This is what you need to know today.

Terror

Terror in France is dampening the bullish sentiment even though stocks in Europe, with the exception of travel stocks, are only slightly lower.

Of special note is that  gold has spiked on each piece of new news related to terror but each rally has been sold.

Strong Retail Sales

Retails Sales carry heavy weight in our models because U. S. economy is about 70% based on consumers.  Retail Sales Ex-auto came at 0.7% vs. 0.4% consensus. The higher number is better.

Core CPI came at 0.2% vs. 0.2% consensus.

Dollar Yen

We watch dollar yen very carefully because yen is the safe haven currency.  During times of crisis, money flows into yen.

So far this week, dollar yen has shown the biggest weekly gain since 1999.  The significance here is that the sophisticated doomsday crowd is giving up the ghost of a calamity.  In contrast silver, which is mostly populated by unsophisticated investors, is still holding its gains and to the doomsday narrative.

Markets

Our very, very short-term early stock market indicator is neutral can quickly turn negative as the market is overbought.

Oil is running on strong economic data and terrorism.

Interest rates are ticking higher and bonds are falling on strong economic data.

Dollar is getting stronger against most currencies.

Gold futures are at $1328, silver futures are at $20.26, and oil futures are $45.71.

S&P 500 resistance levels are 2222, 2200 and 2165; support levels are 2150, 2132, and 2120.

DJIA futures are up 26  points.

This is what you need to know today.  

England

Bank of England held rates steady defying the overwhelming consensus of the markets that it would lower the rate by 0.25% to contain the negative fallout from Brexit.

Gold

Gold has broken major support at $1330.  It touched $1322 before bouncing.

The momo crowd continues to buy the dip.  Momo crowd is especially buying silver.

Overnight gold ran up strong on momo crowd buying to $1348.  As gold approached $1350 Smart Money stepped in to sell aggressively but stopped selling once gold fell below $1342.  This has been one of the rare recent instances of Smart Money selling gold.

Dollar Yen

Dollar Yen has broken major resistance at 105.  This indicates that the doomsday crowd is starting to give up the ghost.

This is what you need to know today.

New High

U. S. stocks made another new high. It is important to note that market internals are weaker than what would be expected on this breakout. Market internals do not provide precise timing but do provide valuable insights.

Fed’s Beige Book will be released at 2:00 pm ET and may potentially move the markets.

Oil Warning

Influential IEA has issued a warning that global glut in oil is continuing despite demand growth and big decline in non-OPEC production.

Economic Data

Eurozone May Industrial Production came at 0.5% vs. 1.4% consensus.

China’s Trade Surplus came at $48.11 billion vs. $46.4 billion consensus.

Japan’s Industrial Product came at -6.2% vs. -2.2% consensus.

Overall, the new economic data is weaker than expectations.

German Bund

10-year German bunds sold with a negative yield for the first time ever.

Oil Inventory

API Oil Inventory came at +2.2 million barrels vs. -2 million consensus.  The data took the steam out of the oil rally.

The U. S. government data on oil inventories will be released at 10:30 am ET, this data is considered more authoritative.

Markets

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

Oil is weaker.

Gold and silver are attempting a rally after pull back yesterday.

Copper has screamed higher and briefly went over $5,000 per metric ton, its highest level since Chinese day traders ran it up in April.

Currencies, interest rates and bonds are range bound.

Gold futures are at $1342, silver futures are at $20.41, and oil futures are $46.29.

S&P 500 resistance levels are 2200, 2165 and 2150; support levels are 2132, 2120, and 2100.

DJIA futures are up 32  points.

This is what you need to know today.

New High

U. S. stocks are at new high.  Our very, very short-term indicator is positive, but can quickly turn negative. Please see the separate post on this subject titled ‘Should You Buy, Sell, Hold or Short As The Market Hits A New High?’

Gold And Silver

Earlier this morning gold broke below $1350, hitting $1346 where the momo crowd  aggressively started buying it.

Momo crowd continues to aggressively buy silver.

Smart Money continues to selectively and lightly sell.

Japanese Stocks

Japanese stocks have moved up 6.2% in two days after Abe’s impressive victory.

Markets

Our very, very short-term early stock market indicator is positive, but can quickly turn negative.

Oil rallied in anticipation of OPEC report and has maintained the gains.

Interest rates continue to drift up and bonds continue to drift down.

Attempt to rally yen against dollar are failing.

Gold futures are at $1295, silver futures are at $17.15, and oil futures are $47.00.

S&P 500 resistance levels are 2217, 2200 and 2150; support levels are 2132, 2120, and 2100.

DJIA futures are up 84 points.

This is what you need to know today.

Reduce Cash In Hedges

Market exposure is being increased by decreasing cash in hedges due to improving geopolitical and economic data.  Please scroll down to the section ‘What To Do Now.’  Please deploy cash in special situations and on pull backs.  Here are the key points.

• Earnings season starts today.  There have been very few pre-announcements. This is a strong indication that after five quarters of declining earnings, earnings in the first quarter may have reached the trough.Historically it has paid handsomely to buy stocks aggressively when earnings reach the trough.  However this time is different in that typically when earnings reach the trough, the stock market is near its lows; this time it is near its highs. For this reason, we will increase buying buy not aggressively.
• China June CPI came at -0.1% vs. -0.3% consensus and -0.5% previously.  This indicates that deflationary trends in China are abating.
• Strong employment report in the U. S. along with ISM data shows that the weakness in May economic data was likely an aberration.
• In Japan, Abe won the re-election, has now a better majority and is likely to make new decisions to improve the economy.
• The United Kingdom, May is on the verge of becoming the new prime minister several weeks earlier than anticipated.  There has been overhang of no body being really in charge of the U. K.
• In Australia, Turnbull has been elected as Prime Minister reducing uncertainty.

Markets

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

Silver and gold were aggressively bought by the momo crowd overnight.  Silver hit $20.75 and that is where Smart Money started selling.

Oil earlier broke below $45, took the stops of less initiated and then started rallying on good economic data.

Yen is weakening on Abe’s big victory.

Interest rates are slightly ticking up and bonds are slightly weaker.

Gold futures are at $1295, silver futures are at $17.15, and oil futures are $47.00.

S&P 500 resistance levels are 2132, 2150 and 2200; support levels are 2120, 2100, and 2063.

DJIA futures are up 81  points.