(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
NASDAQ AT ITS BEST LEVEL IN 13.5 YEARS BUT RISKS ARE RISING, GOLD MOMO CROWD BUYS INTO RESISTANCE
February 21, 2014
Nasdaq is at its best level in 13.5 years. S&P 500 is close to making a new high. However as explained in yesterday’s morning capsule, risks have risen.
Gold momo crowd is back buying heavily into resistance. As has been the case over the last three years, the behavior of the momo crowd is nontraditional. Institutional investors tend to back off when gold approaches resistance.
Oil and interest rates are range bound.
Gold futures are at $1322, silver futures are at $21.75, and oil futures are $103.20.
S&P 500 resistance levels are 1850 and 1900; support levels are 1825, 1800, and 1775.
DJIA futures are up 34 points.
SURPRISE IN FOMC MINUTES RATTLES THE STOCK MARKET, RISK IN STOCK MARKET HAS INCREASED
February 20, 2014
Previously a majority of the FOMC had been predicting start of interest rate rise in 2015. Yesterday afternoon when the minutes from the last meeting were released there was a big surprise. Many members seem to be leaning towards an interest rate increase in 2014 due to improving employment picture.
Predictably on FOMC minutes, stocks went down, interest rates went up, and gold went down.
Overnight China HSBC PMI hit a seven month low. This indicates the economy in China is slowing.
This morning bulls are trying to run up both stocks and gold. It will be interesting to see if sellers step in based on FOMC minutes from yesterday.
The risk in the stock market has increased. As more data becomes available, if appropriate, we will do a post on the subject. In any case preponderance of the evidence still is that any correction is likely to be a buying opportunity for the long-term.
Gold futures are at $1315, silver futures are at $21.65, and oil futures are $103.12.
S&P 500 resistance levels are 1837, 1850, and 1900; support levels are 1800, 1775, and 1766.
DJIA futures are up 9 points.
BUILDERS BECOMING LESS OPTIMISTIC, ABSURDITY OF OIL MOVING UP ON UKRAINE VIOLENCE
February 19, 2014
January Building Permits fell to 937K vs. 980K consensus. January Core PPI came at 0.2% vs. 0.1% consensus. In other words, there are early signs that inflation may not be as benign as generally believed.
Silver and gold bulls are encouraged this morning from the PPI data.
Oil shot up to $103.35 on reports of violence in Ukraine. In our analysis, these arguments are absurd.
Interest rates are slightly lower on weak building permits.
In early trading stocks are slightly negative. There is a concern that bulls were not able to surmount the resistance yesterday.
Gold futures are at $1319, silver futures are at $21.85, and oil futures are $102.86.
S&P 500 resistance levels are 1850 and 1900; support levels are 1825, 1800, and 1775.
DJIA futures are down 38 points.
BULLS EYE NEW STOCK MARKET HIGH IN THE FACE OF PRUDENT PROFIT TAKING
February 18, 2014
The stock market setup is near perfect for bulls to drive it to new highs. However, prudent investors often tend to sell on a second approach to new highs, which is the case this time. Let us see who wins the battle.
The early morning trading is quiet.
Oil is moving slightly higher.
Gold is pulling back from overnight highs.
Interest rates are range bound.
Gold futures are at $1322, silver futures are at $21.67, and oil futures are $101.50.
S&P 500 resistance levels are 1850, and 1900; support levels are 1825, 1800, and 1775.
DJIA futures are up 7 points.
