Yesterday the stock market threw a tantrum.  The tantrum was not unexpected.  The economic data showed that economies in both the U. S. and Europe are getting better. The markets are addicted to bad economies and monetary easing by the central banks.

At some point, there has to be the start of a transition for the markets to move based on economic realities and not on central bank shenanigans.

The transition will provide great opportunities on both long and short sides.

Interest rates are hanging near their highs.

Short squeeze in oil is in full bloom.

Smart Money has continued to sell gold.

Our very, very short-term early stock market indicator is positive.

Gold futures are at $1172, silver futures are at $16.06, and oil futures are $59.04.

S&P 500 resistance levels are 2100, 2122, and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are up 83 points.

The Fed predicts that growth will rebound and Q1 economic weakness is transient.  Fed’s analysis is in line with our analysis that we have been sharing with you including yesterday’s morning capsule.

Economic data released this morning is somewhat positive.

Initial Unemployment Claims came at 262K vs. 290K  consensus; Continuing Claims 2.253 mln vs. 2.318 mln  consensus; Q1 Employment Cost Index +0.7% vs +0.6% consensus;  March PCE Prices- Core M/M +0.1% vs +0.2%  consensus; Initial Claims 262K vs 290K  consensus;  March Personal Spending +0.4% M/M vs +0.5% consensus; March Personal Income 0.0% M/M vs +0.2% consensus.

Smart Money aggressively sold gold and silver as the momo crowd was aggressively buying.

Oil is range bound.

Interest rates are rising.

Our very, very short-term early stock market indicator is negative.

Gold futures are at $1198, silver futures are at $16.57, and oil futures are $59.11.

S&P 500 resistance levels are 2122 and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are down 23 points.

Q1 GDP-Advanced came at 0.2% vs. 1.0% consensus; Q1 Chain Deflator came at -0.1% vs. +0.5% consensus.

The three main factors behind GDP weakness are, bad weather, dollar strength and weakness in energy.  Bad weather is transient; dollar has become weaker over the last two weeks.  In our analysis, energy weakness is likely to continue.

The Fed will announce result of its meeting at 2:00 pm ET today.  Subscribers may consider being extra alert.

Paradoxically interest rates are spiking, normally on weak economic data interest rates fall.

The surge in gold after release of weak economic data was met with selling by Smart Money.

Oil is range bound but will trade on rumors regarding API inventory data to be released at 4:30 pm ET.  The ship seized by Iran is a Danish cargo ship with no military implications.

Our very, very short-term early stock market indicator is negative.

Gold futures are at $1210, silver futures are at $16.61, and oil futures are $56.82.

S&P 500 resistance levels are 2122 and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are down 97 points.

U. K. AND CHINA DATA EXERTS DOWNWARD PRESSURE

The U. S. stock market is breaking out.  Is this breakout real?  There is pivotal data this week from Federal Reserve meeting, earnings, and GDP release; how the market reacts to the foregoing will provide the information necessary to gage the validity of this breakout. Even if the breakout turns out to be real, it is important to note that in our analysis U. S. stocks are overvalued and there is significant risk in emerging markets.  China is in a bubble.  However there are opportunities in Europe and Japan.  Of course, there are always opportunities in individual stocks.

Both gold and oil are rallying.

Interest rates are range bound.

Our very, very short-term early stock market indicator is positive.

Gold futures are at $1186, silver futures are at $15.92, and oil futures are $57.43.

S&P 500 resistance levels are  2122 and 2150; support levels are 2100, 2063, and 2038.

DJIA futures are up 69 points.