(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
WINDOW DRESSING MOVES STOCKS AND GOLD UP
September 28, 2012
Yesterday’s move in stocks and gold was mostly related to window dressing. Window dressing involves portfolio managers buying those assets that have done well in the quarter so that they can show their clients that they own the best performing assets. Prime beneficiaries of window dressing were GLD, SLV, and AAPL.
Increasingly window dressing happens on the day before the last day of the quarter to skirt scrutiny by regulators.
There will be some residual window dressing today. Lately Fridays have been up-days. However, there are negative cross currents from Europe. Yields of Spanish bonds are rising again which may bring stocks down.
Gold futures are at $1776, silver futures are at $34.70, and oil futures are $91.77.
S&P 500 resistance levels are 1439, 1444, and 1450; support levels are 1424, 1415, and 1410.
DJIA futures are down 63 points.
MIXED U.S. ECONOMIC DATA AND REACTION TO SPANISH BUDGET
September 27, 2012
A ton of data has been released this morning.
On the positive side Weekly Initial Unemployment Claims came at 359K vs 379K consensus. This is one of our most important leading indicators.
On the negative side Durable Goods Orders fell 13.2% vs a consensus of a fall of 5%.
Q2GDP came at 1.3% vs. consensus of 1.7%.
Spanish budget will enforce more austerity.
Gold futures are at $1764, silver futures are at $34.22, and oil futures are $91.07.
S&P 500 resistance levels are 1439, 1444, and 1450; support levels are 1424, 1415, and 1410.
DJIA futures are up 52 points.
GOLD FALLS AS CENTRAL BANKS BUY BUT THE MOMO CROWD SELLS
September 26, 2012
Gold is down $17 in spite of fresh data from the International Monetary Fund (IMF) that Kazakhstan, Turkey, South Korea, and Russia have recently been buying gold.
Today several analysts are out thumping their chests to buy gold because of central bank buying. What does gold do? It promptly falls $17.
The reason is that the momo crowd has been an aggressive seller of gold this morning.
Yesterday we told you that the momo crowd was spooked about riots in Spain.
Riots in the streets and a lot of bad news — momo crowd responds by selling gold.
This is why risk in gold and silver is high as momo crowd continues to behave contrary to traditional role of gold and silver.
Gold futures are at $1745, silver futures are at $33.56, and oil futures are $90.27.
S&P 500 resistance levels are 1439, 1444, and 1450; support levels are 1424, 1415, and 1410.
DJIA futures are down 11 points.
HOME PRICES RISE LESS THAN EXPECTED
September 25, 2012
Just released July S&P Case-Shiller Home Price Index up only 0.4% vs consensus of 0.9% for the month.
It is important to keep an eye on this index as home builders are prime beneficiaries of QE3. If there is a decline in home builder stocks, that would be a buying opportunity.
Gold futures are at $1773, silver futures are at $34.31, and oil futures are $92.78.
S&P 500 resistance levels are 1465, 1472, and 1480; support levels are 1450, 1444, and 1439.
DJIA futures are up 32 points.
APPLE DISAPPOINTS, GOLD FALLS, MERKEL AND HOLLANDE CLASH
September 24, 2012
Apple has become such a big part of American stock market that stock market indexes are to some extent at the mercy of Apple. Apple is disappointing the market by announcing that only five million iPhone 5 phones have been sold. Some estimates were eight to ten million.
Hollande and Merkel clash on the timing of banking integration in Europe. This is bad news. The momo crowd in gold and silver has not changed their strips. They simply sell on bad news and buy on good news. It is worth remembering that the traditional role of gold is a hedge against bad news. The momo crowd has turned traditional role of gold upside down.
According to the momo crowd, “it is different this time”. Our 30 years of experience in the markets show that vast majority of the time the ‘it is different this time’ crowd is wrong in the medium to long-term.
Support underneath the stock market from option expiration is now gone.
Gold futures are at $1762, silver futures are at $33.90, and oil futures are $91.75.
S&P 500 resistance levels are 1450, 1465, and 1472; support levels are 1444, 1439, and 1424.
DJIA futures are down 45 points.
