(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
A CLEAR-EYED TAKE ON GOLD ROCKETING AND STOCKS SWOONING ON WEEKEND CRIMEA REFERENDUM JITTERS
March 14, 2014
Crimea, a region of Ukraine, will hold a referendum this weekend to join Russia.
Gold is rocketing, stocks are swooning and bonds are rising on jitters.
Lets take a clear-eyed look at the situation. The following are known:
1. The referendum will go in Russia’s favor
2. Russia will come up with some face-saving avenues for the West
3. The West will come up with some face-saving avenue for Russia
4. After much saber rattling, it will be business as usual
5. There is no appetites in the U. S. to take on Russia militarily.
For the foregoing reasons, there will be an opportunity to short bonds, buy stocks, and short gold.
Gold futures are at $1385, silver futures are at $21.75, and oil futures are $98.81.
S&P 500 resistance levels are 1850, 1875, and 1900; support levels are 1837, 1825, and 1800.
DJIA futures are down 31 points.
POSITIVE ECONOMIC DATA IN THE U. S.
March, 13, 2014
February retail sales, ex-auto came at 0.3% vs. 0.2% consensus. Initial unemployment claims came at 315K vs. 329K consensus.
Yesterday, with dim data from international markets, bulls in the U. S. were buying, speculating that the economic data to be released in the U. S. this morning would be positive. Bulls were right.
Gold is falling as it should under the economic news.
Oil continues to fall.
Interest rates are slightly lower.
Gold futures are at $1367, silver futures are at $21.18, and oil futures are $98.06.
S&P 500 resistance levels are 1875, 1900, and 1925; support levels are 1850, 1835, and 1825.
DJIA futures are up 38 points.
CHINESE ECONOMY CASTS A DARK SHADOW, COPPER FUTURES FALL BY DAILY LIMIT
March 12, 2014
Concerns about Chinese economy are again spooking the markets. Copper which is often seen as a barometer of Chinese economy fell in the futures market by the daily limit.
Oil is also falling on Chinese concerns.
Gold is spiking as a hedge against fragility in markets.
In early trading in the U. S., stocks are trading only slightly lower and dip buyers are active. However, internationally the situation is different.
Shanghai Composite falls below the key 2,000 mark. Hong Kong’s Hang Seng falls 1.7%, Japan’s Nikkei falls 2.6%, Britain’s FTSE falls 1.1%, Germany’s DAX falls 1.4% and French CAC falls by 1.5%
Gold futures are at $1364, silver futures are at $21.10, and oil futures are $98.25.
S&P 500 resistance levels are 1875, 1900, and 1925; support levels are 1850, 1835, and 1825.
DJIA futures are up/down 54 points.
LOTS OF FROTH BUT SENTIMENT AND ECONOMIC INDICATORS NOT AT LEVELS SEEN NEAR TOPS
March 11, 2014
There is lots of froth in this market. Many of our indicators are at levels typically seen at tops. However the two most important indicators, sentiment and economic are not even close to what is typically seen near tops.
There is absolutely no way to forecast the market with absolute certainty. Having said that, based on extensive back testing of historical data, most likely scenario is high volatility.
Overnight gold is shooting up and is finding some selling at $1350 level.
Chinese market has stabilized.
European markets are mixed.
Interest rates and oil are range bound.
Gold futures are at $1348, silver futures are at $21.06, and oil futures are $101.34.
S&P 500 resistance levels are 1900 and 1925; support levels are 1850, 1835, and 1825.
DJIA futures are down 5 points.
CHINA DATA SPOOKS THE MARKETS
March 10, 2014
Over night Shanghai Composite fell about 3% at its low. Asian markets were spooked by trade data from China. Exports in February from China fell 18.5% year over year. China reported a trade deficit of $23 billion for the month.
European markets are taking the slide in Asia in stride. The analysis is that China trade was adversely affected by the long New Year holidays. In our analysis, New Year holidays alone do not explain the big drop. Therefore an extra degree of caution is warranted over the coming days.
Gold is recovering from its earlier losses.
Oil is falling.
Interest rates are mostly unchanged.
Gold futures are at $1338, silver futures are at $21.01, and oil futures are $101.24.
S&P 500 resistance levels are 1900 and 1925; support levels are 1850, 1837, and 1825.
DJIA futures are down 39 points.
