WEEKLY MARKET DATA: DEPARTURE FROM RECENT TRADING PATTERN OF GOLD AND SILVER $SPY $GLD $SLV $DIA $GE $MCD

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

FOUR DJIA COMPONENTS REPORT BELOW EXPECTATIONS

October 19, 2012

Three  DJIA components MSFT, GE and MCD report lower than expected earnings or projections. Market seems to be surprised but this is not a surprise to us.  Our models have been anticipating lower earnings.

Any market downturn will be an opportunity as it will allow us to accumulate long positions at cheaper prices and take profits on current short positions.

Gold futures are at $1738, silver futures are at $32.59, and oil futures are $92.89.

S&P 500 resistance levels are 1450, 1465, and 1472; support levels are 1444, 1439, and 1424.

DJIA futures are down 39 points.

DEPARTURE FROM RECENT TRADING PATTERN OF GOLD AND SILVER

October 18, 2012

Last night China reported eagerly awaited GDP data.  Gold and silver momo crowd has been gunning for this number to buy aggressively. The number came at 7.4% as expected.  The American momo crowd started buying aggressively.  The buying was not supported by Chinese buyers.  It is not a surprise that the American momo crowd thinks they know more about China than the Chinese.

Smart Money stepped in to sell, perhaps after watching that Chinese were not buying gold or silver.  The result is that instead of going up strongly as expected on Chinese data, gold is down by over $10 as of this writing.

Gold futures are at $1742, silver futures are at $32.83, and oil futures are $90.88.

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S&P 500 resistance levels are 1465, 1472, and 1480; support levels are 1450, 1444, and 1439.

DJIA futures are down 17 points.

SPANISH AND ITALIAN BONDS SURGE, GOLD GOES UP

October 17, 2012

Moody’s surprised investors by keeping Spain’s credit rating at investment grade.  Spain’s bonds surged; two-year yield dropped 30 basis points to 2.83%.  10 year Spanish bond yields  have now dropped more than 2% from their record high yield of 7.75% reached on July 25th.

Italian bonds rose in sympathy; two-year yields fell by 14 basis points to 1.98%.

The foregoing has positive implications for several of our long positions and also provides opportunities for those not in these positions to initiate new positions.   More on this later.

The momo crowd started aggressively buying gold and silver as good news from Spain emerged.  The momo crowd continues its bizarre behavior of buying gold and silver on good news, whereas gold and silver are traditionally a hedge against bad news.

Gold futures are at $1747, silver futures are at $32.99, and oil futures are $92.45.

S&P 500 resistance levels are 1465, 1472, and 1480; support levels are 1444, 1439, and 1424.

DJIA futures are up 15 points.

CPI SHOWED INFLATION UNDER CONTROL

October 16, 2012

CPI released this morning shows that core inflation is under control, at least for the time being.  Core CPI rose 0.1% vs. 0.2% consensus.

As we have written previously, Core PPI is a leading indicator that is more useful than Core CPI which lags.

The bulls will attempt to extend yesterdays upside momentum, at least in the early morning.

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Gold futures are at $1742, silver futures are at $32.88, and oil futures are $91.71.

S&P 500 resistance levels are 1444, 1450, and 1465; support levels are 1439, 1424, and 1415.

DJIA futures are up 57 points.

RETAIL SALES BETTER THAN EXPECTATIONS

October 15, 2012

September retail sales ex-auto came at 1.1% vs 0.6% consensus. American consumer is strong.

Export data from China also shows that exports from China to the United States has gone up. This also indicates strength in the American economy.

However significant risk continues in the stock market due to over bought condition in the medium-term, uncertainty of elections, and the fiscal cliff.

Gold futures are at $1744, silver futures are at $33.16, and oil futures are $91.52.

S&P 500 resistance levels are 1439, 1444, and 1450; support levels are 1424, 1415, and 1410.

DJIA futures are up 40 points.

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