(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
QUARTER-END WINDOW DRESSING
Quarter-end window dressing is in full force. This is resulting in cross currants.
Gold is having difficulty holding $1200 level.
Oil has given up most of its gains on Yemen news.
Interest rates are higher.
Our very, very short-term early stock market indicator is mild positive.
Gold futures are at $1198, silver futures are at $17.08, and oil futures are $50.55.
S&P 500 resistance levels are 2063, 2100, and 2150; support levels are 2017, 2000, and 1975.
DJIA futures are up/down 38 points.
SAUDIS BOMB YEMEN HOUTHIS
Centuries old conflict between two branches of Islam, Suni and Shia, just escalated. Overnight Saudis launched air attacks against Houthis in Yemen. Saudis are the major Suni power. Houthis are a Shia sect supported by Iran which is a major Shia power. Now a full-fledged civil war is all but assured in Yemen.
Yemen produces very little oil but its geographic position relative to oil transport by sea and potential emergence of strife in Saudi are of concern.
Oil has jumped on the news, and so have gold and silver.
Interest rates are higher after poor U. S. Treasury bond auction yesterday.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1204, silver futures are at $17.03, and oil futures are $50.44.
S&P 500 resistance levels are 2063, 2100, and 2150; support levels are 2017, 2000, and 1975.
DJIA futures are down 95 points.
STRONG EURO, WEAK DURABLE GOODS
Euro is strong and has staged, at least temporarily, a breakout above 1.10 as of this writing.
Durable Goods x-trans came at -0.4% vs. +0.3% consensus.
Interest rates are falling on weak durable goods and gold is rising.
Oil is rising on weaker dollar.
Our very, very short-term early stock market indicator is mild negative.
Gold futures are at $1197, silver futures are at $17.10, and oil futures are $48.03.
S&P 500 resistance levels are 2100 and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are down 1 point.
FINALLY A WHIFF OF INFLATION, THE TALE OF TWO PMIS
After a series of disinflationary and deflationary data points, finally this morning core CPI shows a whiff of inflation. The number came at 0.2 vs. 0.1 consensus.
The foregoing is very important in that it may provide ammunition for the Fed to raise rates at a time when most market participants have become complacent. Such an event may cause the stock market to throw another tantrum.
Overnight there was a contrasting tale of two PMIs. HSBC manufacturing PMI in China was weaker than the consensus. Oil fell on this number. Then came German PMI which was better than expectations. Euro took off on the stronger number taking oil and gold with it.
As of this writing oil and gold are beginning to give up their gains as both are being slammed by the Smart Money into the strength.
Interest rates are range bound.
Our very, very short-term early stock market indicator is negative .
Gold futures are at $1190, silver futures are at $16.94, and oil futures are $48.08.
S&P 500 resistance level is 2150; support levels are 2063, 2038, and 2017.
DJIA futures are up 25 points.
EURO CONTINUES TO RISE
Only three trading days ago euro was breaking 1.04 against the dollar. As of this writing euro is at 1.091. For a major currency, this is a huge move. The lesson here is that when euro was breaking 1.05, there was not to be found a single guru who expected euro to move up. Now all these gurus are sitting on big losses. In our models, any time there is a strong consensus in one direction, we look at that as a contrary indicator.
Markets in Asia were mostly higher.
Markets in Europe are mostly lower.
Saudis say OPEC will not cut production unless everyone else cuts production. Since the U. S. is now a large producer and government mandated production cuts are not likely in the U. S., expect oil prices to be weaker.
Interest rates are range bound.
Momo crowd continues to aggressively buy gold and gold buying in China also continues. But Smart Money continues to sell gold into the strength.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1182, silver futures are at $16.77, and oil futures are $.
S&P 500 resistance level is 2150; support levels are 2063, 2038, and 2017.
DJIA futures are up 6 points.
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