China PMI came perilous close to a point that indicates economic contraction and about 10% lower than whisper numbers.
In the U.S. non-farm payroll came at 82K vs. consensus of 168K and whisper number of 120K.
Gold and silver are spiking on hopes of QE3. We still think QE3 unlikely, but Operation Twist may be extended.
Thursday we told you that one of the factors with heavy weight in our models to generate a buy signal in gold and silver is additional monetary easing in the United States and China. Prospects of such easing are now significantly higher than they were only 24 hours ago.
We started giving a buy signal on gold this morning, but only a couple of minutes later when we were ready to publish the signal, gold had already jumped to $1575, nearly $20 above our buy signal. There is heavy resistance in gold between $1575 and $1600.
We also told you Thursday that the risks in gold and silver were to the upside. On a pullback, we may initiate a buy in gold, silver or the miners. We will be carefully watching actions of the Smart Money and the risk profile of each class as it develops before deciding what is a better investment.
As of this writing, S&P 500 futures have now filled the prior gap at 1287 and fallen to 1281.75. The market is very oversold in the short term and may bounce.
Gold futures are at $1576, silver futures are at $27.52, and oil futures are $82.85.
S&P 500 resistance levels are 1287, 1296, and 1300; support levels are 1280, 1272, and 1257.
DJIA futures are down 190 points.
This is being reproduced from the daily morning capsule of ZYX Buy Change Alert.
<EMPHASIS>Disclosure: Nigam Arora is long gold.</EMPHASIS>
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