressively buying. Smart money is inactive.
Oil
Oil is being sold on China and the weak jobs report. The momo crowd is aggressively selling oil. Smart money is inactive.
Marijuana
The momo crowd is buying marijuana stocks but smart money is aggressively selling them.
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 but can quickly swing positive.
Interest rates are ticking down and bonds are ticking up.
Dollar is weaker.
Gold futures are at $1298, silver futures are at $15.22, and oil futures are $55.12.
S&P 500 resistance levels are 2765, 2800 and 2840; support levels are 2740, 2700 and 2688.
DJIA futures are down 236 points.
ECB CUTS GROWTH AND INFLATION OUTLOOK, AND TAKES STEPS TO HELP THE ECONOMY
To gain an edge, this is what you need to know today.
ECB To Help The Economy
The European Central Bank (ECB) has cut both the growth and inflation outlook for the eurozone.
ECB cuts the growth forecast for 2019 to 1.1% from previous forecast of 1.7%.
ECB also cuts inflation outlook to 1.2% from 1.6%.
To help, ECB will offer cheap loans to banks and keep interest rates at record low for longer.
ECB will introduce another round of bond buying program known as Targeted Longer-Term Refinancing Operations (TLRO) to encourage banks to lend.
Jobless Claims
Initial Jobless Claims came at 223K vs. 224K consensus. This is a leading indicator and carries heavy weight in our models.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying stocks in the early trade. Smart money is inactive.
Gold
Trading in gold is listless. There is no discernable momo crowd or smart money activity.
Oil
Trading in oil is listless. There is no discernable momo crowd or smart money activity.
Marijuana
The momo crowd is aggressively buying marijuana stocks. Smart money is inactive.
Technical Patterns
Brazilian shares are tracing a head and shoulders top. This is bearish. ETF of interest is EWZ.
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 can easily swing either way.
Interest rates are ticking down and bonds are ticking up.
The euro is falling on ECB actions and the dollar is strengthening.
Gold futures are at $1285, silver futures are at $15.05, and oil futures are $56.74.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are down 34 points.
THE U. S. TRADE GAP SURGES
To gain an edge, this is what you need to know today.
U. S. Trade Gap Surges
Ironically, at a time when President Trump is focused on trade gap, the U. S. trade gap surged to $621 billion in 2018. This is the highest number in a decade.
ADP
ADP Employment Change came at 183K vs. 175K consensus. This number bodes well for the official jobs report that will be released at 8:30 am on Friday. The employment report has major impact on the stock market.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying stocks in the early trade. Smart money is inactive.
Gold
Trading in gold is listless. There is no material momo crowd or smart money activity.
Oil
API data showed that crude supply rose more than the consensus. Trading in oil is listless. There is no material momo crowd or smart money activity.
Marijuana
The momo crowd is buying marijuana stocks in the early trade. 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 neutral but can easily swing either way.
Interest rates are ticking down and bonds are ticking up.
Currencies are range bound.
Gold futures are at $1286, silver futures are at $15.13, and oil futures are $56.06.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are down 2 points.
SMART MONEY SELLS MOMO’S FAVORITE STOCKS, CHINA LOWERS GROWTH TARGET, SPOT ON CALL ON MARIJUANA BLACK MARKET
To gain an edge, this is what you need to know today.
Smart Money Sells
The momo crowd can run up their favorite stocks much higher than you can imagine. Yesterday smart money aggressively sold momo crowd’s favorite stocks. Examples of the stocks being sold were WDAY, CRM, SPLK, and ETSY. For example after good earnings, WDAY lost about $25 from high to low over two days.
Momo Crowd And Smart Money In Stocks
The momo crowd is buying in the early trade. Smart money is inactive.
China Growth
China has lowered its growth target to between 6% and 6.5%. This is the weakest in three decades.
India And Turkey
Trump is announcing plans to end favorable trade preferences for India and Turkey.
Gold
Trading in gold is listless. There is no discernable momo crowd or smart money activity.
Oil
The momo crowd is buying oil ahead of API data that will be released at 4:30 pm ET. The smart money is inactive.
Marijuana
Our long standing call has been that the black market in cannabis would stay strong. This call has been in direct contradiction to calls of other analysts. The new data from the Canadian government shows that our call has been correct. The Canadian government estimates that in the fourth quarter, black market sales of marijuana were $878 million. In contrast, legal sales of marijuana were $307 million.
The momo crowd is buying marijuana stocks in the early trade. 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 negative but can quickly turn positive.
Interest rates are ticking up and bonds are ticking down.
The dollar is slightly stronger.
Gold futures are at $1286, silver futures are at $15.12, and oil futures are $56.79.
S&P 500 resistance levels are 2800, 2840 and 2860; support levels are 2765, 2740 and 2700.
DJIA futures are up 16 points.
BOTH U. S. AND CHIINA TALKING UP THE TRADE DEAL
To gain an edge, this is what you need to know today.
The Trade Deal
Both the U. S. and China are talking up the trade deal. Leaks are being planted that the deal is near. This is creating optimism.
Money is flowing into Chinese stocks and other emerging markets.
In spite of the optimism, investors should not ignore that the market is in the resistance zone and overbought. Please click here for an annotated chart. We will do a separate post.
Momo Crowd And Smart Money In Stocks
The momo crowd is aggressively buying stocks in the early trade. Smart money is lightly selling into the strength.
Gold
The momo crowd is selling gold. Smart money is inactive.
Oil is getting a boost from optimism over China trade deal.
Oil
The momo crowd is buying oil. Smart money is inactive.
Marijuana
The momo crowd is aggressively buying marijuana stocks. Smart money is inactive.
Technical Patterns
Silver is tracing a double top. This is bearish. The ETF of interest is SLV.
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 out positive.
Interest rates are ticking down bonds are tick up.
Currencies are range bound.
Gold futures are at $1288, silver futures are at $15.16, and oil futures are $56.57.
S&P 500 resistance levels are 2840, 2860 and 2918; support levels are 2800, 2765 and 2740.
DJIA futures are up 103 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% – 31% and short to medium-term hedges of 5% – 15% and short term hedges of 5%.
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