(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
BLOWOUT EMPLOYMENT NUMBERS
March 8, 2013
This morning the U. S. Department of Labor reported blowout non-farm private payrolls at 246K vs consensus of 175K. Unemployment rate fell to 7.7%, the lowest rate since December 2008.
The big question is how the stock market will react to this number. The straight forward answer to this question would seem to be that the number is good so the market should continue its momentum upwards. For the momo crowd 1565 on S&P 500 is like a magnet. As of this writing S&P Futures are at 1550.
Having said the foregoing, the markets are perverse. Often it is ‘buy the rumor and sell the news.’ We would have predicted with great confidence that this scenario will unfold if it was not for the fact that the employment number is higher than even the whisper numbers. Whisper numbers were around 210K.
What we expect now is a battle between the momo crowd on the buy side and astute investors booking profits on the sell side. There is no telling who is going to win.
Gold futures are at $1563, silver futures are at $28.42, and oil futures are $91.28.
S&P 500 resistance levels are 1558, 1570, and 1575; support levels are 1537, 1530, and 1517.
DJIA futures are up 83 points.
ECB AND BOE LEAVE INTEREST RATES UNCHANGED
March 7, 2013
Both the Bank of England and the European Central Bank leave interest rates unchanged.
The Bank of Japan rejects calls for immediate open-ended asset purchases.
In the United States, weekly initial claims cam at 340K vs. 350K.
Stock market is very overbought. Buying here is a high risk proposition. Most investors may consider exercising discipline and refrain from aggressive buying until there is a pull back. At this high level, there will be many opportunities on the short side if the momentum continues.
Gold futures are at $1583, silver futures are at $28.98, and oil futures are $91.27.
S&P 500 resistance levels are 1550, 1558, and 1570; support levels are 1537, 1530, and 1517.
DJIA futures are up 22 points.
EUPHORIA BUILDS
March 5, 2013
Yesterday the morning capsule was titled ‘EUPHORIA POTENTIALLY EXPLODING INTO MELT UP.’ This morning the euphoria continues to build.
S&P 500 faces stiff resistance in the zone of $1545 to $1570.
Our 30 years of experience in the markets have taught us to be cautious when others are euphoric. Unless this time is different, we will continue to be cautious, engage in select buying or shorting, engage in select profit taking, and keep powder dry for better opportunities.
ADP Employment data this morning was better than expected; employment change 198K vs. 150K.
Friday will be a big day in terms of data that everyone follows; Department of Labor will release February employment data.
Gold futures are at $1574, silver futures are at $28.70, and oil futures are $90.50.
S&P 500 resistance levels are 1550, 1558, and 1570; support levels are 1537, 1530, and 1517.
DJIA futures are up 54 points.
EUPHORIA POTENTIALLY EXPLODING INTO MELT UP
March 5, 2013
This morning there are signs of euphoria potentially exploding into a melt up. Euphoria is not caused by any unexpected economic news or better earnings or rising corporate profit margins or rising demand or any new monetary policy or any new geopolitical development or any new technological development (these are the factors that are responsible for long-term rise in the stock market).
The euphoria is being caused by the momo crowd that is buying aggressively this morning because the market is going up.
Gold futures are at $1580, silver futures are at $29.02, and oil futures are $90.40.
S&P 500 resistance levels are 1537, 1550, and 1558; support levels are 1517, 1500, and 1480.
DJIA futures are up 54 points.
CHINA MOVES TO CURB PROPERTY BUBBLE
March 4, 2013
We have previously written that one reason for caution is the property bubble in China. The property bubble in China is roughly at the same stage as it was in the U. S. prior to the crash.
Unlike the U. S. government at that time, the Chinese government is taking steps to curb the bubble. China has announced regulations for higher mortgage rates, higher down payments, and enforcement of capital gains tax collection on real estate transactions.
Nothing seems to have bothered the U. S. stock market including sequestration, but this morning the market seems to be taking notice of the property situation in China.
The plan continues to be a cautious stance, only select buying and keeping powder dry for better opportunities.
Gold futures are at $1577, silver futures are at $28.60, and oil futures are $90.62.
S&P 500 resistance levels are 1517, 1530, and 1537; support levels are 1500, 1480, and 1474.
DJIA futures are down 36 points.
