Today was another in a seemingly-endless series of ridiculously small gains or losses for stocks, but, if one looked at the major indices early in the day, one would have thought any kind of gain or even getting close to unchanged was out of the question.
Stocks sold off right at the open, but suddenly, miraculously, once the Dow bottomed out with a 100-point loss, the entire market reversed and headed higher.
Some of the commentary surrounding the market reversal seem to suggest that it was due to the NAR's release at 10:00 am ET of pending home sales, which witnessed a 2% gain in January. Such commentary should be immediately dismissed as pure rubbish, for a number of reasons, the first being that real estate is such a small sliver of the US economy - and generally divorced from stocks - that the number doesn't move the Dow 120 points. Also, the January gain comes on the back of a 1.9% decline in December, and the warm weather this winter likely threw off all of the NAR's seasonable adjustments.
Probably the utmost reason that the theory concerning the move upward for the Dow being caused by pending home sales should be disregarded is that the bottom and subsequent move higher occurred 15 minutes before the NAR news. The Dow was already nearly 40 points off the bottom by 10:00 am.
No, the turnaround was more than likely the result of pump-priming by a gang of primary dealers, who, in a lightly-traded market, as this is, have more than enough firepower to move stocks in any direction they please, and the current pleasure is being positive, as it almost always is. The idea that the the major brokerages and big banks would like to engender more participation from individual investors, who have lost faith in Wall Street since the financial crash of '08 and haven't returned, is real, and the best way to get investors back in the mood - in the small minds of big bankers - is to manufacture rallies, such as the current one, which is about a 25% move since the start of October.
The trouble for the bankers is multitudinous. Nobody believes in their ways of doing business; there isn't enough disposable income in most households to really consider stocks as investments; there are too many headwinds, like Greece, the rest of Europe, Iran, high gas prices, lingering unemployment and more, and; the market sure looks toppy at this juncture.
Lastly, volumes for the better part of the last two months have been nothing but pathetic. Today was more of the same, so trying to entice individual investors back in is akin to finding volunteers for cliff diving. It looks dangerous, and nobody wants to go first.
To get an idea of how stalled out this market has become, consider that on Friday, February 17, the Dow closed at 12949.87 and today at 12,981.51. That's a move of less than 32 points in five days, and the repeating pattern of being down in the morning only to rally at some unknown time - though also in the A.M. - isn't exactly an inspiring feature.
So, after spending most of the day above the 13,000 mark on the Dow, the cheerleaders at CNBC will have to root again tomorrow, for the seventh day in a row.
Over the weekend, financial representatives of the G20 nations met in Mexico and came up with the notion that Europe needs to erect a $2 trillion financial "firewall" to keep its contagion from spreading. That's all they seem to know how to do, these top-level bureaucrats, spend money to keep Europe's debt conflagration from inflicting collateral damage. Next time you hear the word "firewall" your response should be "stupid," because a firewall, by definition, is purposely set up to keep everything enclosed. In other words, anything inside the firewall will burn to a crisp. The term, and the idea are almost as revolting and ignorant as the much-bantered-about term, "ring-fence."
Now that the globalist elitists have their global economy and things aren't going so well, they want to revert to feudalism. Well, at least, via their ancestry, it's something they actually understand.
And, finally here's a story about a one-percenter, a rich banker, leaving a waitress a - you guessed it - a one percent tip. Talk about callous.
Dow 12,981.51, -1.44 (0.01%)
NASDAQ 2,966.16, +2.41 (0.08%)
S&P 500 1,367.59, +1.85 (0.14%)
NYSE Composite 8,143.56, -8.41 (0.10%)
NASDAQ Volume 1,761,845,125
NYSE Volume 3,492,574,750
Combined NYSE & NASDAQ Advance - Decline: 2682-2894
Combined NYSE & NASDAQ New highs - New lows: 230-25
WTI crude oil: 108.56, -1.21
Gold: 1,774.90, -1.50
Silver: 35.52, +0.19