(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
THE DISUNITED STATES OF AMERICA
December 28, 2012
The dysfunction in Washington is in full display. A few days ago we told you that market observers were expecting the fiscal cliff to be resolved but Washington insiders were pessimistic.
Obama and congressional leaders are set to meet today. Expect the markets to move sharply based on the news and rumors regarding the fiscal cliff.
Here is the most important point, ultimately the fiscal cliff will be resolved. There will be lots of opportunities both on the long side and the short side. We simply need to be patient, keep some powder dry, and not be lulled into high risk trades. Further, this situation will also provide opportunities for long-term conservative investors.
Gold futures are at $1662, silver futures are at $30.13, and oil futures are $91.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1400, 1380, and 1368.
DJIA futures are down 66 points.
THE U.S. TO HIT DEBT CEILING ON DECEMBER 31
December 27, 2012
The U. S. will hit its borrowing limit on December 31. The Treasury secretary has announced that the U. S. will take extraordinary measures such as delaying payments to deal with the situation. It is widely believed that the Treasury can maneuver for a couple of months.
The debt limit will add further drama to the looming fiscal cliff.
Both sides seem to be working on a smaller budget deal. However a small deal may raise alarm among rating agencies.
Gold futures are at $1656, silver futures are at $29.98, and oil futures are $91.37.
S&P 500 resistance levels are 1424, 1439, and 1444; support levels are 1410, 1400, and 1380.
DJIA futures are up 11 points.
OBAMA CUTS HIS VACATION SHORT, GOLD MOMO CROWD STARTS BUYING AGGRESSIVELY ON THE NEWS
December 26, 2012
Obama has cut his vacation to Hawaii short and is reportedly on his way to Washington. The stock market is encouraged.
Gold and silver momo crowd started buying aggressively on the news. This is consistent with gold and silver momo crowd’s pattern of buying on potential good news; this is against the traditional behavior of astute investors who buy gold on bad news as a hedge.
No matter what the ultimate resolution of the fiscal cliff is, it will mean less growth in budget deficit and consequently less money printing than expected.
Fundamentally, a resolution of the fiscal cliff is negative for gold and silver. If the momo crowd runs it up on the news, it will be a selling opportunity.
Gold futures are at $1663, silver futures are at $30.04, and oil futures are $90.09.
S&P 500 resistance levels are 1424, 1439, and 1444; support levels are 1415, 1410, and 1400.
DJIA futures are up 23 points.