WEEKLY MARKET DIGEST: GREEK EXIT ON THE TABLE, KURODA UPSETS THE APPLE CART, 100 DAY MOVING AVERAGE CHASE $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

WEEKLY MARKET DIGEST: GREEK EXIT ON THE TABLE, KURODA UPSETS THE APPLE CART, 100 DAY MA CHASE $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. ) 

GREEK DEFAULT ON THE TABLE AS IMF WALKS OUT, PERIPHERY YIELDS RISING

A Greek default is officially on the table as IMF walks out of negotiations.

Yields in periphery are rising; German 10 year bund is at 0.88%, Spain 10 year bono is at 2.21%, and Portugal 10 year note is at 2.96%.  Greek 10 year note is now at 11.29%.

the momo crowd continues to aggressively buy commodities including gold, silver, copper and oil.  However, Smart Money is selling commodities this morning.

May Core PPI came at 0.1% vs. 0.1% consensus.  Core PPI is an important part of our models as producer prices often precede consumer inflation.

Our very, very short-term early stock market indicator is negative, please note that it is Friday and Fridays often lead to short squeezes because shorts generally do not like to take heavy short positions into the weekend.  If a short squeeze develops, it has potential to be vicious on the upside.

Gold futures are at $1177, silver futures are at $15.83, and oil futures are $60.02.

S&P 500 resistance levels are 2111, 2132, and ; support levels are 2063, 2038, and 2017.

DJIA futures down 71 points.

ROBUST RETAIL SALES, CHASE BY 100 DAY MOVING AVERAGE SELLERS

May Retail Sales ex-auto came at 1% vs. 0.7% consensus.  This indicates that the U. S. consumer is doing well.  Retail sales carry heavy weight in our models because the U. S. economy is 70% based on consumer spending.

Most of yesterday’s big stock market rally was chase by technical investors who had just sold or short sold because S&P 500 had fallen below the 100 day moving average.  This is a perfect illustration of the folly of blindly following moving averages.

There is optimism over Greece, Greek stocks are surging.

OPEC countries pumped a record amount of crude oil over the last month.

The momo crowd continues to aggressively buy commodities including gold, silver, copper and oil.

Interest rates are pulling back after yesterday’s spike up.

Our very, very short-term early stock market indicator is mild positive but a serious downside probability remains high after the chase is over.

Gold futures are at $1180, silver futures are at $15.94, and oil futures are $60.81.

S&P 500 resistance levels are 2132, 2150, and 2200; support levels are 2100, 2063, and 2038.

DJIA futures are up 32 points.

KURODA UPSETS THE APPLE CART, BUND TOUCHES 1.06%

Bank of Japan governor, Kuroda, sent markets into a tizzy by stating that the yen should not weaken further against the dollar.  Traders have responded by aggressively selling the dollar.

Interest rates in Europe are spiking.  German bund touched 1.06%.

Weaker dollar is encouraging aggressive buying by the momo crowd in all commodities including gold, silver, copper and oil.

Our very, very short-term early stock market indicator is mild positive but there is considerable risk of a major down move after the initial short squeeze is over.

Gold futures are at $1191, silver futures are at $16.15, and oil futures are $61.63.

S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are up 47 points.

INTEREST RATE TANTRUM HITTING EMERGING MARKET BONDS, S&P 500 UNDER 100 DAY MOVING AVERAGE

Interest rate tantrum is showing up most aggressively in outflows from emerging market bonds.  S&P 500 closed below 100 day moving average.  This should be insignificant with the exception that many people blindly believe in it and act on it; for this reason at times it becomes a self fulfilling prophecy as believers sell the stock market.

Saudis are trying to prop up the oil market with positive statements regarding oil demand.

There is a fair amount of short covering in gold and silver.

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

Gold futures are at $1179, silver futures are at $16.01, and oil futures are $59.80.

S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are down 6 points.

CHINA BUBBLE TAKES ON MORE AIR, SHARP DROP IN TURKEY AND INTEREST RATE CONCERNS IN THE U. S.

Overnight China reported weak trade data.  This indicated a weak economy.  Shanghai market bubble took on more air on the theory that weaker the economy, more intervention from the government.  Chinese investors have tremendous faith in their government’s ability to prop up the market.

In Turkey elections, the ruling party did far worse than expectations.  Turkish lira and stock market have dropped sharply.

In the U. S., after Friday’s strong job report, there is apprehension about rising interest rates and how the stock market will react to them.

The momo crowd continues to aggressively buy gold, silver, and oil; however there is no buying by the Smart Money.

Interest rates are hanging near their highs.

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

Gold futures are at $1171, silver futures are at $16.02, and oil futures are $58.52.

S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2063, 2038, and 2017.

DJIA futures are down 21 points.

 

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