(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
STRONG EMPLOYMENT DATA IN THE U. S., MORE LIQUIDITY IN EUROPE AND GOLD FALLS
July 5, 2013
This morning the U. S. Department of Labor reported strong employment data. Non-farm Private Payrolls increased by 202K vs 180K consensus. More importantly, hourly earnings in June increased by 0.4% vs. 0.2% consensus.
Yesterday both European Central Bank and Bank of England indicated that they will provide more liquidity. Draghi said that interest rates in Europe could fall further.
The news on monetary policy from Europe is positive for gold. Strong increase in hourly earnings in the U. S. is inflationary and positive for gold, however gold is falling on strong U. S. employment data. The thinking is that the strong data is supportive of the Fed’s plan to taper QE.
The fall in gold on this morning’s data confirms what our algorithms have been telling us– gold and silver are in the control of the momo crowd. The momo crowd at present represents the weak hands.
Although the very, very short-term overbought condition of the U. S. stock market has been relieved, the risk remains high because this will be the first time for the Fed tapering, there is no precedence and there is no hard data to judge how markets will react. It is easy to form and express opinions, but it is impossible to ground such opinions in rigorous analysis because of lack of precedence. In other words, the Fed is about to embark on a new experiment and the results of the experiment cannot be predicted with a high degree of confidence.
Gold futures are at $1220, silver futures are at $19.01, and oil futures are $102.00.
S&P 500 resistance levels are 1607, 1600, and 1575; support levels are 1635, 1650, and 1675.
DJIA futures are up 155 points.
OIL OVER $101 ON EGYPT TURMOIL, CRISIS IN PORTUGAL, NO SAFETY FLIGHT TO GOLD
July 3, 2013
Turmoil in Egypt has caused oil to cross $100. Egypt produces very little oil, but Suez Canal is very important to oil shipments.
In Portugal, the Foreign Minister, Paulo Portas resigned over austerity policies. On Monday, Finance Minister, Vitor Gaspar has also stepped down. The concern is that the government will not survive. Stocks in Portugal fell 6.5% overnight.
Traditionally a flight to gold under these circumstances would have been expected, but none has taken place so far. This indicates that many market participants no longer view gold and silver as safe havens from crisis.
Gold futures are at $1249, silver futures are at $19.76, and oil futures are $101.49.
S&P 500 resistance levels are 1607, 1625, and 1635; support levels are 1575, 1570, and 1565.
DJIA futures are down 45 points.
QUIET MORNING ON A HOLIDAY SHORTENED WEEK
June 2, 2013
Quiet morning on a holiday shortened week.
Gold futures are at $1252, silver futures are at $19.58, and oil futures are $98.76.
S&P 500 resistance levels are 1625, 1635, and 1650; support levels are 1600, 1575, and 1570.
DJIA futures are down 15 points.
NEW QUARTER MONEY FLOWING INTO STOCKS AND COMMODITIES INCLUDING GOLD
July 1, 2013
Typically, during the first three days of the quarter, money flows into the market. Today is no exception. Money is flowing into stocks and gold. Even copper that has been depressed is running up this morning. However, the true test will be earnings which are just ahead.
Gold futures are at $1240, silver futures are at $19.57, and oil futures are $97.86.
S&P 500 resistance levels are 1625, 1635, and 1650; support levels are 1600, 1575, and 1570.
DJIA futures are up 78 points.
