(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
AMERICA’S GOLDEN BOY STUMBLES
May 11, 2012
The CEO of JP Morgan, Jamie Dimon, has long been known not only as America’s golden boy, but also the most esteemed CEO in the world of banking. He had the reputation of being the best risk manager in the world.
Yesterday after the market close JPM reported a sizable loss from a derivative hedge trade. Dimon calls the loss egregious and self-inflicted.
Financial markets are shocked and risk aversion is the fashion of the day.
Risk rises and gold stumbles. Weak leveraged investors in gold and silver continue to be slaughtered.
Gold futures are at $1581, silver futures are at $29.65, and oil futures are $95.67.
S&P 500 resistance levels are 1348, 1358, and 1368; support levels are 1339, 1330, and 1324.
DJIA futures are down 92 points.
THE WORLD DOES NOT END AS SPAIN TAKES STAKE IN BANKIA
May 10, 2012
Part of the market weakness over the last few days has been driven by the deteriorating condition of Bankia, a large bank in Spain. There have been concerns that Spanish government bond yield would shot up if Spanish government came to the rescue of Bankia.
Spain is converting state aid worth $4.5 billion into 45% of outstanding ordinary shares. Yields in Spain have not shot up. The stock market in Spain is up very strongly.
Gold is bouncing from a very over sold short-term condition.
Weakly jobless claims in the U.S. were about as expected. Market seems to be relieved that there is no deterioration.
Gold futures are at $1598, silver futures are at $29.25, and oil futures are $97.37.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1348, and 1339.
DJIA futures are up 58 points.
CRISIS DEEPENS, GOLD PLUNGES
May 9, 2012
Crisis in Europe deepens as the yield of 10 year Spanish bonds reaches 6.03%. 6% is considered the danger mark.
As the crisis deepens, gold plunges through yesterdays low of $1597.25.
We have been telling you that there was a 65% probability of a correction to the zone of 1299 to 1311 in the S&P 500. We have also been stating that there was a 75% probability of S&P 500 hitting 1330 to 1344 zone. Now S&P 500 is on top of the support zone.
The question is, “Will 1330 – 1344 hold?” The answer lies in how the media reports communication between Germany’s Merkel and France’s Hollande.
Gold futures are at $1582, silver futures are at $28.73, and oil futures are $95.96.
S&P 500 resistance levels are 1358, 1368, and 1380; support levels are 1339, 1330, and 1324.
DJIA futures are down 90 points.
GOLD AND SILVER PLUNGE THROUGH SUPPORTS
May 8, 2012
Gold plunges through previously strong support at $1625 and silver plunges through previously strong support at $30. The plunge was caused by a statement attributed to Greece’s Syriza leader Tsipras. Tsipras wants to nullify the bailout agreement.
The statement from Greece is bad news and deepens the crisis. The violent down spike in gold and silver on the statement demonstrates what we have been telling you all along — gold and silver are in the hands of momo crowd who buys on good news and sells on bad news. This is contrary to the traditional role of gold and silver to act as a hedge against bad news.
Gold futures are at $1616, silver futures are at $29.43, and oil futures are $96.92.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1348, and 1339.
DJIA futures are down 50 points.
SOCIALIST WINS IN FRANCE, PRO EUROPE PARTIES COLLAPSE IN GREECE
May 7, 2012
France has a socialist president. In Greece pro Europe parties were trounced in the elections.
political uncertainty in Europe caused euro to trade as low at $1.2964, but now has recovered to $1.3037. $1.30 is the battle line.
Last night DJIA futures were down over 150 points. but have recovered this morning.
Of note, is that gold and silver are falling slightly on uncertainty in Europe.
Gold futures are at $1639, silver futures are at $30.20, and oil futures are $98.68.
S&P 500 resistance levels are 1368, 1380, and 1400; support levels are 1358, 1348, and 1339.
DJIA futures are down 31 points.
