(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
EARLY SHORT SQUEEZE
Expect an early short squeeze in stocks as shorts scramble to cover.
Our very, very short-term early market indicator is strong positive.
Aggressive short coverage is taking place in oil.
Aggressive selling is taking place in bonds.
Smart Money is lightly selling gold.
Gold futures are at $1239, silver futures are at $17.35, and oil futures are $82.87.
S&P 500 resistance levels are 1875, 1900, and 1925; support levels are 1850, 1832, and 1811.
DJIA futures are up 174 points.
CLOSELY WATCH 1763-1785 IN S&P 500
Our very, very short-term early market indicator is strong negative.
If S&P 500 falls below 1800, many stop loss will be triggered. If such stop loss triggering makes the market cascade down in the zone of 1763 – 1785, depending upon your risk preference and individual portfolio situation, consider stepping up to the plate and initiate or add to your favorite stocks on the long side, and buy to cover on the short side.
Please remember that no one and no method can call the bottom with certainty. The best that can be said is that for the long-term investor these are reasonable levels to scale in. Even if the market goes to those levels, it is still important to hold a fair amount of cash and maintain a defensive posture. In other words, buy or buy to cover cautiously without going overboard.
Gold futures are at $1238, silver futures are at $17.30, and oil futures are $79.74.
S&P 500 resistance levels are 1832, 1850, and 1875; support levels are 1811, 1800, and 1763.
DJIA futures are down 187 points.
FEAR GRIPS THE MARKETS
This morning fear is gripping stocks, bonds, and oil. Usually gold is the first market to respond to fear, but so far the reaction from gold is muted, but this may change as the day progresses.
For astute investors, fear in the markets is a good thing because it allows them to buy good positions at favorable prices and take profits on shorts at good prices.
The main source of fear among the institutional investors is the economic numbers that were released this morning. Here are the numbers to fear…
- Core PPI came at 0.0% vs. 0.1% consensus. This is raising the specter of deflation.
- Retail Sales ex-auto came at -0.2% vs. +0.3% consensus. We are not concerned about this metric at this time because gas prices are falling and that is like an extra Christmas present for consumers.
- Empire Manufacturing came at 6.17 vs. 20.4 consensus.
- WTI crude falls below $80.
Fear among retail investors is stemming from the new Ebola case in Dallas this morning.
Interest rates are falling fast and bonds are rising as institutional investors begin to think in terms of deflation and recession.
A lot of technical selling in early trading oil.
Our very, very short-term early market indicator is strong negative.
Gold futures are at $1235, silver futures are at $17.30, and oil futures are $79.45.
S&P 500 resistance levels are 1875, 1900, and 1925; support levels are 1850, 1832, and 1811.
DJIA futures are down 155 points.
OVERSOLD STOCKS AND OVERBOUGHT BONDS
In the very short-term, stocks are oversold and bonds are overbought. If no reversal of downside momentum is seen at this oversold point in stocks, that will be negative for stocks.
Our very, very short-term market indicator is mild positive.
Gold is trying to break out.
Oil is very oversold and trying to bounce.
Interest rates are falling further.
Gold futures are at $1234, silver futures are at $17.49, and oil futures are $84.17.
S&P 500 resistance levels are 1900, 1925, and 1950; support levels are 1875 and 1860.
DJIA futures are up 59 points.
U.S. STOCKS FOLLOW TURN AROUND IN EUROPEAN STOCKS
The U. S. stocks are following the turn around in European stocks.
Our very, very short-term pre market indicator is neutral.
Interest rates, oil and gold are range bound.
Gold futures are at $1228, silver futures are at $17.38, and oil futures are $84.10.
S&P 500 resistance levels are 1900, 1925, and 1950; support levels are 1875 and 1860.
DJIA futures are up 25 points.
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