(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
STRICT CAPITAL CONTROL IN CYPRUS
March 28, 2013
Cyprus has become the first eurozone country to put limits on daily withdrawals, cashing checks, amount of credit card transactions, and money transfers. People can withdraw a maximum of 300 euro each day. People cannot take more than 3000 euros out of the country, and overseas credit card transactions cannot exceed 5000 euros per month.
Gold is falling and stocks are taking encouragement because there are no riots in the streets of Nicosia, the capital of Cyprus.
It is the last day of the quarter. Expect portfolio managers to attempt to run up their favorite stocks to increase their performance. Also expect some investors to lock up profits into the runup. In other words, this will be a day of cross currents.
Gold futures are at $1600, silver futures are at $28.57, and oil futures are $96.74.
S&P 500 resistance levels are 1565, 1570, and 1575; support levels are 1550, 1537, and 1530.
DJIA futures are up 29 points.
LOWER DEMAND FOR ITALIAN BONDS SPOOKS THE STOCK MARKET, GOLD SHOULD RISE BUT IS FALLING
March 27, 2013
This morning demand was weak for as Italy sold 6.9 billion euros of five and 10 year bonds.
For 10 year bonds bid/cover ratio was 1.33 vs. average of 1.48 and for five year bonds the ratio was 1.22 vs. average of 1.40.
Italy is still in a political stalemate in the aftermath of an inconclusive election.
The U. S. stock market is spooked over lower demand for Italy’s debt.
Gold should rise but it is slightly falling as the momo crowd buys gold mostly on good news.
Gold futures are at $1597, silver futures are at $28.28, and oil futures are $95.94.
S&P 500 resistance levels are 1558, 1565, and 1570; support levels are 1537, 1530, and 1517.
DJIA futures are down 73 points.
THE U. S. HOUSING ROCKS, CHINA’S GUANGDONG CRACKS DOWN ON HOUSING
March 26, 2013
January Case-Shiller 20-city Index of house prices rose 8.1% vs. 7.5% consensus. In other words, house prices in the U. S. rose more than expectations in January.
Across the world, in an ominous sign, Guangdong province became the first in China to announce strict measures to cool the rising housing prices. The market in China was weak in anticipation of further crackdown on housing. In contrast, the U. S. market is encouraged because of the housing data.
Gold futures are at $1597, silver futures are at $28.76, and oil futures are $95.64.
S&P 500 resistance levels are 1558, 1565, and 1570; support levels are 1537, 1530, and 1517.
DJIA futures are up 24 points.
QUARTER END AND CYPRUS RESOLUTION PROVIDE FUEL FOR HIGHER STOCKS, LOWER BONDS, AND LOWER GOLD
March 25, 2013
This is a short week due to the Easter holiday at the end of the quarter. Short-term performance chasing money managers will attempt to run up stocks. Same money managers will sell bonds, gold and silver.
Cyprus resolution adds fuel to the fire in the same direction as the quarter end window dressing. In window dressing, money managers buy and sell in the last week of the quarter so that they can show their clients that they are holding winners and not losers.
Our back testing shows that it is common for the moves in the last week of a strong quarter to be reversed in the second week of the next quarter. Keep this phenomena in mind if making buy, sell or short sell decisions this week.
Gold futures are at $1591, silver futures are at $28.56, and oil futures are $94.41.
S&P 500 resistance levels are 1565, 1570, and 1575; support levels are 1550, 1537, and 1530.
DJIA futures are up 32 points.
