(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
STIMULUS ADDICTS WAKE UP AND SMELL MORE BAD DATA FROM CHINA
August 10, 2012
There is more bad data from China. Exports rose 1% in July, down from 11.3% in June.
Imports were up 4.7% in July dipping from June’s 6.3%.
Stimulus addicts have been running up markets on every piece of bad data from China contending that bad data increases the changes for stimulus.
Finally, it appears that some addicts are returning to soberness today, at some point bad data is bad data.
Gold futures are at $1610, silver futures are at $27.76, and oil futures are $91.89.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are down 46 points.
MARKETS CHEER BAD DATA FROM CHINA
August 9, 2012
Data published in China overnight show that Chinese economy is in trouble. Retail sales growth dipped to 13.1% from 13.7%; analysts were expecting a rise to about 15%.
Chinese industrial production growth dipped to 9.2% from 9.5%; analysts were expecting a rebound to about 10%.
Markets are cheering the bad data because in a perverse way bulls believe that the weak economy will lead to more stimulus from the Chinese government.
Gold futures are at $1613, silver futures are at $27.96, and oil futures are $93.84.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are up 4 points.
WILL DATA SPOIL THE PARTY?
August 8, 2012
The data released after the market close and this morning such as MCD, PCLN, RL, and DIS does not support the recent optimism in the markets. Will the data spoil the party? It is yet to be seen. Markets are overbought in the very short-term.
Caution is warranted.
Gold futures are at $1606, silver futures are at $27.79, and oil futures are $93.50.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are down 62 points.
MARKETS ARE OVERBOUGHT IN THE SHORT-TERM
August 7, 2012
Upward momentum continues, but markets are getting overbought in the short-term. The rally has partially been driven by short covering. Short covering has almost run its course.
Another driver behind the market rise is the number of under-performing money managers. According to one report 87% of active money managers are under-performing their benchmarks. When markets go up, some under-performing money managers have no choice but to buy aggressively even if they do not like the market.
Gold futures are at $1615, silver futures are at $28.10, and oil futures are $92.69.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are up 36 points.
MOMENTUM FROM JOBS REPORT CONTINUES
August 6, 2012
Positive momentum from jobs report continues. Enthusiasm from the U.S. jobs report spread to Asia where the markets were strong overnight.
Most European stocks are also strong.
Precious metals are in the risk on mode.
Gold futures are at $1610, silver futures are at $27.71, and oil futures are $90.95.
S&P 500 resistance levels are 1400, 1410, and 1415; support levels are 1380, 1368, and 1358.
DJIA futures are up 11 points.
