WEEKLY MARKET DIGEST: MARKETS CHEER IN UNISON EMPLOYMENT COST INDEX, CHINESE SELL GOLD $GLD $SLV $USO $DIA $SPY $QQQ $TBF $TBT

WEEKLY MARKET DIGEST: MARKETS CHEER IN UNISON EMPLOYMENT COST INDEX, CHINESE SELL GOLD $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. ) 

MARKETS CHEER IN UNISON EMPLOYMENT COST INDEX

All markets including stocks, bonds, gold, silver, copper, and oil are rocketing in response to Employment Cost Index.  The index came at 0.2% vs. 0.6% consensus.

In our analysis, the interpretation of market participants that the Fed will not raise interest rates now is just plain wrong.  Also all other evidence contradicts the number released this morning.

Our very, very short-term early stock market is positive but can turn on a dime as the  market is very overbought.

Gold futures are at $1094, silver futures are at $14.83, and oil futures are $48.29.

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

DJIA futures are up 29 points.

FED KEEPS OPTIONS OPEN, STRONG GDP BUT WEAKER THAN CONSENSUS

Our analysis of the Fed’s statement is that the Fed is keeping its options open.

Q2 GDP-Advanced came at 2.3% vs. 2.5% consensus. Even though the number is below consensus, it is a strong number and is likely to be revised upwards.

There is significant short covering in gold, silver and oil.

Market in Shanghai fell again.

In the wake of the GDP number, interest rates are volatile.

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

Gold futures are at $1085, silver futures are at $14.68, and oil futures are $49.11.

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

DJIA futures are down 42 points.

THE FED DAY

The Fed will announce its rate decision at 2:00 pm ET.  Market will be carefully reading the tea leaves to see the timing of the rate increase.  Consensus is that the rate increase will happen in September.  However weakness in places like China and Brazil may result in the Fed postponing the rate increase.

The momo crowd is buying gold in the hope that a rate increase will be delayed.

Interest rates and oil are range bound.

Our very, very short-term early stock market indicator is positive but can reverse on a dime.

Gold futures are at $1094, silver futures are at $14.63, and oil futures are $47.60.

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

DJIA futures are up 17 points.

STOCKS LIKELY TO ROCKET AS CHINA DID NOT EXPLODE, MARKET IGNORING SERIOUS BRAZIL’S REAL DROP

Last night Shanghai dropped only about 1.8%.  Fears of a deeper drop did not come true.  As a result, investors are likely to run up U. S. stocks today.

For the time being, stock market is ignoring the serious drop in Brazil’s currency, real, that is hitting a 12 year low.  Real has dropped 21% this year alone and is the worst performing major currency.  Brazil is a major economy.  Some of this may go into Fed’s thinking as it meets.  The Fed will announce its rate decision tomorrow.

Gold, oil and interest rates are range bound.

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

Gold futures are at $1093, silver futures are at $14.55, and oil futures are $47.52.

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

DJIA futures are up 62 points.

8% PLUNGE IN CHINA SOURS THE MOOD ACROSS THE GLOBE, U. S. UNEMPLOYMENT PLUMENTS TO 42 YEAR LOW

In the closing hour, stocks in Shanghai plunged about 8%.  Stocks across the globe are lower in sympathy.

The weekly applications for unemployment fell to 255K, the lowest level since November 1973.   This is more impressive than it seems on the surface since the U. S. population has grown significantly since 1973; in 1973 the U. S. population was 212 million.  The present U. S. population is estimated to be 325 million.

Durable Goods ex-transports came at 0.8% vs. 0.5%  consensus.

Gold and silver attempted to rally overnight.  At dawn, gold traded as high as $1105.  Initially gold was being bought as Shanghai plunged. However, since then, gold has given up all of its gains.  As of this writing it is trading  under $1090.

Oil started falling as China started plunging and has not recovered as of this writing.

Interest rates are falling as money rushes into the safety of U. S. Treasuries.

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

Gold futures are at $1089, silver futures are at $14.53, and oil futures are $47.61.

S&P 500 resistance levels are 2100, 2111, and 2138; support levels are 2038, 2017, and 2000.

DJIA futures are down 126 points.

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