Monday, April 25, 2011

Slowest Trading Day of 2011 Marks Beginning of End

Just when you thought trading volume could not possibly get any lower, along comes the Easter Bunny, leaving along his trail melted chocolate and some mysterious objects that look like little raisins.

And he littered these all over Wall Street, apparently, because on the day after the holy holiday, traders were seemingly not in much of a mood for anything. The range on the Dow was disturbing - a mere 60 points from top to bottom, and the most-widely-watched index in the world registered another loss, breaking a string of four straight session gains.

The NASDAQ was the only index to finish on a positive note, though the gains were negligible.

The stark reality of a dormant US and global economy and the coming end to the Fed's generosity, with QE2 supposedly finished sometime in June, may have marked a final turning point for the markets. Stock values are stretched thin, all of the indices are at or near two-year highs and there's little catalyst besides momentum stocks like Apple and Netflix. It's almost impossible to predict anything other than a sullen summer downturn ahead, driven largely by the fiasco in Washington over raising the debt ceiling and the upcoming 2012 budget battle.

With that, investors and traders left the floor today on the low volume point of 2011. Trading could likely have been handled by three accountants with pencils, abacus and ledgers rather than the monstrous computer banks allocated to handle what used to be "the usual" flow.

Dow 12,479.88, -26.11 (0.21%)
NASDAQ 2,825.88, +5.72 (0.20%)
S&P 500 1,335.25, -2.13 (0.16%)
NYSE Composite 8,485.25, -19.11 (0.22%)

Decliners outweighed advancing issues, 3556-2998. On the NASDAQ, new highs topped new lows, 122-21, while on the NYSE, there were 212 new highs and a mere 20 new lows recorded. As mentioned above, there simply was no volume.

NASDAQ Volume 1,486,734,000.00
NYSE Volume 3,223,292,250

Energy traders shared the disinterest with their equity brethren, pushing the price of crude oil down a whole penny, to $112.28. Precious metals were an entirely different story, though, as gold reached a high of $1519.30, before being smashed down, but still finishing with a win, up $5.30, to $1,509.10 at the close. Silver followed a similar flight path, nearly braking the $50 barrier, at $49.85 before pulling back to close at $47.15, still a gain of $1.09 over Friday's close.

That the metals are about to run away from the rest of the commodity picture should come as no surprise as the current state of affairs in all things concerning fiat money are looking mighty suspect, as they have for the past two years. There will certainly be another blow-up crisis of some kind, though the "experts" in charge of killing the middle class hope against reality that this one will not be as severe as 2008, because the system - and the people - will not contend with it.

We are closing in quickly on what may be the last days of the great nations and their experiments in fiat money not backed by anything, centralized planning and their dual Ponzi schemes of finance and pension funding. The stage has been set by the Fed bingeing at the free money tap; all that's needed to tip the entire global system over is a nudge from some disgruntled citizens in France, the UK, Germany or the US, maybe even China. That nudge may be in the form of gas prices over $4.00 a gallon, though it would seem that $5.00 is the tipping point at which people abandon their vehicles and head for the nearest bastion of government authority, torches and pitchforks in hands.

It's coming, and very well-deserved.

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