WEEKLY MARKET DIGEST: STOCKS SLUMP ON BAD ECONOMIC DATA, GOLD SPIKES

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(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)

CHINA CONTRACTS, U.S. SLOWS AND GOLD SPIKES

June 1, 2012

China PMI came perilous close to a point that indicates economic contraction and about 10% lower than whisper numbers.

In the U.S. non-farm payroll came at 82K vs consensus of 168K and whisper number of 120K.

Gold and silver are spiking on hopes of QE3. We still think QE3 unlikely, but Operation Twist may be extended.

Yesterday we told you that one of the factors with heavy weight in our models to generate a buy signal in gold and silver is additional monetary easing in the United States and China. Prospects of such easing are now significantly higher than they were only 24 hours ago.

We started giving a buy signal on gold at $1555 this morning, but only a couple of minutes later when we were ready to publish the signal gold had already jumped to $1575. There is heavy resistance in gold between $1575 and $1600.

We also told you yesterday that the risks in gold and silver were to the upside. On a pull back we may initiate a buy in gold, silver, or miners. We will be carefully watching actions of Smart Money and the risk profile of each class as its develops before deciding what is a better investment.

S&P 500 futures have now filled the prior gap at 1287 and fallen to 1281.75.

Gold futures are at $1576, silver futures are at $27.52, and oil futures are $82.85.

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S&P 500 resistance levels are 1287, 1296, and 1300; support levels are 1280, 1272, and 1257.
DJIA futures are down 190 points.

EQUITY FUTURES SHED GAINS FOLLOWING ECONOMIC DATA

May 31, 2012

Equity futures have shed gains following weaker than expected ADP employment data.

The U.S. GDP grew at 1.9% as expected.

Today expect month end shenanigans by some money managers.

Gold futures are at $1563, silver futures are at $28.16, and oil futures are $87.42.

S&P 500 resistance levels are 1324, 1330, and 1339; support levels are 1300, 1290, and 1285.

DJIA futures are up 23 points.

CHINA EASING SPECULATION QUASHED

May 30, 2012

Yesterday markets went up based on rampant speculation that China would ease.  Today the speculation was quashed and stock markets across the world are falling.

Italy sold 10 year and five-year bonds short of its maximum target.  This is creating a mild panic in the markets.  Gold and silver fall as momo crowd stays in control of these markets.

Gold futures are at $1548, silver futures are at $27.73, and oil futures are $89.32.

S&P 500 resistance levels are 1324, 1330, and 1339; support levels are 1312, 1300, and 1290.

DJIA futures are down 107 points.

CHINA SPECULATION BOOSTS MARKETS

May 29, 2012

On Friday, stock markets all over the world were showing a perfect set up for an advance. Today they found an excuse to go up in speculation that China may ease or provide stimulus.

Such a move will be inflationary, but gold and silver are not reacting to China speculation. Chinese aggressively bought car manufacturing and cement producer stocks, but not gold and silver

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Gold futures are at $1578, silver futures are at $28.27, and oil futures are $91.39.

S&P 500 resistance levels are 1330, 1339, and 1348; support levels are 1312, 1300, and 1290.
DJIA futures are up 90 points.

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