(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)

UNEMPLOYMENT UNEXPECTEDLY RISES, BUT STOCKS RUN ANYWAY TOWARDS DJIA 14000

February 1, 2013

In the U. S., unemployment rate unexpectedly rose to 7.9% vs. 7.7% expectations.  Nonfarm Private Payrolls came at 166K much lower than the consensus of 193K.

Stock futures first dipped on bad data but then started running up anyways, and as of this writing are up 116 DJIA points.  It is worth remembering that today is the first day of the month when lots of new money pours into the markets.  Money managers appear to be buying futures in anticipation of the new money coming in.

Gold futures are at $1672, silver futures are at $31.85, and oil futures are $97.44.

S&P 500 resistance levels are 1513, 1530, and 1537; support levels are 1480, 1474, and 1465.

DJIA futures are up 116 points.

STRONG RISE IN PERSONAL INCOME, INFLATION FALLS

January 31, 2013

In the United States, personal income in December rose 2.6% vs. 0.7% consensus; Core PCE prices which is one of our favorite indicators of inflation trends, came at 0.0% vs. 0.1% consensus.

Initial jobless claims, a leading indicator with very heavy weight in our models, came at 368K vs. 345K consensus.

Stock market continues to be overbought.  Those interested in generating wealth over a period of time by producing high risk adjusted returns may consider a cautious attitude towards the market until there is a pull back or a decisive breakout.  The point is that while many investors are partying on Wall Street, in the middle of euphoria, astute investors should exercise caution.

Gold futures are at $1669, silver futures are at $31.90, and oil futures are $97.16.

S&P 500 resistance levels are 1500, 1513, and 1530; support levels are 1480, 1474, and 1465.

DJIA futures are up 3 points.

GOLD SPIKES ON SHOCKING FALL IN GDP

January 30, 2013

The U. S. Q4 GDP showed a shocking contraction in the economy for the first time since 2009 against expectations of 1% increase.  Gold spiked right after the GDP release.  The reasoning is that if the economy is weaker than believed, the Federal Reserve is more likely to continue its bond buying program.  Some believe that the bond buying program to be inflationary.  

Interestingly, not much buying has been seen by the momo crowd.  Most of the buying has been by Smart Money which appears to be covering short positions initiated only a couple of days ago.

At this time, it is difficult to tell if gold can sustain upward momentum after the short covering exhausts itself.

This afternoon the Federal Reserve will announce results of its two-day meeting.  Please stay tuned in the afternoon in case opportunities arise from the Fed decision.

Gold futures are at $1675, silver futures are at $31.78, and oil futures are $97.77.

S&P 500 resistance levels are 1513, 1530, and 1537; support levels are 1480, 1474, and 1465.

DJIA futures are down 15 points.

INDIA CUTS INTEREST RATE, CHINA RUMORED CLOSE TO CUTTING INTEREST RATE

January 29, 2013

India cut a key interest rate to 7.75% for the first time in nine months.  The move is expected to help the Ruling Congress Party.

China is rumored close to cutting interest rates.

However in the United States yields on treasury bonds are rising.

The stock market continues to be overbought and caution is warranted.

Gold futures are at $1661, silver futures are at $31.10, and oil futures are $97.18.

S&P 500 resistance levels are 1500, 1513, and 1530; support levels are 1480, 1474, and 1465.

DJIA futures are down 19 points.

 

DURABLE GOODS ORDERS RISE

January 28, 2013

The U. S. Durable Goods Orders ex-transport rose 1.3% this indicates that the private sector is beginning to invest.

The stock market continues to be very overbought and caution is warranted.

Gold futures are at $1651, silver futures are at $31.03, and oil futures are $96.58.

S&P 500 resistance levels are 1500, 1513, and 1530; support levels are 1480, 1474, and 1465.

DJIA futures are up 34 points.

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