(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
STRONG EMPLOYMENT DATA, BULLISH FOR THE LONG-TERM
December Non-Farm private Payrolls came at 240K vs. 235K. There is an anomaly in the data, hourly earnings came at -0.2% vs. +0.2% consensus. It is not clear as to what has caused this anomaly.
The bull case is based on the strong employment number. The bear case would be made on potential of interest rates rising. In the long-term bulls are likely to win. In the short-term, the market is overbought and susceptible to decline.
Interest rates are slightly higher.
The momo crowd continues to aggressively buy gold and silver in the face of fundamental data that is negative for gold.
Oil is range bound
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1214, silver futures are at $16.42, and oil futures are $48.67.
S&P 500 resistance levels are 2063, and 2100; support levels are 2038, 2017, and 2000.
DJIA futures are up 9 points.
A KEY REPORT TOMORROW WILL DETERMINE NEAR TERM MARKET DIRECTION
Expect momentum from yesterday to carry into early going in the stock market. The employment report to be released at 8:30 am ET tomorrow will determine near term direction of the market.
Interest rates are beginning to inch up from extraordinary low levels.
Oil is trying to stabilize.
The momo crowd continues to aggressively buy gold and silver,
Our very, very short-term early stock market indicator is positive.
Gold futures are at $1212, silver futures are at $16.52, and oil futures are $49.13.
S&P 500 resistance levels are 2063 and 2100; support levels are 2017, 2000, and 1975.
DJIA futures are up 163 points.
NEW MONEY STEPS IN TO CONTAIN SELLERS, EURO ZONE HIT WITH DEFLATION
New money that has come into the market is decisively stepping in to contain the sellers.
Euro zone is hit with deflation. Prices in December 2014 were 0.2% lower than prices in December 2013.
The terrorist incident in Paris has important implications for investors as the right-wing sentiment in Europe will be strengthened.
In the U. S., job growth is booming. ADP employment change came at 241K vs. 230K consensus.
Interest rates are hanging near lows.
Oil is attempting a rebound.
Mild selling by Smart Money is seen in gold and silver.
Our very, very short-term early stock market indicator is positive.
Gold futures are at $1212, silver futures are at $16.37, and oil futures are $48.22.
S&P 500 resistance levels are 2017, 2038, and 2063; support levels are 2000, 1975, and 1950.
DJIA futures are up 149 points.
THE REAL REASON BEHIND YESTERDAY’S STOCK MARKET DECLINE AND WHAT IS NEXT
There were worries about the rapid drop in oil price, upcoming election in Greece, and upcoming ECB meeting. However, the real reason behind over 300 point decline in the U. S. stock market was deferred profit taking by those investors who held off taking profits in 2014 in order to defer taxes into 2016. Such selling is not yet complete. This does not mean the stock market will continue to cascade down because the new year brings in fresh money to the stock market. Buying by the fresh money will soon come into equilibrium with deferred profit taking.
In a sign that Saudis are getting concerned about the speed of the drop in the price of oil, they have slightly increased the oil price for Asia. Let us see if the oil market takes notice. If this development gets enough notice, there may be a short-term bounce in oil.
The momo crowd continues to aggressively buy gold and silver.
Interest continue to fall on jitters over the Greek election.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1213, silver futures are at $16.31, and oil futures are $49.00.
S&P 500 resistance levels are 2038, 2063, and 2100; support levels are 2000, 1975, and 1950.
DJIA futures are up 12 points.
EURO HITS NINE YEAR LOW, BRENT FALLS BELOW $55
Euro hits nine year low against the U. S. dollar before recovering. Euro is being hampered on nervousness about election in Greece and quantitative easing.
Brent oil fell below $55 for the first time in five years.
Momo crowd is aggressively buying gold and silver.
Interest rates continue to fall as investors continue to seek security of government bonds.
Our very, very short-term early stock market indicator is negative.
Gold futures are at $1194, silver futures are at $16.01, and oil futures are $50.70.
S&P 500 resistance levels are 2038, 2063, and 2100; support levels are 2017, 2000, and 1975.
DJIA futures are down 77 points.
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