(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
BLOWOUT EMPLOYMENT DATA, AMERICAN SMART MONEY WINS THE GOLD BATTLE AGAINST CHINESE
This morning the Department of Labor reported blowout jobs data. Non-farm Private Payrolls rose 295K vs. 230K consensus.
The end of the Lunar year holiday in China heralded a new battle over gold. We have been telling you about the running battle between Chinese aggressively buying gold and running prices up and then American Smart Money slamming gold by aggressively selling on the strength. We wrote, “Only time will tell who wins the battle.” This morning the verdict is in. American Smart Money won the battle. Gold has decisively not only broken the support at $1200, it has also broken the strong support zone of $1182 – $1184.
It is important to note that our very long-term rating on gold is positive. Our very, very short-term rating on gold has been negative.
Yesterday, we shared our analysis with you that the real reason behind oil run up was short squeeze and our models predicted that the short squeeze would not last. Now this has come true. As of this writing oil has retraced 100% of the gains from the recent rally.
Interest rates are rising.
Our very, very short-term early stock market indicator is mild negative, but it can easily turn into a strong positive.
Gold futures are at $1181, silver futures are at $15.87, and oil futures are $50.25.
S&P 500 resistance level is 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 114 points.
ECB BOND BUYING TO START ON MARCH 9, CHINA CUTS GROWTH FORECAST TO 15 YEAR LOW
ECB Chief, Mario Draghi, has announced that bond buying program will start in Europe on March 9th. There is a fair amount of optimism in European markets over this bond buying program.
The momo crowd is aggressively buying gold on the prospect of more money printing in Europe. However, details of this program have been well-known and this is already discounted in the gold price, it does not make any sense to buy gold because of today’s announcement.
China reduced its growth forecast to 7%, this is the lowest target in 15 years.
Initial Unemployment Claims came at 320K vs. 295K consensus; this number is very disappointing and carries a heavy weight in our models. Interestingly interest rates are inching up on this number, they should have been inching down.
Yesterday and overnight, oil experienced a massive short squeeze. The gains from the short squeeze are not likely to last.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1203, silver futures are at $16.25, and oil futures are $51.62.
S&P 500 resistance level is 2150; support levels are 2063, 2038, and 2017.
DJIA futures are up 42 points.
SUPREME COURT TO HEAR OBAMACARE ARGUMENTS, SURPRISE RATE CUT IN INDIA, AND ADP DATA
Supreme Court today will hear arguments on Obamacare. At issue are the subsidies provided by the federal exchange. Plaintiffs contend that only states can provide such subsidies. Expect health care stocks to be volatile based on what questions are asked by justices.
The Reserve Bank of India announced a surprise rate cut joining other world economies in providing monetary stimulus.
ADP employment data came at 212K vs. 215K consensus.
Oil has been rallying as API inventory data showed inventory build for the last week was lower than the consensus.
The pattern of the Chinese buying gold and American Smart Money selling into the strength continues.
Interest rates are range bound.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1205, silver futures are at $16.26, and oil futures are $50.70.
S&P 500 resistance level is 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 49 points.
NASDAQ HITS 5,000 ON WAY TO 10,000
NASDAQ hit 5,000 after 15 years. In the short to medium-term, NASDAQ is very overbought and is likely to experience a correction, even a bear market. Such a dip will be a buying opportunity. In five to seven years, it is more likely than not, that NASDAQ will hit 10,000.
The pattern of Chinese buying gold and Smart Money from the United States selling into the strength continues.
Interest rates are inching up.
Oil is range bound but very volatile in a tight range.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1205, silver futures are at $16.32, and oil futures are $50.12.
S&P 500 resistance level is 2150; support levels are 2100, 2063, and 2038.
DJIA futures are down 33 points.
BOLD BUDGET IN INDIA, CHINA CUTS INTEREST RATES
In India, the most important economic event of the year is the government budget. Modi’s government offered a bold budget with several reforms but lost the opportunity to totally overhaul the system. Indian stock market is responding positively.
China cut interest rates to bolster weak economy.
Chinese strongly bought gold on interest rate cuts. The pattern over the last few days has been Chinese buying runs up gold but then American selling brings it back down. Only time will tell who wins.
Oil is attempting a rally.
Interest rates are range bound.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1215, silver futures are at $16.61, and oil futures are $49.52.
S&P 500 resistance level is 2150; support levels are 2100, 2063, and 2038.
DJIA futures are up 7 points.
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