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 ‘Protection Bands and What To Do Now.’
JAPANESE BUYING MAY BE BEHIND THE MYSTERY THAT DROVE TECH STOCKS HIGHER
To gain an edge, this is what you need to know today.
Mystery Solved
Please click here for a chart of bond ETF (IEF).
Note the following:
- We have been sharing with you that tech stocks are inversely correlated to interest rates. In plain English, tech stocks go down when interest rates rise.
- Bonds go down when interest rates rise.
- The chart shows that bonds have risen.
- The chart shows that bonds have cut through the resistance zone like a hot knife through butter.
- The economic data that we have shared with you has been very strong.
- Bonds are supposed to go down on economic data.
- Here bonds went up on strong economic data. This is not supposed to happen. Why this happened was a mystery on Wall Street yesterday morning.
- It appears that strong buying in bonds came from Japan. The reason is that on a currency-hedged basis, the yields on U. S. bonds became very attractive for Japanese buyers relative to Japanese bonds.
- This is an example of how complex the markets are. For this reason, investors should bring more sophistication to their investing and stay away from simple-minded approaches that gurus advertise to entice investors.
Housing Starts
The housing market is still red hot. March Housing Starts came at 1.739M vs. 1.621M consensus.
Building Permits came at 1.766M vs. 1.750M consensus.
China GDP
The Chinese economy grew by 18.3% year on year. This is the strongest growth since China started record-keeping in 1992.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 (To see the locked content, please take a 30 day free trial) stocks in the early trade. Smart money is🔒.
Gold
The momo crowd is 🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
Markets
Our very, very short-term early stock market indicator is 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking up and bonds are ticking down.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $1781, silver futures are at $26.24, and oil futures are $63.62.
S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.
DJIA futures are up 82 points.
Protection Bands and What To Do Now?
It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold existing positions. Based on individual risk preference, on dips, consider holding 🔒 in cash or treasury bills or short-term bond funds or allocated to short-term tactical trades and short to medium-term hedges of 🔒 and short term hedges of 🔒. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, total cash level should be more than stated above but significantly less than cash plus hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
FREE MONEY LEADS TO BLOWOUT RETAIL SALES – MOMO EXCITED
To gain an edge, this is what you need to know today.
Dr. Copper
Please click here for a chart of copper futures (HG_F).
Note the following:
- Traditionally copper has been called Dr. Copper because during good economic times copper consumption went up.
- Now in addition to good economy copper consumption is going to go up with electric cars, solar, and other decarbonization projects.
- The move up in copper is creating bullishness in stock markets around the world after a research report that is projecting a huge increase in copper prices.
- The chart shows the strong trend line.
- The chart shows a strong move in copper much above the pre-COVID high.
- The chart shows that copper has moved decisively above 2018 high when the market was excited about copper.
Retail Sales
Biden’s free money is working. Consumers have been out shopping.
Retails Sales came at 9.8% vs. 5.3% consensus.
Retail Sales Ex-auto came at 8.4% vs. 4.9% consensus.
Jobless Claims
Jobless Claims came at 576K vs. 695K consensus. This indicates that the job picture is dramatically improving. This dramatic fall in jobless claims is striking especially in view of the anecdotal evidence that some people are trying their best to not get jobs because unemployment benefits are higher than what they were making pre-COVID. This number indicates that there is likely strong inflation in wages. This is important because the Fed’s and Biden’s premise is that there is no inflation and if inflation rises it will be temporary. Can you see employers decreasing wages next year after giving big raises this year? Herein lies the risk to investors from Powell and Biden policies.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 stocks in the early trade. Smart money is🔒.
Gold
The momo crowd is🔒 gold in the early trade. Smart money is🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
Markets
Our very, very short-term early stock market indicator is🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking down and bonds are ticking up.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $1748, silver futures are at $25.63, and oil futures are $62.77.
S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.
DJIA futures are up 145 points.
GIDDINESS OVER COINBASE SPILLING INTO THE MARKETS
To gain an edge, this is what you need to know today.
Giddiness
Please click here for a chart of bitcoin futures on CME (CME).
Note the following:
- Investors are downright giddy on the public listing of Coinbase (COIN) stock.
- Coinbase is an exchange that trades cryptocurrencies.
- The giddiness is significantly higher than what was seen when stocks like Intel (INTC), Microsoft (MSFT), Yahoo, Amazon (AMZN), and Google (GOOG) started trading.
- The chart shows the huge move over the last few months over bitcoin.
- The giddiness over COIN is directly related to the move in bitcoin.
- The move in bitcoin, in large part, is the result of massive money printing and borrowing. Investors are concerned about losing their wealth due to the potential debasement of the dollar. In older days, investors would have rushed into gold. Now investors are rushing into bitcoin.
- Investors have totally lost the concept of high risk in buying bitcoin or Coinbase stock.
- Bitcoin is hitting a new high.
- Giddiness over Coinbase is spilling into financial markets in general and momo stocks in particular.
- There is a new post in ZYX Buy on Coinbase.
Beige Book
The Fed’s Beige Book will be released at 2:00 pm ET. Sometimes Beige Book can move the markets. However today nobody is likely to care because of the excitement about COIN.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 stocks in the early trade. Smart money is 🔒.
Gold
The momo crowd is🔒. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
Markets
Our very, very short-term early stock market indicator is 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking up and bonds are ticking down.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $1743, silver futures are at $25.40, and oil futures are $61.20.
S&P 500 futures resistance levels are 4200, 4318, and 4400: support levels are 4000, 3950, and 3860.
DJIA futures are down 13 points.
LIQUIDITY AND CHINA DATA TRUMPS VACCINE SETBACK AND INFLATION
To gain an edge, this is what you need to know today.
Liquidity Trumps Vaccine Setback
Please click here for a chart of S&P 500 ETF (SPY) which represents the benchmark for the stock market index (SPX).
Note the following:
- CTC and FDA are recommending a pause in administering the JNJ vaccine due to six reports of severe blood clots. The six reports of blood clots are among women between the ages of 18 to 48. So far 6.8 million doses of the JNJ vaccine have been administered.
- The vaccine setback will slow the economy opening.
- The vaccine setback may also potentially allow variants to take hold.
- The chart shows the fall in the stock market on the vaccine news.
- The VUD indicator is the most sensitive measure of net supply demand in real-time. The orange represents net supply and the green represents net demand.
- The VUD indicator shows that the net supply of stocks was only mild compared to the severity of the news.
- The chart shows that VUD turned green after a brief period indicating net demand for stocks.
- The explanation for the stock market not falling by a significant amount is the liquidity. In plain English, this means that the Fed has created too much money. This excess money is floating around waiting to buy the slightest dips.
Inflation
CPI came at 0.6% vs. 0.5% consensus.
Core CPI came at 0.3% vs. 0.2% consensus.
China
Chinese exports jumped 30.6% in March year-over-year vs. consensus of 35%. Even though this is less than the consensus, it is very strong data indicating global growth.
Chinese imports rose 38.1% in March year-over-year vs. consensus of 23%. This indicates that the Chinese economy is strengthening faster than expected.
This strong data from China is helping the stock market this morning.
Bitcoin
Bitcoin hit a record of over $63,000 on excitement over Coinbase (COIN) going public. COIN is a cryptocurrency exchange. Please see the post on COIN in ZYX Buy. Since the post, the valuation in the private market has reached $147 billion. This is bigger than Nasdaq (NDAQ), New York Stock Exchange and Goldman Sachs (GS). Bulls are targeting $600 for COIN stock. Any additional posts on COIN stock will be in ZYX Buy.
Momo Crowd And Smart Money In Stocks
The momo crowd is 🔒 stocks in the early trade. Smart money is🔒.
Gold
The momo crowd is🔒 gold in the early trade. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
Markets
Our very, very short-term early stock market indicator is 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking down and bonds are ticking up.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $1738, silver futures are at $25.21, and oil futures are $60.22.
S&P 500 futures resistance levels are 4200, 4318 and 4400: support levels are 4000, 3950 and 3860.
DJIA futures are up/down 81 points.
A SLIGHT HESITATION AS NASDAQ AT RESISTANCE
To gain an edge, this is what you need to know today.
Hesitation At Resistance
Please click here for a chart of Nasdaq 100 ETF (QQQ).
Note the following:
- The chart shows that Nasdaq has rallied right to the resistance level.
- The chart shows that RSI is very overbought.
- The chart shows that the volume during the rally is relatively low.
- Nasdaq is experiencing a slight hesitation. Such hesitation is common when the foregoing three conditions are met.
- It is likely that there are stops of short sellers right above the resistance line shown on the chart.
- Expect bulls to attempt to take out the stops. When stops are taken out, it can result in an explosive up spike.
- On the other hand, do not expect short sellers to give up so easily. Expect short sellers to push the pedal right here because they can have close stops and RSI is overbought.
- The future direction, when it is all said and done will come down to interest rates and earnings commentary.
Momo Crowd And Smart Money In Stocks
The momo crowd is🔒. Smart money is🔒.
Gold
The momo crowd is🔒. Smart money is 🔒.
For longer-term, please see gold and silver ratings.
Oil
The momo crowd is 🔒 oil in the early trade. Smart money is 🔒.
For longer-term, please see oil ratings.
Markets
Our very, very short-term early stock market indicator is 🔒. This indicator, with a great track record, is popular among long term investors to stay in tune with the market and among short term traders to independently undertake quick trades.
Interest rates are ticking up and bonds are ticking down.
The dollar is weaker.
Trading futures is not recommended for most investors. The purpose of providing this information is to give an indication of the premarket activity that usually guides the activity when the market opens.
Gold futures are at $1739, silver futures are at $25.19, and oil futures are $60.12.
S&P 500 futures resistance levels are 4200, 4318 and 4400: support levels are 4000, 3950 and 3860.
DJIA futures are down 52 points.
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