WEEKLY MARKET DIGEST: JOBLESS CLAIMS AT 40 YEAR LOW, DOLLAR REPLACEMENT FEARS OVERBLOWN $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

WEEKLY MARKET DIGEST: JOBLESS CLAIMS AT 40 YEAR LOW, DOLLAR REPLACEMENT FEARS OVERBLOWN  $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. ) 

EMPLOYMENT REPORT DISAPPOINTS PESSIMISTS

Non-farm Private Payrolls came at 210K vs. 220K consensus.  However, whisper numbers were much lower.  Going into the report pessimists were running up gold, silver, and bonds.  After the report, gold and silver are retreating.  After first pulling back, bonds are becoming much stronger.

In our analysis, the reaction of the bond market is misplaced and about half of it is the result of short covering.

Oil is range bound.

Our very, very short-term early stock market indicator is neutral.  Expect the market to be very volatile as there are differing interpretations of the bond market.

Gold futures are at $1085, silver futures are at $14.67, and oil futures are $44.20.

S&P 500 resistance levels are 2100, 2111, and 2132; support levels are 2038, 2017, and 2000.

DJIA futures are down 19 points.

JOBLESS CLAIMS NEAR 40 YEAR LOW, GERMAN EXPORTS RISE SHARPLY

Initial Unemployment Claims came at 270K vs. 272K consensus.  Unemployment claims are hovering near a 40 year low.  The strong labor market is likely to boost growth in the U. S.

Germany is the economic engine of Europe.  German manufacturing exports rose 2% vs. 0.2% consensus.

The foregoing data is encouraging for stocks but negative for bonds, gold and silver.

WTI oil is falling again under $45.  Brent is now decisively under $50.

Interest rates are slightly ticking up.

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

Gold futures are at $1086, silver futures are at $14.50, and oil futures are $44.70.

S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are up 22 points.

SURPRISE ADP, DOLLAR REPLACEMENT FEARS OVERBLOWN

ADP employment change came at 185K vs. 220K consensus.  This number is surprisingly weak.  Interestingly the bond market does not believe in this number as interest rates have risen since the number was released; on a weak number interest rates should have fallen.

Falling interest rates have also strengthened the dollar.

The momo crowd aggressively bought gold and silver on the weak number but the rise in the dollar is hampering gold and silver.

There is a fair amount of short covering in oil but a short squeeze is not yet underway.

Lots of gurus have been spreading fears about dollar’s status as the reserve currency for the purpose of selling their services.  Today IMF has come out and presented a cogent analysis as to why renminbi is far from becoming a reserve currency.

Our very, very short-term early stock market indicator is positive but can turn on a dime.  We have specifically excluded DIS from our analysis as DIS alone will cause over 50 point drop in DJIA.

Gold futures are at $1088, silver futures are at $14.57, and oil futures are $46.17.

S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are up 80 points.

COMMODITIES STAGING A REBOUND

Commodities including oil, gold, silver, and copper are attempting a rebound.  Commodities are very oversold, such a rebound to relieve the oversold condition is typical.  Of more interest is the potential for a short squeeze that can be traded from the long side first and then used to establish a short position when the squeeze enters exhaustion phase.

Interest rates are hanging near lows.

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

Gold futures are at $1090, silver futures are at $14.58, and oil futures are $45.97

S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are up 5 points.

OIL CONTINUES TO FALL BUT GOLD STILL HOLDING, PUERTO RICO DEFAULTS

Oil has continued to fall, dipping below $46 a few minutes ago before rebounding.  Gold is holding around $1090.

PCE, which is a better indication of inflation than CPI came at 0.1% vs. 0.2% consensus.  Personal income came at 0.4% vs. 0.3% consensus.  Personal spending came at 0.2% vs. 0.2 consensus.

Puerto Rico has defaulted on its debt.  It is a scary headline but the effect is going to be limited to Puerto Rico and holders of Puerto Rico debt.

The stock market in Athens has opened after a long hiatus.

Interest rates are hanging near their lows.

Chinese market fell overnight in response to weak manufacturing data.

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

Gold futures are at $1090, silver futures are at $14.62, and oil futures are $46.20.

S&P 500 resistance levels are 2111, 2132, and 2150; support levels are 2063, 2038, and 2017.

DJIA futures are up 4 points.

 

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