Bears were busy chattering away on Thursday as any dip from the 2100 level is being seen by many bearish analysts as the start of the “next drop” caused by fallout from the Brexit vote. Bears remain confounded by the strong recovery rally from the plunge to 2000 in the S&P following the Brexit vote.
Thursday’s decline in stocks was primarily investors preparing for the unemployment report on Friday. A lot of profits were being taken ahead of Friday’s numbers as some investors just want to “make sure” of some gains in case the numbers send the market lower.
Oil Prices Decline
Oil prices declined on Thursday but data showed crude inventories actually fell less than expected last week so the drop in oil prices may be premature. Still this opened up some trade possibilities in a number of oil companies which I mentioned in the afternoon Intraday Chart Analysis for today.
Brent crude futures were down 4.9 per cent, at $46.40 per barrel marking the biggest one day drop since February 9 2016. West Texas Intermediate closed down 4.8 percent to $45.14. During the day they reached a two-month low at $44.87.
Treasuries Down
Treasury Bonds and Notes eased slightly as did gold despite tomorrow’s unemployment numbers.
Gold and Silver
Gold pulled back slightly today. U.S. gold futures for August delivery were lower by 0.4 percent, at $1,362.10 per ounce. Much of the rally in gold is a direct result of the Brexit “leave” vote and investor uncertainty over where this will leave the EU.
The GLD ETF is about the only Gold ETF I trade in. Gold continues to remain in an uptrend and with the Brexit fallout continuing to keep investors on edge, gold probably will stay high and move higher.
The GLD ETF has done very well for my portfolio this year as has Barrick Gold Stock. (ABX)
GLD ETF – 12 Month Chart
AGQ ETF
While gold is doing well, silver is on a tear. I have received a lot of emails since January from investors who are using the 4 Investment Strategies for Ultra ETFs to profit in AGQ ETF. AGQ is the ProShares Ultra Silver ETF that provides 200% (twice) of the daily move in the price of silver. There is a lot of support in the $30 valuation range for this ETF. Since April silver has been rising and this ETF is up 76%!
Today AGQ fell 4.47% to $51.96 as silver pulled back however many analysts are of the opinion silver is set to move to $25 an ounce. I believe the US dollar will have to fall back for that to happen but metals are difficult for any investor to judge. The 4 Investment Strategies for Ultra ETFs focuses on capital preservation as well as profiting from AGQ’s volatility.
AGQ ETF 12 months to July 7 2016
Tomorrow’s Jobs Numbers
On average analysts believe the US economy has added 170,000 jobs in June. Much of this analysis is based on the Weekly Initial Unemployment Insurance Claims for the past month which showed continued job growth.
May was a bit of a stunner for economists and investors as it showed the worst job growth in 5 years at just 38,000 jobs. Economists are split on June’s numbers. Many believe May was not an anomaly whereas others think it was as June will show the US economy is back on track. A lot of economists think May’s numbers will be upgraded tomorrow with the release of June’s numbers.
Any further “stunners” as to job growth tomorrow and stocks are sure to move lower.
Stock Market Outlook The Close
The end of the day saw stocks just slightly lower despite all the “bearish chatter” when stocks fell back to 2090 on the S&P. The S&P closed at 2097.90 down 1.83 and the Dow down 22.74 to 17,895.88 but still well within easy reach of a move back above 18000. The NASDAQ closed up 17.65 points at 4876.81.
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