(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
SPAIN IS THE BEST PERFORMING MARKET
August 17, 2012
Since July 24th bottom, the Spanish market is up about 25%. The up move continues this morning. Spain has been the epicenter of the European crisis. The point is that the most money is made by identifying value during troubled times.
Most of Europe is on vacation and volume is light. Today is option expiration. Big moves are possible on light volume.
Gold futures are at $1617, silver futures are at $28.21, and oil futures are $95.47.
S&P 500 resistance levels are 1415, 1424, and 1437; support levels are 1410, 1400, and 1380.
DJIA futures are down 4 points.
CSCO EARNINGS BUOYS THE MARKET
August 16, 2012
CSCO is considered a bell weather for technology across the globe. Tone of John Chambers, the CEO, was unusually positive on the conference call. Markets are being buoyed by the positive tone of CSCO call.
Gold futures are at $1606, silver futures are at $27.83, and oil futures are $94.54.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1400, 1380, and 1368.
DJIA futures are up 24 points.
GOLD MOMO CROWD CELEBRATES LOW INFLATION
August 15, 2012
Traditionally gold and silver are a hedge against inflation. The long historical pattern is that gold goes up when inflation goes up and gold goes down when inflation goes down.
At 8:30 am Consumer Price Index (CPI) was reported. July Core CPI came at 0.1% vs 0.2% consensus.
Our computer algorithms that detect momo crowd buying in gold immediately saw aggressive buying by the momo crowd. Gold spiked about $6 while silver spiked about $0.25.
The rationale of the momo crowd is that low inflation is good for gold and silver because it is one less impediment for QE3 to occur.
Our rating on gold and silver remains neutral with negative bias. The momo crowd is on thin ice.
Gold futures are at $1601, silver futures are at $27.84, and oil futures are $93.02.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1380, 1368, and 1358.
DJIA futures are down 21 points.
STRONG ECONOMIC DATA BUT INFLATION HEATS UP
August 14, 2012
July retails x-auto came at 0.8% vs. 0.3% consensus. This is the third piece of economic data in a row that is stronger than expected.
Even though the market is technically overbought, our stance towards the market has become less cautious after three pieces of strong economic data.
Inflation is heating up. July Core PPI came at 0.4% vs consensus of 0.2%.
GDP in the euro area shrank 0.2%. However, France and Germany held up better than expected. France was expected to contract, but GDP remained unchanged. Germany was expected to grow at 0.1% but actual growth came at 0.3%.
Gold and silver are falling hard.
Gold futures are at $1595, silver futures are at $27.70, and oil futures are $92.98.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1400, 1380, and 1368.
DJIA futures are up 32 points.
OVERBOUGHT CONDITIONS CONTINUE
August 13, 2012
Overbought conditions in most markets continue. Overbought conditions can persist for a long time, but in general it is best to be cautious.
Gold futures are at $1620, silver futures are at $27.95, and oil futures are $93.95.
S&P 500 resistance levels are 1410, 1415, and 1424; support levels are 1380, 1368, and 1358.
DJIA futures are down 20 points.
