This post was just published on ZYX Buy Change Alert.
February Retail Sales ex-auto were 1.0% vs. consensus of 0.5%. In our models we exclude autos because autos are very volatile and distort the results.
This is indeed good news and proves the skeptics on the American consumer wrong. Due to the rise in the payroll tax, even astute market watchers were concerned that the consumer would pull back. The numbers prove the old adage once again, ‘never bet against the American consumer.’
Gold futures were up to $1595-$1596 right before the Retail Sales number came out. Within milliseconds of the release of the good number, Smart Money was seen selling gold. Gold was sold down to $1589, then the momo crowd stepped in to buy and the momo crowd is trying to run up gold again as of this writing.
The presumption behind Smart Money selling was that the momo crowd would consider good retail numbers as bad news for gold because it lessens the need for QE.
In our experience, the momo crowd is very unpredictable and does a very poor job of analysis. Since gold and silver remain under the control of the momo crowd and the momo crowd is unpredictable there is a high risk in precious metals. At this time they are suitable for traders but not for investors. Please keep in mind that the situation can change rapidly and there will come a time when it will make sense to start nibbling on gold and silver for long-term investment.
Gold futures are at $1595, silver futures are at $29.07, and oil futures are $92.90.
S&P 500 resistance levels are 1558, 1570, and 1575; support levels are 1550, 1537, and 1530.
DJIA futures are up 1 point.
