(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
MAJOR SUPPORT AT S&P 1900, LOOKING FOR A FLUSH
Yesterday we shared with you that historically short covering rallies, like the one on Wednesday, do not last. One more time the historical pattern has held true, yesterday the market gave back all the previous day’s gains plus more. S&P 500 is approaching major support at 1900. This morning futures traded as low as 1910 before bouncing.
We are looking for a flush. A flush is when some money managers cry ‘uncle’ and sell. This action artificially depresses prices temporarily.
As always, the plan is take advantage of the flush by taking profits on existing short positions, lifting hedges on long only portfolios, and deploying cash to start new positions or add to existing positions.
Gold is having difficulty sustaining its rally.
Oil continues to fall.
Interest rates continue to inch lower.
Our very, very short-term early market indicator is neutral.
Gold futures are at $1223, silver futures are at $17.32, and oil futures are $83.39.
S&P 500 resistance levels are 1950, 1975, and 2000; support levels are 1900, 1875, and 1838.
DJIA futures are down 12 points.
VICIOUS SHORT COVERING IN STOCKS, BONDS, AND GOLD ON THE FED FEARING ITS SHADOW
Immediately after 2:00 pm ET, when FOMC minutes were released, our algorithms detected a vicious short squeeze in stocks, bonds and gold. The short squeeze has persisted through the evening and into this morning.
A careful study of the FOMC minutes show that the FED fears its own shadow; for the first time since 2008 our analysis is that the FED is lost. Only time will tell if this is the result of leadership passing on from an extremely intelligent and resolute Bernanke to Yellen.
Our algorithms have seen no buying by Smart Money in stocks, bonds or gold.
History tells us that these types of rallies sucker in less informed traders on the long side and eventually prove to be traps. Again only time will tell if it is different this time.
Our very, very short-term early market indicator is neutral with a slight negative bias.
Gold futures are at $1227, silver futures are at $17.51, and oil futures are $86.21.
S&P 500 resistance levels are 1975, 2000, and 2017; support levels are 1925, 1900, and 1875.
DJIA futures are down 26 points.
CORRECTION IS GOOD FOR ASTUTE INVESTORS, AGGRESSIVE BUYING IN GOLD BY THE MOMO CROWD
The biggest enemy of astute investors is froth in the market. Corrections are healthy because they get rid of the froth and generate better opportunities for astute investors.
This morning the momo crowd is aggressively buying gold and silver. The rationale seems to be a successful test of the prior low in gold.
Oil is dramatically selling off.
Interest rates are maintaining dramatic drop from yesterday.
After a big sell off in stocks, our very, very short-term early market indicator is mildly negative.
The key for the day will be short covering and FOMC minutes.
Gold futures are at $1210, silver futures are at $17.33, and oil futures are $86.80.
S&P 500 resistance levels are 1950, 1975, and 2000; support levels are 1925, 1900, and 1875.
DJIA futures are down 14 points.
TREPIDATION AHEAD OF EARNINGS AND FOMC MINUTES
There is significant trepidation among market participants ahead of FOMC minutes that will be released at 2:00 pm ET tomorrow and forthcoming earnings. At this time, ISIS and Ebola are not factors, ignore cable news pundits.
Our very, very short-term early market indicator is negative.
Oil and interest rates are range bound.
Gold is holding above $1200 in a short squeeze.
Gold futures are at $1206, silver futures are at $17.32 and oil futures are $89.07.
S&P 500 resistance levels are 1975, 2000, and 2017; support levels are 1925, 1900, and 1875.
DJIA futures are down 37 points.
START OF THE EARNINGS SEASON, DRAMATIC CHANGE OF FORTUNES IN BRAZIL
Earnings season is starting and will be the prime driver of the stock market.
In a dramatic reversal of fortunes, Silva placed third in Brazil elections and pro business Neves surged to the second place. Brazilian stocks are rocketing up.
Our very, very short-term early market indicators are positive.
Gold is trying to stage a rally.
Oil and interest rates are range bound.
Gold futures are at $1197, silver futures are at $17.07, and oil futures are $88.58.
S&P 500 resistance levels are 1975, 2000, and 2017; support levels are 1950, 1925, and 1900.
DJIA futures are up 73 points.
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