Wednesday, October 31, 2012

Wall Street Reacts to the Devastation of Hurricane Sandy with Flat Session

It's morally repugnant that Wall Street would profit from the human suffering of others, though, in reality, it happens all the time. Stocks go up and down on the fortunes and foibles of people, many integral parts of larger corporations.

Thus, it was a time of joyous celebration for the professionals trading at the New York Stock Exchange that, for the first time in two days, equity markets were actually up and functioning. But, that euphoria, which resulted in a wholly predictable, end-of-month window dressing rally at the open, soon turned an eye toward the reality of the devastation and destruction left behind by hurricane Sandy.

Most of lower Manhattan is still without power, the NYSE operating off backup generators, and most of the areas contiguous to Wall Street for many miles to the North, South, East and West, are just beginning to evaluate the extent of the losses.

Most of the New Jersey coast is either underwater, under piles of sand or otherwise devastated; Long Island is a crushed, mangled mess as is Connecticut and most of the other New York boroughs.

Many in the area are still without power, which is slowly returning to some areas, but the losses sustained by people and companies is only now beginning to be felt. Restoration and reconstruction will take months and billions of dollars, the hit to the economy unmistakable, as Wall Street fully understands and began coming to grips with as stocks began to slide shortly after the initial burst leveled off at about 80 points to the good on the Dow.

The rapid turnaround was classic Wall Street hustle, as fund managers snapped up shares at the open to close their books for the month - some for the year - while the sharpies were already shorting the very same shares. There's profit to be made on the downside, and the environment is target rich and ripe for plucking by short-sellers, call sellers and put buyers.

By 10:30 all of the major indices were trading in negative territory, led by the NASDAQ, which itself was brought down by particularly vicious selling in Apple (AAPL), in the aftermath of the firing of two top executives by CEO Tim Cook. It's becoming apparent to everyone that the loss of Steve Jobs was not only a human tragedy, but nobody is there to replace his unique genius and business acumen.

In Europe, which remained open for business as usual over the past two days of Wall Street's shutdown, stocks were mostly down on Monday, up on Tuesday and rallying early Wednesday until finally giving up the ghost late in the sessions, the major indices - England's FTSE, Germany's DAX and France's CAC - all closing lower.

Just about 12:30 pm EDT, a reminder of just how tenuous the entire situation around New York was came from Knight Capital, when the firm, operating under backup power in Jersey City, was forced to shut down for the day, citing that their generators were failing.

Volumes were moderate, considering that many traders were without proper equipment, cell phone service spotty and some traders actually functioning from alternate locations, at home or at satellite offices, though, by the close, the volume ramped up, and the day was one of the better recent volume sessions.

Midday, stocks balanced just above the lows of the session, but buying was timid. As has been the usual mode of operation around Wall Street, traders generally ignored the world around them, sending the S&P and Dow back into positive territory in the final hour, as if nothing at all had occurred, but the move proved unsustainable.

As it has for the past four sessions running, the major indices finished mostly flat, which is patently absurd, as there are corporations taking serious losses from the storm. Reality may set in as time carries onward, but there's no telling how the detached traders in lower Manhattan will treat what will eventually turn out to be one of the costliest natural disasters of all time.

Perhaps the psychology of the control crowd is to not panic, despite evidence to the contrary as pertains to investments, but there is a price to be paid, though, as usual, the analysts will simply lower their expectations for all, and when those are exceeded, will celebrate the great success of what are more and more becoming hollowed-out shells of companies.

There will be days if not weeks of lost productivity, wages and competitiveness across six states: Delaware, Maryland, Pennsylvania, New York, New Jersey and Connecticut. Smaller pockets of destruction have hit West Virginia (blizzard) and some New England states, such as Rhode Island, New Hampshire, Vermont, maine and Massachusetts.

Getting markets up and running is a fine accomplishment, but registering a slight decline is almost laughable, if the thought of it weren't so warped and disturbing.

Dow 13,096.46, -10.75 (0.08%)
NASDAQ 2,977.23, -10.72 (0.36%)
S&P 500 1,412.16, +0.22(0.02%)
NYSE Composite 8,221.40, +31.20(0.38%)
NASDAQ Volume 1,806,794,500
NYSE Volume 3,542,963,500
Combined NYSE & NASDAQ Advance - Decline: 3106-2429
Combined NYSE & NASDAQ New highs - New lows: 198-124
WTI crude oil: 86.24, +0.56
Gold: 1,719.10, +7.00
Silver: 32.32, +0.50

Monday, October 29, 2012

Hurricane Sandy Shuts Down Equity Markets

It took the forces of nature to do what the SEC, government or any other "higher" power couldn't: shut down Wall Street.

Hurricane Sandy, a category 1 hurricane due to make landfall around Atlantic City New Jersey around 6:00 pm EDT, caused the NYSE and NASDAQ to shut down on Monday without even opening. Futures closed at 9:15 am EDT, with the major indices showing moderate, though not devastating, losses.

In New York, Mayor Bloomberg ordered the closure of all subway systems, and evacuated roughly 375,000 residents from lower Manhattan.

Though the storm did not reach landfall until markets would have already closed, high winds and storm surge were expected to cause damage in lower Manhattan, while most of the Eastern seaboard was inundated throughout the day with high surf and damaging winds.

Later in the day, the exchanges decided to remain closed on Tuesday. It is the first time since 1888 that stock markets were closed due to weather for more than one day in succession.

Also in question are various corporate earnings reports. Many which were due out on Monday have been rescheduled for release and there is a rumor circulating that Friday's non-farm payroll report for October would also be delayed. It is the final jobs report before the election next Tuesday.

Other exchanges, for bonds, Forex and commodities were open or closed or offered limited sessions and some plan to open on Tuesday while others will not. The situation is rather - pardon the pun - fluid.

WTI crude oil: 85.54, -0.74
Gold: 1,708.70, -3.20
Silver: 31.74, -0.291

Friday, October 26, 2012

Flat, Nowhere to Go, Markets Stall

It's really difficult to put into words just how... searching... searching... searching for the right word... inconsequential (?) this stock market is.

Following today's non-action - up, down, up and then flat at the close - one can only assume that the machines are fully in charge, skimming nickels and dimes off trades for their human masters, the Goldman Sachs and Merrill Lynchs of the world.

For the rest of us, nothing. If the market really does hate indecision, how much does it hate not being able to adequately define itself.

Ponder that over the weekend while hurricane Sandy gets ready to pound the East coast. It should arrive on Wall Street just in time for Tuesday's opening bell. Nothing like a major natural disaster to get those "animal spirits" flowing. Should be good for 10 or 12 points on the Down Jones Industrials (no, that was not a typo).

Have a happy weekend. This blogger is headed for happy hour, because nothing beats being happy. LMAO

Fiscal Cliff. Just in case any bots are looking.

Dow 13,107.21, +3.53 (0.03%)
NASDAQ 2,987.95, +1.83 (0.06%)
S&P 500 1,411.94, -1.03 (0.07%)
NYSE Compos... 8,190.17, -21.74 (0.26%)
NASDAQ Volume 1,766,343,750
NYSE Volume 3,233,096,000
Combined NYSE & NASDAQ Advance - Decline: 2267-3160
Combined NYSE & NASDAQ New highs - New lows: 102-92
WTI crude oil: 86.28, +0.23
Gold: 1,711.90, -1.10
Silver: 32.04, -0.042

Thursday, October 25, 2012

Dull Trading Session, But Apple, Amazon Ignite After-Hours Fireworks

The wall of worry the market climbed all summer is quickly turing into a slippery slope of dissatisfaction, mostly with corporate earnings, and, over the past few days, the accelerating pace of layoffs, something the market hasn't dealt with in any size since 2010.

Stocks opened gap up, quickly decelerated and spent the majority of the session hugging the flat line. Only in the final 15 minutes did all of the indices turn sharply positive, if gains of 0.30% or so can be called sharp, though considering the growing number of earnings misses, is probably the best that could be expected.

There was a definite expression of waiting and hoping in the sentiment today, with few traders staking out new positions in advance of earnings releases by tech giants Amazon (AMZN) and Apple (APPL), both due out after the bell.

Amazon reported just minutes after the close of markets, putting up some god-awful numbers, short on revenue at 13.81 billion when the street was looking for 13.92, and a 23 cent loss ex-items on expectations of an eight-cent dip. Including one-time charges, Amazon's loss was 60 cents per share. Investors were not pleased and immediately sent the stock careering down seven percent in after hours trading.

Shortly thereafter, Apple reported earnings of $8.67 per share for its fiscal fourth quarter, less than the consensus estimate of $8.75. Revenues came in at $35.96 billion, above the $35.8 billion that analysts had sought. Share traded about one percent lower in extended trading.

Weakness in the two tech retailers was not entirely unexpected, though in Amazon's case, the loss was quite a bit on the downside, setting up for an interesting day Friday on the NASDAQ where both Amazon and Apple trade.

Dow 13,103.68, +26.34(0.20%)
NASDAQ 2,986.12, +4.42(0.15%)
S&P 500 1,412.97, +4.22(0.30%)
NYSE Composite 8,211.87, +32.61(0.40%)
NASDAQ Volume 1,846,098,130
NYSE Volume 3,447,291,500
Combined NYSE & NASDAQ Advance - Decline: 3231-2256
Combined NYSE & NASDAQ New highs - New lows: 141-98
WTI crude oil: 86.05, +0.32
Gold: 1,713.00, +11.40
Silver: 32.08, +0.458

Wednesday, October 24, 2012

Dead Cats Don't Bounce; No Joy in Fraudville; Stocks Continue Slide

Maybe, as the movie title suggests, white men can't jump, but Wall Street proved today that dead cats don't bounce... at least not very high.

Stocks got a little bit of a boost from futures pumping prior to the opening bell, but the dismal nature of earnings for the third quarter made any gains transitory, fleeting and utterly disappointing (much like a lot of people in this author's life).

It is as it should be, perhaps. Fed policies do not a market make, so the major indices are now well below the levels encountered when the Chairman, the pseudo-salubrious Ben Bernanke, announced QE3, or, rather, QEtc. or QEternity on September 13.

The prescription the good doctor of economics gave the markets was unlimited buying of mortgage-backed securities (MBS), those ubiquitous instruments of mass financial destruction that essentially started the whole financial and economic mess in the first place, and which will, almost without doubt, end up worth less than what the Federal Reserve pays for them.

With any luck, the Fed's foray into economic wonderland, replete with diamond-farting unicorns and frogs that belch profits, will end in tears and anguish for not only the lower and middle classes, but the rich and self-appointed masters of the universe as well. We wish them no luck, because tactically, they have erred in their assessment of the global economy, not once or twice, but repeatedly since the advent of the crisis in 2007 or 2008, take your pick.

Today's FOMC rate policy decision was another non-event, the Fed reiterating that it would stick to its plans until 2015, which would be long after the chairman has departed, ostensibly in early 2014, should he even last that long.

The market is more interested these day in politics and earnings, each of which offering a mixed bag of blessings or banes, so precarious is the global outlook. Fears are rising that President Obama will win re-election, though the real fears are over the poor earnings reports pouring into the street like so many viperous snakes ready to bite the legs of impudent investors standing still.

Layoff announcements from Ford, Dow Chemical and Volkswagen were only whispered on Wall Street today. In the coming months, workforce reductions will be major headlines as all attempts to revive the economy the banks destroyed will ultimately fail. Europe is sinking steadily deeper into a black hole of debt and deflation, with Asia following soon, and the US - the last bastion of relief in a sea of declining opportunity - to join them in the hell of destroyed currencies and wrecked economies within short order.

Stocks have levitated for months, but the handwriting is clearly written and the game is nearly up. The US elections of November 6 mark a turning, a reckoning that will be absolute and without reprieve. All of the Merkels, Bernankes, Legardes and Draghis of the world cannot resurrect that which was already dead when they first took notice.

While there may be a few days of brightness ahead in the near future for stocks, to outlook continues to deteriorate and today's market action verifies the quietly-held beliefs of the skeptics: all is lost.

There is no joy in Fraudville; mighty Bernanke has struck out.

Dow 13,077.34, -25.19 (0.19%)
NASDAQ 2,981.70, -8.76 (0.29%)
S&P 500 1,408.75, -4.36 (0.31%)
NYSE Composite 8,179.26, -16.05 (0.20%)
NASDAQ Volume 1,965,715,000
NYSE Volume 3,346,029,500
Combined NYSE & NASDAQ Advance - Decline: 2404-3120
Combined NYSE & NASDAQ New highs - New lows: 97-94
WTI crude oil: 85.73, -0.94
Gold: 1,701.60, -7.80
Silver: 31.62, -0.173

Tuesday, October 23, 2012

Stocks Socked Again on Earnings, Revenue Misses

Today's decline had no end-of-day rally from which to save itself. Stocks were down from open to close, and hard, owing mostly to a continuing spate of earnings disappointments and negative guidance outlooks.

Today's main culprits were a trio of Dow components, DuPont (DD), 3M (MMM) and United Technologies (UTX), though DuPont was clearly the worst of the bunch, recording a third quarter profit of just one cent per share, far below analyst estimates of 46 cents per share.

That report, early in the morning, hours before the market opened, sent futures crashing, so that the Dow opened with a triple digit loss in the first minutes of trading. Stocks could not recover, as it is quickly becoming clear that corporate earnings and revenues are lacking - 60% of companies reporting thus far have missed revenue estimates, many of which have been radically lowered. Meanwhile, Europe's woes continue to weight on markets globally, as the bourses across the continent showed heavy losses again.

The race for president also added to investor dismay, the predominant thinking that President Obama clearly outclassed challenger Mitt Romney in Monday night's final debate, focused on foreign policy, an obvious weak spot for the Republican. According to the best guesses on investor sentiment concerning the election, an Obama victory would be bad for stocks, because Obama favors more regulation and higher taxes for high wage earners, while Romney would likely favor policies which generally leave the status quo alone, allowing the abuses of the rich to continue and the wealth gap to widen.

All politics aside, it is actually fundamentals - for a welcome change - that are driving the most recent declines. Companies are reporting an assortment of earnings misses and sour outlooks for the remainder of 2012 and 2013, based almost entirely on current conditions, which have consumers strapped, governments broke and debt levels for all, unsustainable.

Where stocks will go from here is unknown, though all of the major indices have broken below their 50-day moving averages, generally a sign of more bad days to come.

Additionally, the advance-decline line has deteriorated badly over the past week, as has new highs-new lows, finally capitulating, with new 52-week lows outpacing new highs, 129-53

Dow components reporting on Wednesday include AT&T (T) and Boeing (BA), just a pair in a slew of over 400 companies that will be reporting throughout the day. Both of the Dow components report prior to the market open.

The silver lining in the recent declines is the slump in oil and gas prices. Motorists are already seeing 12-15 cent reductions in the price of a gallon of regular gas, with more easing to come, as crude oil is in the midst of a severe mean reversion, which could bring the cost of a gallon of gas to below $3.00 in some areas.

A reduction in the price of gas could be just what the market needs in time for the holidays, critically important to markets and, well, kids.

Dow 13,102.53, -243.36 (1.82%)
NASDAQ 2,990.46, -26.50 (0.88%)
S&P 500 1,413.11, -20.71 (1.44%)
NYSE Composite 8,197.14, -132.05 (1.59%)
NASDAQ Volume 1,780,896,750
NYSE Volume 3,233,623,000
Combined NYSE & NASDAQ Advance - Decline: 1709-3814
Combined NYSE & NASDAQ New highs - New lows: 53-129
WTI crude oil: 86.67, -1.98
Gold: 1,709.40, -16.90
Silver: 31.79, -0.459

Monday, October 22, 2012

Stocks Erase Losses in Final Hour, Again

Chartists, throw away all your tools and theories. Today, the Dow Jones Industrial Average fell 100 points below its 200-day moving average, spent almost the entire day in negative territory - as did the S&P - yet both averages finished positive, wiping out the day's losses in the final hour of trading on absolutely no news, no rumors, nothing. The only thing that kept the NASDAQ afloat was Apple (APPL).

We've entered new territory, new levels of fraud and collusion and the politicization of markets.

It is an absolute sham. Casual and seasoned investors alike should have pulled all money out of these monkey markets long ago, but the repeated "savior" late day rallies are nothing but pure manipulation by insiders.

Corporate profits have been routinely weak this quarter, yet the major indices refuse to reflect reality in their prices. All price discovery mechanisms have been shattered by the continuous manipulation of markets since the crash of 2008.

Anyone wishing to hold the nearly-worthless pieces of paper (actually, now just electrons in some brokerage account) is welcome to them. The rest of us will do just fine with land, gold, silver and eventually, lead.

These markets deserve to roll over, correct, and eventually will, but that will only happen when the people behind the screens, pulling the strings, find such a move advantageous to their wishes.

Dow 13,345.89, +2.38 (0.02%)
NASDAQ 3,016.96, +11.34 (0.38%)
S&P 500 1,433.81, +0.62 (0.04%)
NYSE Composite 8,329.24, +5.09 (0.06%)
NASDAQ Volume 1,636,307,625
NYSE Volume 3,189,014,000
Combined NYSE & NASDAQ Advance - Decline: 2668-2785
Combined NYSE & NASDAQ New highs - New lows: 84-82
WTI crude oil: 88.73, -1.32
Gold: 1,726.30, +2.30
Silver: 32.25, +0.155

Friday, October 19, 2012

Reality Catching Up to Wall Street on Earnings Misses, Fears

Around June, this author told a particularly self-absorbed, furtive individual that there would be a market "event" shortly before the presidential election, designed to offer the impression that the economy, under president Obama, was failing in multitudinous ways, designed to usher in Mitt Romney as the next occupant of the White House.

Until today, that prediction seemed somewhat unreasonable, as stocks have risen sharply during the summer months, but, as third quarter earnings - in addition to various warnings from the likes of the IMF and World Bank - are proving, the US and global economies are far from what anyone would consider healthy.

Today's sharp sell-off was the product of many misses and warnings by huge multi-national companies that either missed earnings and/or revenue estimates or issued warnings for the months ahead.

Among those companies that fell short of Wall Street's lowered estimates after Thursday's close and prior to Friday's open were McDonald's (MCD), Microsoft (MSFT), Google (GOOG), high-flying Chipolte Mexican Grill (CMG), and General Electric (GE). The misses came behind similar poor showings from Intel (hit a 52-week low today) and IBM, earlier in the week and proved quite a few sell-side analysts correct in predicting that this quarter would be very rough from an earnings perspective.

Truth be told, even those companies beating earnings estimates are not beating by much, with some exceptions, and are generally hitting targets that are lower than the previous years numbers, which, as the market is a continuous-discounting mechanism, means stocks are going in reverse, with earnings falling, not growing.

That alone should explain today's deep, across-the-board, declines, but also brings into question the entire philosophy behind central bank easing and money printing on a global scale. Sure enough, easy money has propped up banks and companies and a multitude of stocks and indices, but the end result of funny fiat money always reverts to a point at which currencies become worthless and derivative instruments, such as stocks, and, further out, bonds, lose value and we could be nearing the conclusion of the failed stimulative experiment that's fixed nothing since the crash of 2008.

Speaking of crashes, today's drop pales by comparison to what occurred 25 years ago to the day, the well-known stock market crash of 1987, when the Dow Jones Industrial Average fell by 23%. It was a seminal market event that will probably (hopefully) never be repeated, as there are supposedly more safeguards and triggers - to say nothing of the PPT - to prevent such a disastrous one-day event.

That is not to say that markets, stocks and indices cannot fall hard over periods of time, though it is far too soon to call today's action the beginning of such a a downward spiral. However, with tech stocks and industrials feeling the heat from investors in an earnings season that has been short on enthusiasm and long on fear, the coming weeks, especially with the November elections as a backdrop, could produce some calamities such as have already been seen in individual stocks, many of which were grossly overvalued and highly speculative, Chipolte and Apple come immediately to mind.

Checking the charts, it's useful to point out that the Dow and S&P broke through their 50-day moving averages and closed just about right on them, a position last seen a week ago, before Monday and Tuesday's "savior" rallies pushed equities back to something of a triple top, which has now broken down in a dramatic reversal. Today's declines on the two indices were the worst since mid-June. Shortly thereafter, both indices progressed above their 50-day MA, but have now returned to the roost, setting up a very unsettling weekend and a potential breakdown on Monday or further on during the week.

As for the NASDAQ, today's worst percentage loser, that index has been screaming red for a month, having busted through its 50-day MA eight sessions ago. Any further deterioration in the beloved NAZ could trigger a serious correction, as it is already down 7% in the past month.

Looking ahead to next week, earnings reports are due out on some big names, such as Cattepillar (CAT), Las Vegas Sands (LVS), Yahoo (YHOO) and Texas Instruments (TXN) on Monday; 3M (MMM), Coach (COH), Facebook (FB) and United Parcel Service (UPS) on Tuesday; and, on Wednesday, Boeing (BA), Eli Lilly (LLY), General Dynamics (GD), Lockheed Martin (LMT) and O'Reilly Automotive (ORLY).

Those mentioned above are but a smattering of companies reporting, in what will be the busiest week of earnings season. CNBC and Bloomberg will be looking for rays of hope, while investors may have a more wary eye toward more companies missing on earnings and revenue.

One economic data point worth noting was existing home sales for September, falling 1.7% to an annual run rate of 4.75 million, well below most estimates.

Until then, the long weekend waiting game, and, on Monday night, the final presidential debate, followed on Wednesday another FOMC rate policy decision, which will probably be nothing more than a formality.

Naturally, there will be the usual can-kicking and posturing from Europe, which still cannot come up with plans for either Greece or Spain, which may or may not be part of the plan to hold off the bad news until after our elections. One can hardly wait.

That is all... for now.

Dow 13,343.51, -205.43 (1.52%)
NASDAQ 3,005.62, -67.25 (2.19%)
S&P 500 1,433.19, -24.15 (1.66%)
NYSE Composite 8,324.14, -118.68 (1.41%)
NASDAQ Volume 2,194,602,500.00
NYSE Volume 3,851,036,250
Combined NYSE & NASDAQ Advance - Decline: 1168-4339
Combined NYSE & NASDAQ New highs - New lows: 166-117
WTI crude oil: 90.05, -2.05
Gold: 1,724.00, -20.70
Silver: 32.10, -0.771

Thursday, October 18, 2012

Google's Goof, BLS Correction

Mistakes happen, but, when it comes to stocks and data, mistakes are magnified by gains or losses on balance sheets or portfolios.

Today's comedy of errors was highlighted before the opening bell by the Bureau of Labor Statistics (BLS) and around midday, by Google, with an assist from R.R. Donnelley.

When the BLS released the most recent initial unemployment claims, they were, in effect, correcting an error made last week, when one state did not accurately report claims. The agency never did tell the public which state was under-reported, but the figure of 339,000 was well below the estimates.

On Thursday, the correction showed initial claims at a more reasonable level of 388,000, and the prior week revised to 342,000. OK, so far.

Around 12:30 pm EDT, Google's (GOOG) third quarter results magically appeared online, although the numbers weren't supposed to be released to the public until around 4:15 pm EDT, after the markets closed. Ooops! The stock dropped 68 points in a manner of minutes, blame was heaped upon publisher R.R. Donnelley, which quickly issued a mea culpa and Google stock was halted until 3:20 pm EDT.

Upon re-opening, Google got a bit of a rise, but the damage had been done. Like it or not, the world's number one search engine reported a clean miss on both earnings and revenue, reflecting a general slowdown in the global economy and, quite possibly, a bit of market share being taken by rival Bing, owned by Microsoft.

Once markets recovered from the midday turmoil, it was back to business as usual, which, these days prior to the general election of November 6, seems to be drifting about the unchanged line. Excepting the NASDAQ, which was impacted by Google's 60-point (8%) decline at the close, the major indices finished relatively flat.

Dow 13,548.94, -8.06 (0.06%)
NASDAQ 3,072.87, -31.25 (1.01%)
S&P 500 1,457.34, -3.57 (0.24%)
NYSE Composite 8,442.91, -3.61 (0.04%)
NASDAQ Volume 2,009,088,250
NYSE Volume 3,833,238,000
Combined NYSE & NASDAQ Advance - Decline: 2276-3211
Combined NYSE & NASDAQ New highs - New lows: 308-44
WTI crude oil: 92.10, -0.02
Gold: 1,744.70, -8.30
Silver: 32.87, -0.364

Wednesday, October 17, 2012

Stocks Hug Flat Line in Earnings Misses, Warnings

Well, Obama won the debate Tuesday night. Anyone who doesn't believe that wasn't paying attention or is seminally biased toward Republicans, One-Percenters, Mormons or all three.

Thus, in addition to a revenue miss from IBM and some warnings from Intel - both Dow components - the wicked mid-earnings-season rally was cut short on Wednesday, though the S&P and NYSE Composite were the percentage winners on the day.

It could be some rotation out of blue chips into, yep, more speculative stocks, which would make sense considering the Fed will continue to pump money in the general direction of Wall Street until its had enough, whatever that level may be.

To take the markets down, there has to be some kind of serious issues, at least something more serious than what financiers everywhere continue to deny: the great indebtedness of sovereign nations and central bank profligacy, but, with options expiry on Friday, this rally seems to have run out of steam rather abruptly, though one could hardly guess that from the new highs on the NYSE (245).

Queueing Europe in 3...2...1...

Dow 13,557.00, +5.22 (0.04%)
NASDAQ 3,104.12, +2.95 (0.10%)
S&P 500 1,460.91, +5.99 (0.41%)
NYSE Composite 8,446.52, +60.05 (0.72%)
NASDAQ Volume 1,777,785,875
NYSE Volume 3,654,417,500
Combined NYSE & NASDAQ Advance - Decline: 3558-1876
Combined NYSE & NASDAQ New highs - New lows: 350-45
WTI crude oil: 92.12, +0.03
Gold: 1,753.00, +6.70
Silver: 33.23, +0.273

Tuesday, October 16, 2012

Pandit Resigns from CITI; IBM Revenue Miss; Greece Talks Stall; Farm Notes

It was a busy day on Wall Street, with stocks closing at or very near their highs of the day, the two-day rally this week nearly recouping the losses from the prior week on the Dow and S&P, though the NASDAQ, hardest hit last week, has recovered only about 1/2 of its losses.

Stocks got an early boost when Coca-Cola (KO) matched earnings estimates of 50 cents per share and Johnson & Johnson (JNJ) reported third quarter earnings, excluding special items, of $1.25 per share. Analysts, on average, expected $1.21 per share. Both companies are components of the Dow Jones Industrial Average.

Goldman Sachs (GS), the nation's fifth largest bank by assets (though even though hastily granted a commercial bank charter in the midst of the 2008 financial crisis, has yet to open a single retail branch), also beat lowered estimates, citing debt investments and underwriting fees as the main profit drivers.

Industrial production grew by 0.4%, capacity utilization increased slightly from 78.2% to 78.3% in September and the CPI ratcheted up 0.6% in September, due mostly to higher food and fuel costs, which explains why the "official" core rate of an 0.1% increase excludes those necessities. On an annual basis, the September CPI translates into 7.2% inflation, which is probably less than it actually is in the new, Fed-funded world of bizarro-finance.

The big news was the abrupt departure of Citigroup CEO Vikram Pandit and COO John P. Havens, just a day after the company reported third quarter earnings. According to published reports, Citi's board of directors had been plotting Pandit's retirement for months, though Pandit himself said it was soley his decision.

Pandit's departure sent shock waves through executive offices at Fortune 500 companies and elsewhere, as apparently, there are still some BODs that are not rubber-stamping mechanisms.

Stocks got off to a fast start with most of the gains made in the morning, with small additions in the afternoon.

After the bell, IBM reported earnings in line with expectations, but missed on revenue of $24.7 billion, down from $25.8 billion in Q2, setting up for a testy open on Wednesday. Shares of Big Blue were down five points in after hours trading.

The Euro gained sharply against the dollar, boosting US shares even more as the dollar cheapened, but, in news generally sealed off from the US, Greece's talks with the troika fell apart over further austerity measures with negotiators walking out of meetings.

That late-breaking news, combined with the results from IBM and the scoring of tonight's presidential debate will set the tone for the open on Wednesday.

Farm Notes: Did you know that the agribusiness model that the large corporate farms employ (row planting and harvesting) wastes land, water and valuable resources, besides putting harmful chemicals - through the use of pesticides and fertilizers - to produce crops that are significantly less-protein rich than vegetables grown in the average backyard garden?

Also, using intensive gardening methods such as those used for centuries in France and elsewhere, the same amount of vegetables that an agribusiness farm can produce on one acre can be produced on 1/10th or less of an acre with less fertilizer, water and no pesticides.

Gardening, in America and elsewhere, isn't just about a pasttime or a hobby. It's about reclaiming the economy and moral high ground from corporations and the wasteful practices promoted by the Department of Agriculture.

Dow 13,551.78, +127.55 (0.95%)
NASDAQ 3,101.17, +36.99 (1.21%)
S&P 500 1,454.92, +14.79 (1.03%)
NYSE Composite 8,386.47, +92.97 (1.12%)
NASDAQ Volume 1,735,765,375.00
NYSE Volume 3,539,692,250
Combined NYSE & NASDAQ Advance - Decline: 3861-1630
Combined NYSE & NASDAQ New highs - New lows: 278-40
WTI crude oil: 92.09, +0.24
Gold: 1,746.30, +8.70
Silver: 32.96, +0.216

Monday, October 15, 2012

Did Retail Sales Power a Rare Monday Rally?

Retail sales for September, as reported on Monday prior to the opening bell, were up sharply year-over-year and were up 1.1% after a 1.2% rise in August.

So, did the retail sector fuel the rare Monday rally, which was only the third time stocks had shown gains on a Monday in the past 20 weeks?

Well, yes they did, as the Consumer Cyclical space gained 1.11%, the best sector gain of the day. Following were Health Care and Financials, the latter based largely on an earnings beat by Citicroup (C), which beat solidly on revenue as well.

The timing could not have been better for options players as October monthly options settle this week, on Friday, just in time for stocks to head to new highs and savvy options professionals cash in on their bets.

Trading on this Monday was a radical departure from last week's broad decline, with the advance-decline line repairing itself and new highs beating new lows by a 2-1 ratio.

Oddly enough, the market wins either way in the currently-convoluted presidential debate regime that is market psychology. With retail and stocks doing well, one would envisage an Obama victory on November 6, anathema to the markets, but, good numbers are good numbers, so, stock traders went along for the ride.

Sticking with the current thinking, even if retail sales had been poor, stocks would probably have risen anyway, because the poor numbers would indicate a Romney victory, which the market is said to love.

In either case, stocks win, even on a day when commodities were hit hard across the board, especially in the precious metals segment, as gold and silver were pounded lower right from the opening of trading.

That seems to be the game plan, at least for today, by the central bank stock market cartel controlling markets worldwide. Buy riskier assets and sell off those things that are proven to be a reliable store of value.

It's working, as stocks are within 5-8% of all time highs on the S&P and the Dow. It's a very interesting time for both political junkies and market watchers, but should get even more intense during the week and after options expiry on Friday. There's still unfinished business in Europe, mostly regarding Greece and Spain, and a shock from the land of the socialists could easily upset any balancing act currently taking place in the markets.

Most of the attention is focused on Tuesday night's presidential debate, the current wisdom saying that another poor performance by president Obama would practically hand the election over to Mitt Romney, the Republican challenger, making the event must-see TV for all, despite the thinly-veiled sarcasm in that statement.

The debates are largely political porn, with many voters having already made up their minds. If Obama purposely throws Tuesday's debate, as he did the first one, it would give Romney an edge, so, considering how the media whores need to keep the American public on the edge of their seats right up until - and beyond - election day, count on the President to deliver some serious body blows Tuesday night, followed by a negative market reaction Wednesday.

With the election just three weeks away, expect the rhetoric and noise to rise to a crescendo in coming weeks. Along with it could be a climactic rise in stocks, with the Dow touching off new all-time highs and the S&P hot on its heels, or, a dramatic turndown heading into the big fiasco that is election day in America.

Dow 13,424.23, +95.38 (0.72%)
NASDAQ 3,064.18, +20.07 (0.66%)
S&P 500 1,440.13, +11.54 (0.81%)
NYSE Composite 8,296.97, +69.89 (0.85%)
NASDAQ Volume 1,536,536,250
NYSE Volume 3,257,196,000
Combined NYSE & NASDAQ Advance - Decline: 3596-1897
Combined NYSE & NASDAQ New highs - New lows: 133-65
WTI crude oil: 91.85, -0.01
Gold: 1,737.60, -22.10
Silver: 32.74, -0.926

Friday, October 12, 2012

Stocks Erase Early Gains, Close Flat

Eerily similar to Thursday's trading pattern, stocks rode early gains until 10:00 am EDT, then quickly sold off, spent the rest of the session in the red and finished flat.

The drop in equities coincided neatly with the release of the University of Michigan's October Consumer Sentiment survey, which showed a reading of 83.1, after posting a 783 figure in September. Either the respondents to the survey have been enjoying some good life, or, like other economic data releases over the past month or so, the data is being rigged in advance of the November elections.

Such conspiracy theories have been gaining traction in recent days, and barely anyone would be surprised, at this point, if some of them were proven valid.

While the indices ended flat, the advance-decline line experienced serious deterioration, suggesting that there were few buyers in the market and those were very selective.

Otherwise, it was a lackluster day for equities. JP Morgan (JPM) and Wells Fargo (WFC) both reported third quarter earnings prior to the opening bell and both beat on the earnings side, though Wells missed revenue projections. Both stocks sold off during the trading session, due, in part, to one of the unexpected consequences of ZIRP and QEternity by the Federal Reserve: with borrowing and lending rates so low, banks are finding it difficult to make money.

Put that in the Keynesian "I told you so" file and have a happy weekend.

Dow 13,328.85, +2.46 (0.02%)
NASDAQ 3,044.11, -5.30 (0.17%)
S&P 500 1,428.59, -4.25 (0.30%)
NYSE Composite 8,227.08, -29.51 (0.36%)
NASDAQ Volume 1,545,540,250
NYSE Volume 3,132,356,750
Combined NYSE & NASDAQ Advance - Decline: 1930-3489
Combined NYSE & NASDAQ New highs - New lows: 109-61
WTI crude oil: 91.86, -0.21
Gold: 1,759.70, -10.90
Silver: 33.67, -0.413

Thursday, October 11, 2012

Push Rally Fades as Unemployment Data is Corrupted

Stocks turned in a split decision on Thursday, with the Dow and NASDAQ finishing negative, while the S&P and Composite posted marginal gains.

Based upon rumor, innuendo, corrupted unemployment claims data and speculation that stocks had become "oversold" (what a joke!), all of the major indices opened higher, but by 11:00 am EDT began to slide off their highs, demonstrating the kind of pattern that is typical of bear markets, but also reminiscent of the many hype rallies that the centrally-controlled markets have made commonplace.

By the end of the day, stocks had given up all their gains (the Dow reach a peak some 71 points higher than yesterday's close), with the Dow suffering its fourth straight negative close, the NASDAQ making it five in a row for the bears.

According to reports, such as this one from CNN, the Labor Department suggested the drop in initial claims to 339,000, the lowest number in over four years and a decline of 30,000 from last week, was due to a technical issue.

The Labor Department noted to journalists that one state - unnamed - posted a large decline in claims, something not normal for the last week in September, which is the end of the third quarter.

This unusual report comes less than a week after the non-farm payroll report for September sent the official unemployment rate to 7.8%, also more than a four year low. Some have charged that the BLS NFP report was corrupted due to politics, noting that no sitting president since FDR had won re-election with an unemployment rate over eight percent.

Whatever the case, the market, for a change, isn't buying it, so the insider bankers and their friends in high political places will have to do better than that if they want to keep stocks levitating, as they have been since June.

Additionally, investors are looking forward to third quarter earnings reports from JP Morgan Chase (JPM) and Wells Fargo (WFC) along with PPI for September prior to the opening of trading on Friday. The monthly University of Michigan Consumer Sentiment report is also on tap for Friday at 9:55 am EDT. The market is expecting a reading of 78.5 after last month's 78.3.

Stocks are on track for their worst week in four months, though today's A-D line showed marked improvement and new highs outpaced new lows, 146-55.

Dow 13,326.39, -18.58 (0.14%)
NASDAQ 3,049.38, -2.40 (0.08%)
S&P 500 1,432.84, +0.28 (0.02%)
NYSE Composite 8,256.66, +27.48 (0.33%)
NASDAQ Volume 1,583,197,750
NYSE Volume 3,622,859,500
Combined NYSE & NASDAQ Advance - Decline: 3463-2002
Combined NYSE & NASDAQ New highs - New lows: 146-55
WTI crude oil: 92.07, +0.82
Gold: 1,770.60, +5.50
Silver: 34.08, -0.027

Wednesday, October 10, 2012

Dow Tanks, Takes Other Averages with It as Global Slowdown Concerns Mount

There was no last hour rally for stocks on wednesday, no reprise of the late-day rallies that typified behavior through the summer and into the early days of fall.

Investors were taking profits and worried about the future after Alcoa (AA) kicked off 3rd quarter earnings season after the close Tuesday with a downbeat outlook, calling for reduced demand for aluminum in a worldwide slowdown.

The leading global producer of aluminum reported a third quarter net loss of $143 million, or -13 cents per share, compared with a profit of $172 million, or 15 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 3 cents per share, which beat consensus estimates which were calling for a roughly break-even quarter.

The company lowered its 2012 growth forecast for aluminum from seven percent to six, saying weak demand from China was the leading cause for the revision.

The Dow led the indices into the red, dragging the S&P and NASDAQ lower throughout a session which witnessed slow deterioration in share prices from the open into the close as an IMF report released on Tuesday, calling for lower 2013 growth worldwide, continued to weigh on markets.

Adding to the chorus calling for slowing growth, OPEC said that current production levels were ample heading into 2013 as demand continues to wane. That sent oil prices tumbling from early-day gains to a loss at the close of floor trading.

It was the third straight negative day on the Dow, the fourth for the S&P and NASDAQ and the first triple-digit loss on the Dow since July 23-24.

Stocks have been moving lower this week after reaching an interim high of 13,610.15 on the 5th of October, the day the non-farm payroll data was released. Since then, stocks have moved markedly lower, with the Dow down two percent in the first three days of this week, closing today just above the 50-day moving average.

The NASDAQ, the worst performer of the major indices this week, broke through its 50-day moving average on Tuesday and failed to recover today, spending only a few brief moments this morning on the plus side before deteriorating through the session.

Also hovering dangerously close to its 50-day MA, the S&P 500 has been down since making a double top on the 5th of October.

The two most robust indicators, the advance-decline line and the new highs - new lows metric continued to deteriorate, with the NASDAQ showing more new lows than highs for the second straight session, 32-53, and new highs holding a very slim edge - 42-33 - on the NYSE. Cumulatively, new lows outpaced new highs 86-74.

All this occurred without any assistance from Europe, where stocks were lower in nearly all Eurozone nations. Meetings scheduled for next week to hammer out bailout details for various countries and banking systems are seen to be troublesome and also weighing on sentiment, which has recently turned negative.

Dow 13,344.97, -128.56 (0.95%)
NASDAQ 3,051.78, -13.24 (0.43%)
S&P 500 1,432.56, -8.92 (0.62%)
NYSE Composite 8,220.62, -58.48 (0.71%)
NASDAQ Volume 1,763,862,625
NYSE Volume 2,927,658,250
Combined NYSE & NASDAQ Advance - Decline: 2271-3218
Combined NYSE & NASDAQ New highs - New lows: 74-86
WTI crude oil: 91.25, -1.14
Gold: 1,765.10, +0.10
Silver: 34.11, +0.124

Tuesday, October 9, 2012

Germany's Merkel Jeered in Athens; Liars, Cheaters, Swindlers and Psychopaths

Markets around the globe took a bit of a beating on Tuesday, just as earnings season is about to get underway in the United States.

The catalyst for today's decline is unknown, though the first major drop in US markets coincided neatly with German Chancellor Angela Merkel's visit to Athens, Greece, where she was jeered by thousands, including some dressed in Nazi uniforms, brandishing swastika flags, and gave the Heil, Hitler straight-armed salute that signified the reign of terror that Germany inflicted upon Europe some 70 years ago.

Greeks, their children, and others who fell under Nazi influence have not forgotten. There are still many unhealed wounds in Europe stemming from Nazi occupation of most of the continent and the lives lost during the deadliest of wars.

The demonstration by the Greeks was isolated, but still calls to mind the devastation that befell Europe under Adolf Hitler and his hordes of merciless killers. Of course, America's entry into the World War II signaled the beginning of the end of Hitler's reign of terror. Like all psychopaths, he was exposed and defeated, freeing the continent from the grip of fascism.

Seeing the sarcastic rendering of neo-Naziism could prove a heartening reminder that nearly all liars, cheaters, swindlers and psychopaths are eventually brought to some form of justice, either exposing themselves by their own foolish deeds or brought out from the shadows by those who choose to confront them, deny them and defeat them.

It would be refreshing to think that all the liars and cheaters of the world would be found out and demonstrably punished, though reality teaches that that is not the case. From the scandalous likes of mega-bankers to the small-minded, petty fools who concoct flimsy excuses by which to break deals, or the equally stupid types who hear only what they want to hear and make up stories, put words in other people's mouths and are general abusers, these all should be found out and made to pay dearly for their transgressions.

Failing the exposure of frauds and liars, the best the righteous can hold in their hearts is the thought that the prevaricators, manipulators and others of their ilk have to live with themselves, unforgivable and not forgiven. Their puny lives consist of their own little hell, an isolated, brutal existence that stains the soul and darkens the mind. The psychopaths among us cannot love, cannot feel the pain of others but can only inflict it, fool themselves with false pride, believing that they are somehow better, privileged, never at fault and unapologetic. They are sick, depraved and truly despicable human beings.

To these pariahs, the upstanding, the honest, the happy people of the world say, good riddance. Your personal torment is payback enough for your evil transgressions.

As for the markets, some interesting developments in the A-D line, which was 7-2 in favor of the losers and the new highs - new lows indicator, which flipped over to negative, 49-39 on the NASDAQ, though remained in favor of new highs on the NYSE, 97-26, a much narrower gap than in recent days. Paying close attention to both of these indicators may be investing 101, but they are among the most reliable metrics when change is in the wind, and a correction has been and still is, long overdue.

As earnings season heats up, we'll find out whether the market can sustain itself on the wings of Bernanke's put, unlimited MBS bond purchases, ZIRP and other Keynesian-like manipulations.

Dow 13,473.53, -110.12 (0.81%)
NASDAQ 3,065.02, -47.33 (1.52%)
S&P 500 1,441.48, -14.40 (0.99%)
NYSE Composite 8,279.11, -80.02 (0.96%)
NASDAQ Volume 1,646,239,125
NYSE Volume 3,187,523,500
Combined NYSE & NASDAQ Advance - Decline: 1244-4293
Combined NYSE & NASDAQ New highs - New lows: 146-65
WTI crude oil: 92.39, +3.06
Gold: 1,765.00, -10.70
Silver: 33.98, -0.032

Monday, October 8, 2012

Markets Close Down 17th Time in Last 19 Mondays

The headline says all you need to know.

Stocks spent the entire day languishing in a narrow, negative range, on really ugly volume (it was, after all, a (half)holiday, Columbus Day), but pared early losses to finish marginally down, except for the NASDAQ, which was dragged down considerably by Apple (AAPL).

Other than the usual Monday blues, there was no economic data to report as traders await third quarter earnings reports, which will be kicked off by Alcoa (AA) Tuesday after the bell.

There's some noise coming from Europe, which may not be all good. The first meeting of the ESM was today, though the ministers spent most of the time arguing about just how big Europe's main bailout fund should be.

Here's a clue for them all: whatever you decide on, it will not be enough.

Dow 13,583.65, -26.50 (0.19%)
NASDAQ 3,112.35, -23.84 (0.76%)
S&P 500 1,455.88, -5.05 (0.35%)
NYSE Composite 8,358.86, -25.21 (0.30%)
NASDAQ Volume 1,173,675,250
NYSE Volume 2,305,869,000
Combined NYSE & NASDAQ Advance - Decline: 2020-3386
Combined NYSE & NASDAQ New highs - New lows: 174-51
WTI crude oil: 89.33, -0.55
Gold: 1,775.70, -5.10
Silver: 34.02, -0.555

Friday, October 5, 2012

Reliability, Persistence and Consistency; NFP Number Disagreeable to All


It slices to the heart like a butcher's knife through a sheave of pork... or chicken, appropriate, for the occasional sarcastic remark, refrained from by those with more sense than the norm.

Today's post, Reliability, Persistence and Consistency, was supposed to have been written yesterday. So much for prescience and the timeliness of a message not delivered.

As the matter may be, the trio go together well. While consistency may or may not inspire a reliable nature, so too persistence can be the godfather of both. In the end, the verbiage required for an adequate discussion of the value of virtuousness is far too great to be expensed on a Friday afternoon. Better to leave things unsaid than say them wrongly, even as the wrongs of others may force the hand into parody, mirth or an occasional lilting melodrama.

As for the markets, so much nothing about nothing much. The greatly-anticipated non-farm payroll report for September left much to be desired on both the bullish and bearish sides of the equation. The actual number of 114,000 net job gain was so close to all official and unofficial estimates as to be nothing more than a hiccup, though traders made the best of it, sending stocks rocketing at the open and trading them down throughout the session and into the close.

A great deal has been and will be made of the unemployment rate flopping to 7.8%. It's pure rubbish, concocted from flimsy data with maximum massage President Oblahblah will feel a s rush of relief. Since FDR, no president has won re-election with an official unemployment rate over 8.0 percent. It's a winning number for a second term. What utter nonsense, because, if the truth be known, the comparison to FDR is apt, so the chances are good that Obama could be re-elected with an unemployment rate of 10 or 15 percent, such is the economic condition of the nation.

May decimal point profits and losses were made by those who find day-trading a pleasurable occupation. For the rest of us, it didn't really matter, much like Wednesday night's Presidential Debate, an over-flouted fiasco of sound that greatly interfered with the finale of the baseball season, which, notably, was without great tension and tumult, except, of course, for fans of the Oakland Athletics. Somewhere, everywhere, lovers of the little guy were crying tears of joy for smallball.

The weekend beckons. Be not afraid nor tired from the pressures of the week just commenced. It is past, and the future always holds promise. Take a break. Reflect. Enjoy life rather than cursing your lot. The weekend will last but a short time. In the grand pantheon of history, your life matters little as well. Don't even think about it. Monday will come sooner than most of us will like.

Dow 13,610.15, +34.79(0.26%)
NASDAQ 3,136.19, -13.27 (0.42%)
S&P 500 1,460.93, -0.47 (0.03%)
NYSE Composite 8,384.07, +7.73(0.09%)
NASDAQ Volume 1,611,767,130
NYSE Volume 3,177,711,250
Combined NYSE & NASDAQ Advance - Decline: 2837-2618
Combined NYSE & NASDAQ New highs - New lows: 468-40 (really)
WTI crude oil: 89.88, -1.83
Gold: 1,780.80, -15.70
Silver: 34.57, -0.529

Wednesday, October 3, 2012

Like Emotions, Stocks Run the Full Gamut

There's good karma and bad karma, and there seems to be no shortage of either on Wall Street lately.

The best advice concerning the essence of bad karma is to quickly depart, a dictum taken to heart by investors with losing positions, of which there are currently some, though not an overwhelming number.

While the averages have done little of late to inspire either the bulls or the bears, individual stocks have been doing cartwheels and flips, like Kraft did today in a singular reprise of the flash crash (though to the upside), or like Hewlett-Packard to the downside.

Through it all, it's an emotional game played over emotionless bits of data and what used to be paper certificates. While it may be profitable to some, only those willing and able to suffer long periods of fallow may eventually come away with significant gains. Stocks, even though many Americans unwittingly own them through 401k or other investment vehicles, are a risky lot, not for the feint of heart.

Today's action was choppy, mostly positive, but moreso in the morning than in the afternoon, when the Dow slipped briefly into negative territory and the S&P, NASDAQ and NYSE Composite hit the lows of the day. As usual, low volume was prevalent, economic data uninspiring and stocks rebounded in the final hour.

It's like waiting for a hammer or second shoe to drop, the endless ticking, the tickling teases, the unending speculation running through the mind. What if? What, then?

The best news to millions of motorists was today's precipitous drop in the price of oil, which was surely bad news for certain speculators.

As in sports, or love, or simple competition, there are winners and there are losers. Unlike Nature, which makes choices based on long-standing natural dictums, the rules of stocks are man-made, and subject to frequent reconsideration, recalculation and remorse.

Nature gives to all, takes from one and gives to another. It's a zero-sum game through the pantheon of ages. Stocks are different. One must buy into risk and losses and gains go to those in the right positions.

Most of us, in our heart of hearts, would probably choose nature over stocks, but we're either too dumb, numb or indoctrinated to make such a wise, but simple choice.

Perhaps in another time, a different place, the crush of humanity would make the wise choice. For now, we have what we have, and it is not very pleasing.

Finally, for those having trouble finding full range of human emotions in these hectic, helter-skelter times, or just suffering an overload of the negative ones, this classic from Nat King Cole:

Dow 13,494.61, +12.25 (0.09%)
NASDAQ 3,135.23, +15.19 (0.49%)
S&P 500 1,450.99, +5.24 (0.36%)
NYSE Composite 8,297.50, +2.39 (0.03%)
NASDAQ Volume 1,683,303,875
NYSE Volume 3,486,346,750
Combined NYSE & NASDAQ Advance - Decline: 2643-2824
Combined NYSE & NASDAQ New highs - New lows: 246-46
WTI crude oil: 88.14, -3.75
Gold: 1,779.80, +4.20
Silver: 34.69, +0.021

Tuesday, October 2, 2012

Moody Market Seeks Direction; Farm Notes: Keeping Good Faith

Wandering aimlessly through the session, US indices could not decide to rise or fall on Tuesday, ending the session in split fashion.

Gaining in the morning and finally relenting by midday, stocks hit their lows of the session between 2:00 and 3:00 pm EDT, but gathered momentum into the close, paring losses and, in most cases, turning slightly positive.

The Dow was the only index to suffer a loss, a sharp reversal from Monday, upon which the Industrials held the best percentage gain among the major indices.

Volume was fairly anemic, though that's nothing unusual, and while many are calling the recent moves a "stealth rally" the effects of monetary policy, particularly the Fed's recently-announced purchase of some $80 billion per month in MBS for an unspecified period (AKA QEternity) have been felt, possibly having been already priced into stocks, some of which continue to trade at nose-bleed levels, the past few weeks of have been anything other than a secret and almost certainly not a rally.

Since QEternity was announced as policy on September 13, the major indices have been substantially flat.

Of course, this being October and a presidential election year, all of this could change if the market suddenly finds a catalyst for a move in either direction. On the other hand, the market ostensibly controlled by a small number of "strong hands," listlessness and directionless trading could be continued through the election and beyond. As the brokerage commercials are quick to point out, stocks cary risk.

Farming Note: In the rural outliers where corn and chickens are more important than stocks and bonds, a person's word is generally regarded as oath, at least until it is found to be untrue.

It's not a good idea to make promises and plans with potential partners or acquaintances only to dummy up some feeble excuse whereby to break an agreement. Word spreads quickly in farm country about one's character and eventually, those whose word is found not to be trustworthy, soon find themselves cast away, a pariah of the community.

Besides being the golden rule to "do unto others as you would have them do unto you," not keeping good faith ruins friendships, destroys one's self-confidence and generally puts one at odds with Mother Nature herself, a condition reserved only for the truly wicked and those who would scheme against one's fellow man or woman in pursuit of one's own fortune.

Rain may fall when unwanted, drought may starve crops at other times, but only the fruitlessness of one's own hand can cause one's own demise. The harmed party or parties may seek lawful restitution if one's word is a written contract, though more often the result is that the harmed party finds a better deal with a competitor, and the perpetrator of deceit is brought down by guilt and shame.

Dow 13,482.36, -32.75 (0.24%)
NASDAQ 3,120.04, +6.51 (0.21%)
S&P 500 1,445.75, +1.26 (0.09%)
NYSE Compos... 8,295.11, +10.74 (0.13%)
NASDAQ Volume 1,617,743,250
NYSE Volume 3,275,690,000
Combined NYSE & NASDAQ Advance - Decline: 2859-2592
Combined NYSE & NASDAQ New highs - New lows: 247-44
WTI crude oil: 91.89, -0.59
Gold: 1,775.60, -7.70
Silver: 34.67, -0.283

Monday, October 1, 2012

Stocks Open 4th Quarter with Squeamish Gains; Are Chestnuts Better as Investments?

First day of the quarter, so, considering all the rampant money-printing, stock had better show gains on the first day of the quarter, though, at the end of the day, the gains were marginal, except for the safety play on the Dow, which was the leading index by percentage.

Consider chestnuts. They never go up, but always fall from trees, encased in prickly husks to protect the fruits from predators, uninvited guests, birds and insects.

In our neck of the woods, chestnuts are ripe and ready for eating, falling from the trees like free gold from the sky. Makes one almost believe there's a God, or gods, watching over the planet.

Think about fruit and nut trees as opposed to stocks and bonds. They require little effort and return an annual dividend, which, unlike paper assets, can be eaten if need be. And, with age, the returns multiply.

Dow 13,515.11, +77.98(0.58%)
NASDAQ 3,113.53, +2.70 (0.09%)
S&P 500 1,444.49, +3.82(0.27%)
NYSE Composite 8,284.36, +33.36(0.40%)
NASDAQ Volume 1,761,352,630
NYSE Volume 3,478,999,000
Combined NYSE & NASDAQ Advance - Decline: 3280-2246
Combined NYSE & NASDAQ New highs - New lows: 346-41
WTI crude oil: 92.48, +0.29
Gold: 1,783.30, +9.40
Silver: 34.95, +0.38