(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
DEFLATION AT PRODUCER LEVEL COMES TO THE U. S., OIL BREAKS SUPPORT
Producer Price Index PPI came at minus 0.5% vs. plus 0.3% consensus. Core PPI came at minus 0.5% vs. plus 0.1% consensus. These are deflationary numbers at producer levels.
In our analysis, taking into account other indicators, the U. S. is in disinflationary mode and not yet in deflationary mode.
Oil is falling and has broken a major support at $47.00.
Over night Chinese aggressively bought gold.
Interest rates are range bound.
Our very, very short-term early stock market indicator is neutral.
Gold futures are at $1156, silver futures are at $15.58, and oil futures are $46.10.
S&P 500 resistance levels are 2100 and 2050; support levels are 2038, 2017, and 2000.
DJIA futures are down 27 points.
POOR RETAIL SALES, EURO BOUNCES
Retail sales data was poorer than the consensus. Paradoxically the stock market likes this poor data because it may give the Fed an excuse to delay interest rate increase.
Stock futures were rallying on the retail sales data until it got hit with lower projections from INTC.
Euro bounced off 1.05 triggering a short squeeze in gold and silver. Smart Money lightly sold gold around $1165.
Interest rates are moving lower on the retail sales data.
Oil is range bound.
Our very, very short-term early stock market indicator is mild positive.
Gold futures are at $1157, silver futures are at $15.61, and oil futures are $48.56.
S&P 500 resistance levels are 2063, 2100, and 2150; support levels are 2038, 2017, and 2000.
DJIA futures are up 92 points.
STOCK MARKET TANTRUM AS DOLLAR CONTINUES TO SURGE
The stock market is throwing a tantrum as the dollar continues to surge. The sell-off was exasperated in the late afternoon when a multi billion dollar sell program was executed.
This is a natural progression of events and the volatility should be used to generate profits.
Silver has been holding up much better than gold. However in early trades this morning, silver bulls are showing some cracks.
Oil is in the wait and see mode for DOE inventory data that will be released at 10:30 am ET.
Our very, very short-term early stock market indicator is mild positive.
Gold futures are at $1157, silver futures are at $15.58, and oil futures are $48.74.
S&P 500 resistance levels are 2063, 2100, and 2150; support levels are 2038, , and .
DJIA futures are up 32 points.
DOLLAR SURGE PUTS STOCK BULLS IN A BAD MOOD
Dollar is surging to a near 12 year high against euro. Dollar surge is putting stock bulls in a bad mood. Paradoxically this is good for stocks in the medium-term. In the short-term a correction can start at any time. Any correction will be an opportunity to add to existing long positions, start new long positions and book profits on short positions.
As expected, interest rates are falling in Europe due to ECB bond buying.
Interest rates in the United States are also falling as money rushes out of stocks and into bonds.
Oil is range bound.
Gold bulls are trying to run up gold based on speculation that Apple will be a huge buyer of gold for Apple Watch. Such speculation does not measure up to scientific scrutiny.
Our very, very short-term early stock market indicator is negative but can easily turn positive.
Gold futures are at $1165, silver futures are at $15.74, and oil futures are $49.45.
S&P 500 resistance levels are 2100 and 2150; support levels are 2038, 2017, and 2000.
DJIA futures are down 154 points.
INTEREST RATE JITTERS
After the strong jobs report, stock market is suffering from interest rate jitters. Prior to the jobs report consensus was for an interest rate hike in September. Now the consensus is beginning to move towards June.
Our models continue to show that barring any new fundamental development, there is still life left in this bull. Of course, the market is still overbought in the short-term and a correction can happen at any time. Any correction will be an opportunity to buy or buy to cover short positions.
Interest rates are giving up some of the gains made on Friday.
Chinese continue to aggressively buy gold.
Oil is range bound but there is a serious risk of a breakdown.
Our very, very short-term early stock market indicator is positive.
Gold futures are at $1171, silver futures are at $15.81, and oil futures are $49.32.
S&P 500 resistance levels are 2100, and 2150; support levels are 2063, 2038, and 2017.
DJIA futures are up 9 points.
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