(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
GOLD AND OIL SLAMMED BY SMART MONEY ON HOTTER INFLATION DATA
Core Consumer Price Index (CPI) came a 0.3% vs. 0.2% consensus.
Smart Money slammed gold, silver and oil on the foregoing data. The concept being that if inflation is running hotter, the Fed will be forced to raise rates sooner rather than later. If rates rise, dollar will become stronger. Since gold, silver and oil are priced in dollars, stronger dollar will mean weaker commodities.
Interest rates have slightly risen and are responding very differently to the data than the commodities.
Stock market continues to meet resistance around S&P 500 2132.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1203, silver futures are at $17.01, and oil futures are $59.51.
S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2111, 2100, and 2063.
DJIA futures are down 25 points.
FED HAS RECOVERY DOUBTS, EUROPE AND CHINA PMIS DISAPPOINT
FOMC minutes show that Fed has doubts about the strength of the recovery, a rate increase in June is now highly unlikely.
China manufacturing activity declined for the third month in a row. HSBC PMI fell to 49.1 vs. consensus of 49.3.
In Germany, Market May activity fell to a five month low of 52.8 vs. consensus of 53. Overall Eurozone PMI fell to 53.4 vs. 54. consensus.
The momo crowd is aggressively buying oil, gold and silver.
Interest rates are ticking up.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1201, silver futures are at $17.03, and oil futures are $59.78.
S&P 500 resistance levels are 2150 and 2200; support levels are 2100, 2063, and 2038.
DJIA futures are down 6 points.
CAUTION AHEAD OF FED MINUTES, JAPAN HITS 15 YEAR HIGH
There is an air of caution ahead of Fed minutes that will be released later today with the exception of the momo crowd aggressively buying gold and silver ahead of the Fed.
NIKKEI hit a fresh 15 year high after first quarter GDP data came out better than the consensus.
Oil and interest rates are range bound. Oil inventories will be released at 10:30 am ET.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1209, silver futures are at $17.18, and oil futures are $58.69.
S&P 500 resistance levels are 2150 and 2200; support levels are 2100, 2063, and 2038.
DJIA futures are up 15 points.
ECB AND HOUSING STARTS JOLT THE MARKETS; SMART MONEY SLAMS GOLD, SILVER AND OIL
Lately, yield on German bunds has been rising. The rise in yield resulted in a rise in euro.
Christian Noyer, an ECB official, reminded the markets that ECB is ready to go beyond its already announced stimulus to meet its targets. Investors sold euro and bought bunds on the reminder that ECB means business.
In the U. S. Housing Starts added another jolt to the markets. April Housing Starts came at 1135K vs. 1019K consensus. Building permits are a leading indicator and have a heavy weight in our models; Building Permits came at 1143K vs. 1065K consensus.
Interest rates are jumping.
Smart Money aggressively sold gold over $1222, silver over $17.60 and oil over $60.30.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1213, silver futures are at $17.40, and oil futures are $59.01.
S&P 500 resistance levels are 2150 and 2200; support levels are 2122, 2100, and 2063.
DJIA futures are up 32 points.
CHINESE AGGRESSIVELY BUY GOLD AND SILVER AS HOME PRICES FALL
The new home prices in China fell for the eighth month in a row. The average price of a home in China’s major cities is now 6.1% below from a year ago.
There is a lot of money in China. With the real estate prices falling and the red-hot stock market beginning to cool, it appears that money in China has rotated to precious metals.
Oil trading has been very volatile. On the bear side are fundamentalists who are looking at supply demand imbalance. On the bull side is the momo crowd buying because oil is going up.
Trading in bonds has also been very volatile.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1227, silver futures are at $17.70, and oil futures are $60.86.
S&P 500 resistance levels are 2122, 2150, and 2200; support levels are 2100, 2063, and 2038.
DJIA futures are down 12 points.
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