Monday, September 17, 2012

Markets Close Down 15th Monday Out of Last 16

Despite the aggressive easing action by the Fed last week, today's session was marked by broad-based selling on low volume, the 15th consecutive Monday of the last 16 in which the markets turned lower for the day.

It is one of the odder trends in the markets these days, but is most likely tied to HFTs and the macro-analysis upon which markets currently depend. There was once a time in which everything didn't fall or rise in unison, perfectly predictable, dependent upon headlines, but that has been the regime - for the most part - since the financial crisis of 2008. Nothing's been repaired and market participants merely follow the herd, which, truth be told, has been a most profitable trade since March 2009, with stocks close to all-time or multi year highs.

Another oddity carried forth today was how the NYSE Composite took on roughly twice the water than the other indices, on a percentage basis. Apple (AAPL) kept the NASDAQ and S&P at relatively minimal losses, while the Dow Industrials were boosted by consumer stocks (Coca-Cola (KO) and McDonald's (MCD)), big phrama names, Merck (MRK) and Phizer (PFE), all of which bucked the trend and closed on the upside.

All of the major indices finished well off their lows, with a short-covering spike sending all off what were the lows of the day, in the final hour of trading.

There was little in the way of economic data - as if the markets would have cared anyway - except New York's Empire Manufacturing Index, which fell to -10.4, its lowest level since November, 2010. It followed the recent trend of other Fed regional indices, sporting sub-par results. With that in mind, it's little wonder that the Fed decided last week to go all in on what some are calling QE-infinity.

Financial markets are a complete farce now, and have been pretty much since the 2008 crash. The Federal Reserve's insistence to sop up the remains of old and recently-issued MBS truly points up the dilemma faced by central banks and sovereign government entities.

With the Fed becoming the world's largest landlord-by-proxy, the rally cry of "free houses for everyone!" has taken on new and even more cynical meaning.

In a move that can only be captioned by the phrase, "well, it's about time," crude oil skidded more than $3.00 before recovering slightly.

Dow 13,553.10, -40.27 (0.30%)
NASDAQ 3,178.67, -8.46 (0.27%)
S&P 500 1,461.19, -4.58 (0.31%)
NYSE Composite 8,408.92, -49.96 (0.59%)
NASDAQ Volume 1,428,619,250
NYSE Volume 3,135,453,500
Combined NYSE & NASDAQ Advance - Decline: 1883-3624
Combined NYSE & NASDAQ New highs - New lows: 228-26
WTI crude oil: 96.62, -2.38
Gold: 1,770.60, -2.10
Silver: 34.37, -0.29

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