(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
ANOTHER DEFLATION DATA POINT, MORE GREEK JITTERS
Consumer Price Index in Italy fell 0.4% month to month, this is another in a series of deflationary data.
Expect volatility in markets on Greece related headlines.
In yesterday’s morning capsule, we shared with you that oil would rally if DOE inventory data was not as huge as API data. This is exactly what happened. Of course such moves are temporary.
In the yesterday’s morning capsule we also shared with you that the reason behind gold’s move to $1224 was nonsensical, now gold has moved down.
Interest rates are range bound.
Today will be a classic battle between long selling because they do not want to hold over the weekend due to Greece related risk and shorts buying to cover for the same reason. The move can be exaggerated because automated algorithms will jump on which ever side seems to be winning.
Our very, very short-term early stock market indicator is mild positive.
Gold futures are at $1208, silver futures are at $16.38, and oil futures are $51.77.
S&P 500 resistance levels are 2100 and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 32 points.
INTEREST RATE HIKE LIKELY MOVED FROM JUNE TO SEPTEMBER, GREEK DRAMA CAUSING WHIPSAWS
The Fed statement yesterday afternoon was more dovish compared to the consensus. Now there is only 18% probability of a rate hike in June. September is more likely the time for a rate increase.
NIKKEI, in Japan, hit a 50 year high. FTSE, in London, is approaching an all time high.
Greece has submitted a letter for extension. First, the stock futures ran up to new highs, but then they fell when the news crossed the wires that Germany has rejected the Greek proposal. In our analysis, it is more likely than not that some compromise will be worked out at the eleventh hours. Of course there are no guarantees.
The momo crowd is aggressively buying gold and silver. The logic behind this buying is that three extra months of low interest rates will help gold and silver.
In yesterday’s morning capsule, we shared with you our analysis that the strong up move in oil was options related and was likely to reverse. This is exactly what happened, oil gave up all of its gains during the day. At 4:30 pm ET API released inventory data for last week. Oil inventories rose by 13 million vs. consensus of 3 million. Smart Money was aggressively selling oil immediately after the release of API data. DOE oil inventory data, which is considered more authoritative, will be released this morning. If DOE data shows inventory buildup of 13 million, oil is likely to fall under $50. On the other hand if DOE inventories are less than 4 million, expect a short squeeze to the upside.
Our very, very short-term early stock market indicator is mild positive.
Gold futures are at $1215, silver futures are at $16.64, and oil futures are $50.56.
S&P 500 resistance levels are 2100 and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 30 points.
IMPORTANT FOMC MINUTES AHEAD
The Fed will release the last FOMC minutes this afternoon. The minutes will give a clue if the Fed is ready to raise rates in June.
Yesterday’s bounce in oil is options related and is likely to reverse.
Gold is trying to hold $1200 support.
Interest rates, after aggressively moving up, are consolidating.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1207, silver futures are at $16.43, and oil futures are $52.72.
S&P 500 resistance levels are 2100 and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 34 points.
MARKETS IGNORE FAILURE OF GREEK TALKS
Greek talks failed, but markets remain optimistic that a deal will be struck.
Oil is attempting a rally.
Smart Money is lightly selling gold and silver.
Interest rates are inching up.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1223, silver futures are at $16.71, and oil futures are $53.15.
S&P 500 resistance level is 2100; support levels are 2063, 2038, and 2017.
DJIA futures are down 18 points.
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