(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
TOKYO JUMPS 5.9%, A TON OF OVERHEAD SUPPLY IN STOCKS AND OIL
This is what you need to know today.
Draghi rally (please see yesterday’s morning capsule) continues. Overnight Tokyo jumped 5.9%. India jumped 2% and China was stable. As of this writing France is up 3.54%.
Oil has been running spending most of the morning over $31.00 but is pulling back as of this writing.
The ratings agency, Moody, puts 120 energy firms around the world on a list for possible downward revision.
Dollar is getting stronger.
Money is coming out of yen, gold and bonds as a need for safe haven wanes.
Momo crowd keeps on aggressively buying silver. The reasoning appears to be proclamations by gurus about industrial demand for silver.
Investors need to be aware that there is a considerable overhead supply for both oil and stocks. Overhead supply for oil comes around $32. Overhead supply for stocks comes around 1909 in S&P 500.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1095, silver futures are at $14.15, and oil futures are $31.16.
S&P 500 resistance levels are 1900, 1909, and 1920; support levels are 1860, 1838, and 1800.
DJIA futures are up 196 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
DRAGHI COMES TO MARKETS’ RESCUE
This is what you need to know today.
ECB chief Draghi is coming to markets’ rescue. Stocks are responding positively to his statements. Here are the key points from his conference call.
- ECB will review its policy in March. Expectations were that the policy would be reviewed in June.
- Inflation is lower than expected.
- Risks to the economy are higher than expected.
- ECB has to act to maintain its credibility.
- ECB will go to any length to achieve its goals.
Dollar is surging on Draghi comments.
Surge in dollar is bring down gold, silver and oil.
Interest rates are range bound.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1096, silver futures are at $13.94, and oil futures are $28.10.
S&P 500 resistance levels are 1920, 1962, and 2000; support levels are 1838, 1800, and 1767.
DJIA futures are down 33 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
UGLY START BUT SENTIMENT APPROACHING EXTREME FROM WHERE RALLIES START, REDUCE CASH
This is what you need to know today.
Recently, we shared with you our expectation that rumors of more stimulus from China would start. That call proved spot on. Overnight when China did not provide stimulus, disappointment set in causing a worldwide selloff.
In early trading in the U. S., stocks are bouncing off their lows which were about 400 DJIA points down.
Negative sentiment is now approaching an extreme. Typically rallies start when sentiment approaches extreme. The reason is that by the time sentiment approaches extreme, most of the selling is out of the way and not many sellers are left. Even slight good news can cause rip roaring rallies.
Having said the foregoing, there are no guarantees in the markets. In our 30+ years in the markets, we have seen extreme negative sentiment become even more extreme. However this is rare.
For a rally to take hold, the following three conditions need to be met.
- Oil needs to stabilize. This may happen as negative sentiment on oil is also approaching an extreme.
- Currencies need to stabilize. Overnight Indian rupee broke support, Hong Kong dollar stumbled to great recession lows, and as of this writing Russian ruble is hitting all time low.
There is no sign of currencies stabilizing at this time. - The Fed has to convince the market that it is not going to raise rates in March. There are many rumors and opinions, but nothing authoritative on this subject at this time.
Gold, silver, and bonds are rising on safe haven demand.
Dollar and yen are range bound.
We are switching to March oil contract as it provides greater liquidity. This contract is trying to stabilize in the zone of $28.50 to $29. There is major support around $27.50.
Our very, very short-term early stock market indicator is negative but can quickly turn positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-42% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1099, silver futures are at $1410, and oil futures are $29.07.
S&P 500 resistance levels are 1860, 1920, and 1962; support levels are 1838, 1800, and 1767.
DJIA futures are down 250 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
MARKETS CELEBRATE CHINA GROWING THE SLOWEST SINCE 1990
This is what you need to know today.
The official number is in. China grew the slowest in 2015 since 1990.
The markets have been going down on fear of Chinese growth. Why would they celebrate confirmation of slower growth? On Wall Street, it is often “buy the rumor, sell the news.” In this case, sell the rumor buy the news.
Chinese GDP came at 6.9% vs. 6.9% consensus.
Oil is rallying along with Chinese stocks.
Money is coming out of bonds into stocks, interest rates are ticking up.
Investors are fleeing safety of yen into dollar. Yen is falling and dollar is rising.
There is selling in gold and silver as the need for safe haven wanes. However, expect rumors of more Chinese stimulus to take hold. Such rumors may drive gold higher.
Our very, very short-term early stock market indicator is positive.
What To Do Now?
It is important for investors to look ahead and not in the rear view mirror.
Consider only adding new positions per new posts since October 1st.
Consider continuing to hold existing positions. Based on individual risk preference, continue to hold 25-45% cash or hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.
Gold futures are at $1086, silver futures are at $14.06, and oil futures are $30.34.
S&P 500 resistance levels are 1962, 2000, and 2017; support levels are 1860, 1838, and 1800.
DJIA futures are up 186 points.
A Reminder
As our long time subscribers know well, that during the 2008 and early 2009 market crash, when stock market lost about 50%, subscribers to The Arora Report made money by the boat load. For long only investors, this remarkable performance was achieved by using inverse ETFs.
Our models do not expect a repeat of 2008. In the most likely worst case, there may be a garden variety bear market that typically occurred every 18 to 24 months prior to the recent six-year market run.
Individual Trades
Please click on Home on the left side of the Menu. Scroll down on the Home Page for individual trades.
Click on the Search by Symbol/Tag on the right hand side and click on the symbols of interest.
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