(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
BEST WEEK FOR JAPAN AND WORST FOR CHINA, EURO DOLLAR OPTION EXPIRATION, AND RECORD OIL PRODUCTION
In quite a contrast, this week has been the best for Japan with 11 straight up days since 1988 and the worst week for China since 2009.
Eurodollar options are expiring today. There is a huge open interest at 1.10 strike and also at 1.095 strike. As of this writing eurodollar is trading at 1.0978. It appears that a big battle is going on between dealers who like to pin it at 1.1 and the dealers who would like to pin it at 1.095. Gyrations are causing huge volatility in other markets especially in the oil market.
Until early this morning, it appeared that 1.095 crowd would be the winner. Then came German retail sales at 1.7% vs. 1.0% consensus and Spain CPI at 0.4% vs. 0.2% consensus. This set of data weakened the dollar causing more fuel for oil to spike up. Oil reversed after U. S. GDP came at -0.7% vs. -0.8% consensus.
Gold and silver seem to be prisoner to eurodollar expiration.
Interest rates are slightly lower.
Our very, very short-term early stock market indicator is negative. Today is the last trading day of the month, this may cause more than the usual shenanigans in the markets.
Gold futures are at $1188, silver futures are at $16.71, and oil futures are $58.34.
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2111, 2100, and 2063.
DJIA futures are down 41 points.
CHINA STOCKS PLUNG 6%, NO OIL PRODUCTION CUT FROM SAUDIS
All bubbles are ultimately pricked. Overnight stocks in China fell over 6%. Only time will tell if the China bubble has been pricked.
Initial Unemployment Claims came at 282K vs. 276K consensus. The difference from the consensus is not meaningful. However, the momo crowd latched on to the news and has been aggressively buying gold and silver.
A Saudi paper that we have in the past found to be authoritative claims that Saudi is nowhere near a production cut. The momo crowd seems to be oblivious to the negative realities of oil and continues to aggressively buy oil. In our analysis buying oil here is misplaced. As a full disclosure, we are short oil.
Interest rates are range bound.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1186, silver futures are at $16.70, and oil futures are $57.34.
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2111, 2100, and 2063.
DJIA futures are down 65 points.
DOLLAR STRENGTHENS, OIL FALLS AND STOCKS STEADY
The dollar has significantly strengthened against both yen and euro even though interest rates are falling. Normally falling interest rates lead to falling dollar.
There was aggressive buying of oil in Asia but starting early this morning American Smart Money has been aggressively selling oil.
Smart Money continues to lightly sell gold and silver while the momo crowd continues to aggressively buy gold and silver.
After yesterday’s fall, stocks are steady.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1185, silver futures are at $16.66, and oil futures are $57.61.
S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2100, 2063, and 2038.
DJIA futures are up 20 points.
LEFTIST WINS IN SPAIN, STRONG DURABLE GOODS ORDERS AND GOLD SLAMMED
In local elections in Spain, anti-austerity leftist candidates from small upstart parties showed an impressive performance. Is Spain about to go the way of Greece?
In the U. S., Durable Goods ex-trans came at 0.5% vs. 0.3% consensus. The strong number has helped the dollar get stronger. In turn Smart Money heavily sold gold and silver.
Oil has fallen below $59.
Interest rates are attempting to edge up.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1187, silver futures are at $16.69, and oil futures are $58.94.
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2111, 2100, and 2063.
DJIA futures are down 43 points.
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