Friday, November 30, 2012

No Talk about Fiscal Cliff Means Stocks Go Nowhere

Is this what happens when politicians don't talk about the fiscal cliff negotiations?

Nothing? Well, except that gold and silver got mashed down. Central bankers really don't like the precious metals... until they own all of them, that is. Sick.

So be it. The weekend awaits.

Dow 13,025.58, +3.76 (0.03%)
NASDAQ 3,010.24, -1.79 (0.06%)
S&P 500 1,416.18, +0.23 (0.02%)
NYSE Composite 8,260.35, +4.28 (0.05%)
NASDAQ Volume 1,973,701,750
NYSE Volume 3,640,136,500
Combined NYSE & NASDAQ Advance - Decline: 2878-2592
Combined NYSE & NASDAQ New highs - New lows: 176-34
WTI crude oil: 88.91, +0.84
Gold: 1,710.90, -16.30
Silver: 33.20, -1.144

Thursday, November 29, 2012

Wall Street to Washington, the Clown Show Continues

OK, it's finally gotten officially stupid to invest any money at all in stocks, though judging by the massive outflows from stock-related mutual funds to bond funds, it seems that may be preaching to the choir as far as retail investors are concerned.

Today saw more ridiculous posturing and pontification by various US public office-holders, first by House Speaker John Boehner (who seems to relish in the publicity and his new-found super-power, capable of moving stock indices with a single phrase) who, after meeting with the president's chief negotiator - Treasury Secretary Timothy Geithner - said that there had been no substantive progress on the fiscal cliff issues in two weeks (no kidding!) and that the president needs to put his cards on the table.

Apparently, Geithner is stone-walling for Obama, insisting on allowing the Bush tax cuts to expire on the wealthiest taxpayers - those earning over $250,000 - while allowing them to remain in place for everyone else, but Boehner is likely still insisting on concrete spending cuts. Both have good ideas, though the probability of a realistic compromise appears to be still a ways off.

So, Boehner steps to the microphone a few minutes after 11:30 am ET, says a few words and the Dow loses 50 points in about a minute. A little while later, Senate Leader Harry Reid takes his turn and stocks recover a bit. Maybe Harry has a gentler touch? But stocks went up even more when NY Senator Chuck (I represent Israel) Schumer took to the podium and said a deal was almost a certainty by Christmas, once again, overstating the obvious. Senator Schumer probably had an options straddle working, needed a few extra points on the SPY and he got them.

Nancy Pelosi threatened to speak nearing the close, but held off until after the final bell. Apparently, Mrs. Pelosi plays the futures markets. It's all so absurd, the great Saul Bellow could not have penned a more abstract, obtuse script.

Other than the fiscal cliff bad theater, existing home sales in October were reported to have increased by 5.2% percent over the previous month, third quarter GDP was revised upward from 2.0% to 2.7%, which the market had expected, though most of the gains came from government spending, inventory additions and hedonic adjustments.

Retail Sales for November were reported by a number of chain stores, showing an overall gain of 1.7%, well below the happy forecast of a 4-5% jump. Naturally, Hurricane Sandy was blamed for much of the shortfall, though actual sales declines at Kohl's (down 5.6%), Macy's and Nordstom's were more likely due to a combination of competition, poor marketing and overall sluggish demand by consumers, who can only buy so many 42-inch flat screens, iPods and clothes on limited budgets.

Also, this graphic caught some attention. It shows how former Goldman Sachs executives are now the central bankers of most of Europe. No wonder they're doing so well over there.

Gold was up sharply, as was oil and silver, a day after being belted down by unseen forces. Silver, in particular, is at a two-month high, and looks like its about to break out, though that's been said and seen before, with no follow-through, thanks to the suppressive work constantly being done at JP Morgan.

The big tent will open for the circus promptly at 9:30 am ET tomorrow.

Dow 13,021.82, +36.71 (0.28%)
NASDAQ 3,012.03, +20.25 (0.68%)
S&P 500 1,415.95, +6.02 (0.43%)
NYSE Composite, 8,256.07, +48.71 (0.59%)
NASDAQ Volume 1,758,355,875.00
NYSE Volume 3,337,720,000
Combined NYSE & NASDAQ Advance - Decline: 3963-1531
Combined NYSE & NASDAQ New highs - New lows: 233-30
WTI crude oil: 88.07, +1.58
Gold: 1,727.20, +10.70
Silver: 34.35, +0.664

Wednesday, November 28, 2012

Turnaround Tuesday on Fiscal Cliff Comments from Boehner, Obama

Stocks careened lower at the open, with the Dow down more than 100 points on data that showed the number of new homes being built (maybe a shovel in the ground somewhere) slowing to an annual pace of 368,000, well below the estimate.

Shortly thereafter, House Majority leader, John Boehner, emerged from a brief meeting with some wall Street corporate CEOs and said something to the effect that the Democrats need to get serious about solving the issues of the fiscal cliff.

Around noon, President Obama came out and delivered some equally algo-soothing words, sending the market even higher. While neither man said anything specific or anything which could even remotely be construed as closing in on a deal, Wall Street computers took their words as a cue to buy, enough for a 200-point move on the Dow, something that hasn't happened in over a year's time.

We certainly are playing in interesting times. A politician moves his or her lips and markets respond. How perfectly Pavlovian.

Gold and silver were inexplicably down sharply, but not to worry. Tomorrow or the next day, markets will begin to respond to celebrity raised eyebrows, the body language of sports stars and maybe even dog scratching.

Besides, according to the Incan calendar, the world will reverse polarity on the 22nd of December, and instead of a fiscal cliff, we'll have a monetary waterfall, courtesy of the Federal Reserve, of course, fixing everything for eternity, or at least until the next election.

Dow 12,985.11, +106.98(0.83%)
NASDAQ 2,991.78, +23.99(0.81%)
S&P 500 1,409.93, +10.99(0.79%)
NYSE Composite 8,207.36, +56.57 (0.69%)
NASDAQ Volume 1,726,631,875
NYSE Volume 3,324,916,750
Combined NYSE & NASDAQ Advance - Decline: 3606-1863
Combined NYSE & NASDAQ New highs - New lows: 122-54
WTI crude oil: 86.49, -0.69
Gold: 1,716.50, -25.80
Silver: 33.68, -0.297

Tuesday, November 27, 2012

Washington Gets Back to Work (Kinda); Stocks Slump Despite (Kinda) Positive Data

Tuesday began with a flurry of good news.

First, over in Bizzarro-world(aka Europe), EU ministers were glad-handing and slapping each other's backs for another successful bailout of Greece (really, is this the third, fourth or fifth? Who's counting?), then, at 8:30 am ET, durable goods orders came in better than expected.

At 9:00 am ET, the September Case-Shiller Housing Index showed another in a series of positive gains for housing. Better yet, consumer confidence hit a four-and-a-half-year high, reported at 10:00 am ET.

So, why were the markets in such a sour mood, why did they end lower, and why were they not even lower than where they finished?

Ah, grasshopper, so many questions...

First, that somewhat refreshing zero print on durables was, in fact, pretty ugly, once one ventured to peek under the hood. As Zero Hedge reports, a continued collapse in durable goods new orders virtually guarantees that we're already in a recession, fiscal cliff or not (more on that canard later).

The Case-Shiller data, which showed the average price of a home purchase up by 3.6% nationally, has to be faded a little, only because housing is not stocks, and, even though home-buying is a relevant statistic, it matters little in the broader scheme of things, especially when the banks are keeping massive numbers of homes off the market in what's known as "foreclosure stuffing." Those in the know, really, really do know.

As far as the consumer confidence number, well, anybody who allows themselves to be branded a consumer for purposes of a survey can't be all that bright, after all.

In the case of the nth installment of the Greek bailout, there were scant details, the IMF hasn't signed off on it yet, the "deal" has to be approved by each member (17) country, so, the Euro sold off, anathema to US markets.

And then, about 2:30 pm ET, US lawmakers (that's a joke, son) emerged from talks over the fiscal cliff (that's not a pun, son) and did what everyone thought they'd do, since their track record is so plain and clear on this point: point fingers at the other side for not playing fairly.

Senate majority leader Harry Reid: "...little progress with Republicans..."

Senate minority leader Mitch McConnell: "...some difficulty turning off the campaign..."

Is it any surprise to anybody that working out a deal in DC was going to be a difficult, if not impossible, issue? After all, this whole "fiscal cliff" miasma started more than a year ago when the two sides failed to reach conciliatory postures on increasing the debt limit, and that puny increase of roughly $1.2 trillion is about to run out.

So, with no deal even remotely being discussed, the Titans of Wall Street started selling in earnest and continued selling into the close. They will probably still be selling when the opening bell rings on Wednesday and maybe even beyond that, because depending on Washington politicians to reach a concord on any matter of even insignificant importance is like getting cats and frogs to behave well together. It's just not going to happen.

Further, indispensable reading from the Wall Street Journal comes in the form of an editorial by Chris Cox and Bill Archer - respectively, former chairman of the House Republican Policy Committee and the Securities and Exchange Commission and former chairman of the House Ways & Means Committee - explaining why the fiscal cliff of $600 billion is merely a puff of smoke compared to the conflagration that is the real unfunded liabilities of Medicare and Social Security, refreshingly written in language even a protesting Wal-Mart worker could comprehend.

The saga continues to unfold tomorrow. Oh, by the way, so many people did their holiday shopping on Thanksgiving, Black Friday, Small Business Saturday and online on Cyber Monday this year, and, considering that since Turkey Day was so early this year that there's an extra week in the holiday shopping season, retail sales are going to be very slow for the one, two, three, four next weeks, until the last Saturday before Christmas (the 25th is a Tuesday), so, Happy Holidays! Free houses, Greek bailouts, durable goods and fiscal cliff-diving for everyone... including consumers!

Dow 12,878.13, -89.24 (0.69%)
Nasdaq 2,967.79, -8.99 (0.30%)
S&P 500 1,398.94, -7.35 (0.52%)
10-Yr Bond 1.65% -0.02
NYSE Volume 3,294,930,000
Nasdaq Volume 1,762,521,750
Combined NYSE & NASDAQ Advance - Decline: 2462-3041
Combined NYSE & NASDAQ New highs - New lows: 154-40
WTI crude oil: 87.18, -0.56
Gold: 1,742.30, -7.30
Silver: 33.98, -0.156

Monday, November 26, 2012

Early Case of Holiday Blahs for Equities

Trading was sluggish and mostly to the downside in the morning session - likely on quick profit-taking from the Black Friday rally - but capital was re-allocated in the afternoon, as stocks rallied into the close.

Concerns over resolution to US fiscal issues and Europe's finalizing yet another round of financing for Greece kept stocks in the red for almost the entire day, except for the NASDAQ, which was boosted largely on trades in Apple (AAPL), which was up more than three percent on the day.

There was little in the way of economic data or corporate news to move markets, as trading volumes were at low levels.

Simply put, there wasn't even a left-over turkey leg to Friday's rally as traders were quick to pul the sell lever with so many issues overhanging the markets.

The Dow, down as much as 109 points before noon, rallied to close near the best level of the day, which, of course, means nothing.

Things should get more interesting as news of talks between Republicans and Democrats on the "fiscal cliff" issue begin to circulate throughout the week.

Dow 12,967.37, -42.31 (0.33%)
Nasdaq 2,976.78, +9.93 (0.33%)
S&P 500 1,406.29, -2.86 (0.20%)
NYSE Composite 8,197.48, -28.02(0.34%)
NYSE Volume 2,833,759,250
Nasdaq Volume 1,559,037,750
Combined NYSE & NASDAQ Advance - Decline: 2636-2880
Combined NYSE & NASDAQ New highs - New lows: 124-40
WTI crude oil: 87.74, -0.54
Gold: 1,749.60, -1.80
Silver: 34.14, +0.021

Friday, November 23, 2012

Dumbest. Rally. Ever.

Will markets never learn?

Every year, on the half-day session that is Black Friday, stocks get a giddy bounce over the prospects of rabid holiday shopping frenzy and a warm, cozy, holiday feeling about consumer spending.

This year's half-day wonder was no exception. In fact, it was exceptional, as stocks soared at the open and added to outsize gains on extreme low volume. The gains were among the top five, point-wise, for the major averages this year, surging through overhead resistance, especially on the S&P 500, which broke above its 200-day moving averages. It was a sucker's rally to beat all suckers.

Priced into the advances were widespread, solid rumors that third quarter GDP would be revised upward from 2% to 2.8 or maybe even 3% next week.

These signs of exuberance may be tempered once the politicians get back into the mix. Republicans and Democrats are reportedly far apart on negotiations to solve fiscal cliff issues, with Republicans still demanding that Bush-era tax cuts on the rich remain in place, while Democrats wish to raise rates on earners over $250,000 per annum while keeping in place lower rates for the rest of American taxpayers.

Rest up and get some exercise to work off those additional pounds socked away on Thanksgiving. Everyone will be in need of extra energy to keep up with developments next week.

And just in case anybody thought the truce in the Middle East was one of lasting quality, Israelites and Palestinians barely took a break in killing each other. In response, silver tallied the biggest percentage gain of the day (2.23%) and gold rose by more than $23.00. So much for stability.

Black Friday Special: Free houses with zero down leases with no payments until the Fed raises interest rates, on new Cadillacs for everybody!

Dow 13,009.68, +172.79 (1.35%)
Nasdaq 2,966.85, +40.30 (1.38%)
S&P 500 1,409.15, +18.12 (1.30%)
NYSE Composite 8,220.31, 108.13(1.33%)
NYSE Volume 1,423,529,125
Nasdaq Volume 743,239,875
Combined NYSE & NASDAQ Advance - Decline: 4192-1058
Combined NYSE & NASDAQ New highs - New lows: 135-37
WTI crude oil: 88.00, +0.62
Gold: 1,752.10, +23.90
Silver: 34.10, +0.745

Wednesday, November 21, 2012

Stocks Get Pre-Holiday Bounce on Israel-Gaza Truce

Looking as hard as possible for positive news upon which to launch a rally, the Wall Street casino got what it wanted from US Secretary of State, Hillary Clinton, who brokered a truce in the ongoing warfare between the state of Israel and militants in the Gaza Strip.

Announced just after noon Eastern Time, the truce was to begin at 2:00 pm ET, or roughly 9:00 pm Tel Aviv time.

How long the truce will remain n force is anybody's guess. The conflict in the Palestinian area of the Middle East has been going on for as long as most of us can remember, so whatever is achieved will be short-term at best, just like almost everything else these days, a matter of how far down a given road one can kick a can.

Outside the news that Palestinians and Israelis won't be trying to kill each other overtly for a few days, there was little going on to make investors optimistic.

Hostess, which had been in bankruptcy and was the recent victim of an ill-advised strike by the baker's union, went through a day of mediation and returned to court, where the judge signed off on liquidation of the company that used to make Ho-Hos, Twinkies, Ding-Dongs and assorted junk foods that have contributed in no small way to the epidemic of diabetes in this country.

Probably, it's for the good of the country - and fata$$es worldwide - that the company goes under.

Looking ahead, there's a half-day session on Friday, following the Thanksgiving holiday, which usually results in an eventually meaningless Black Friday rally as millions of misguided Americans crowd stores, malls and shopping centers to buy worthless trinkets and electronic gadgets for friends and relatives.

Too bad Christmas will never get here, as the world is scheduled to end on December 22, according to the Incas, or Aztecs, or somebody.

Well, nobody likes a Scrooge at this time of year, so...

Free iPads and Houses for Everybody! And free Twinkies, too!

Happy Thanksgiving. Stay hungry, my friends.

Dow 12,836.89, +48.38 (0.38%)
Nasdaq 2,926.55, +9.87 (0.34%)
S&P 500 1,391.03, +3.22 (0.23%)
NYSE Composite 8,112.20, +25.78 (0.32%)
NYSE Volume 2,647,812,000
Nasdaq Volume 1,406,020,500
Combined NYSE & NASDAQ Advance - Decline: 3577-1856
Combined NYSE & NASDAQ New highs - New lows: 108-71
WTI crude oil: 87.38, +0.63
Gold: 1,728.20, +4.60
Silver: 33.35, +0.42

Tuesday, November 20, 2012

Amid Flurry of News and Rumor, Stocks End Flat

It's not official until Thursday, but we're pretty much in the holiday season, which means a few things:
1. Trading volumes should be low;
2. Volatility will not manifest (unless there's a war or no deal on the fiscal cliff);
3. A lot of people will be booking profits, i.e., selling;
4. Nobody will take anything with any enormous level of seriousness; people will be more concerned with shopping, eating and visiting relatives and friends.

While those are broad considerations, they more than likely point to a sideways-moving market for the next few weeks. Not to say that there won't be money to be made - there always is - but adroitness and nimble movements will be the key to staying just slightly ahead of the curve.

There's a very good possibility that although the general indices will remain somewhat range-bound, the actual swings could be large from lows to highs. Considering that the Dow is coming off an 1100 point decline, there's room on the upside as well as ample opportunity for the congress and president to blow the whole deal on the fiscal cliff - in fact, the likelihood of them posturing, fuming, arguing and delaying the deal until the last possible moment is paramount.

So, the advice for the remainder of 2012 is as follows: play along, keep tight stops, but look for opportunities as they present themselves. We're going nowhere but sideways to down, with the probability of an upside move of say, 500 Dow points, about zero, while the probability of a huge move in the opposite direction is about 30=40%.

During the recent pullback, every rally was sold into, and every sell-off was partially exacerbated by a little bit of panic - not over losing money, but losing what profits one had already achieved. There were two major downdrafts over the past month: the first, mid-to-late October, and the second, larger move, right after the election and lasting until yesterday.

Anyone paying attention will note that the Dow and the BASDAQ are both still mired below their 200-day moving averages, while the S&P continues to flirt with the up-and-downside of its own 200-day MA. These are difficult positions to maintain, and, in the case of all of the major indices, there is nearly unlimited potential to slide, as no solid support is evident. Today's scary mid-afternoon plunge was fought off by some spirited insider buying. If there's any clue to the action, it's that those heavily-invested in this market are not fully out, nor are they fully exposed. There's still too much on the table needing to be resolved.

Just as yesterday's rally was a one-off event, so too today's nothing finish after a number of major events, including a possible truce in the Israel-Hamas conflict (not gonna happen), Hewlett-Packard (HPQ) writing down nine billion of an $11 billion investment and claiming fraud; the biggest insider trading scheme ever being exposed and set to be prosecuted. That was almost enough to tip the averages over the edge, but, for whatever reasons and whatever positions they are defending, the big money inside Wall Street was not about to let it happen. Not certainly just before a holiday and the start of the retail buying spree.

It's going to get more interesting, but not until next week. In the meantime, everybody's on pins and needles, not the kind of seat one would prefer for a Thanksgiving dinner.

Dow 12,788.51, -7.45 (0.06%)
Nasdaq 2,916.68, +0.61 (0.02%)
S&P 500 1,387.81, +0.92 (0.07%)
NYSE Composite 8,086.41, +6.12(0.08%)
NYSE Volume 3,182,159,250
Nasdaq Volume 1,585,562,750
Combined NYSE & NASDAQ Advance - Decline: 2870-2606
Combined NYSE & NASDAQ New highs - New lows: 108-88
WTI crude oil: 86.75, -2.53
Gold: 1,723.60, -10.80
Silver: 32.93, -0.259

Monday, November 19, 2012

Washington Goes Home, Wall Street Throws a Party

President Obama is in the Far East on a multi-nation god-will tour. The rest of the politicians in Washington, the congress, have mostly gone back to their districts for a holiday break (that's why we love our "leaders" so much - while we get a four-day weekend, they take the whole week off.

With nobody around to moan and bemoan the national crisis known as the fiscal cliff, Wall Street took the opportunity to buy everything in sight - even before Black Friday, as sentiment has shifted from worrisome to ebullient and a majority of traders think that congress and the president will come to some kind of deal prior to the January 1 deadline.

While such optimism may be well-founded, it also may not be. There's still no deal to speak of, and the politicos won't get to work on one until next Monday at the earliest. One would think that people as smart as those on Wall Street would know better than to trust the words of politicians, especially this current bunch, which has a track record of disagreeing on just about everything, but the bulls took command on Monday and sent stocks soaring into the stratosphere.

It should figure. There are a full five weeks until the next payday, otherwise known as options expiration, on Friday, December 21, and plenty of time for stocks to rise or fall. Also, all the inside money made all the best moves, as stocks went skyward right at the open, locking out the less nimble and less-connected retail investors.

There was more good news on housing, as existing home sales rose 2.1% month-over-month and the homebuilders' index catapulted to levels not seen since the giddy, boom days of 2006.

So, all of a sudden, everything is rosy again. Until it's not, that is, which should be tomorrow or maybe some time next week.

It pays to pay attention to this attention-deficit market, though it may not pay to actually participate in it.

The show continues tomorrow...

Meanwhile, in the basement of the Federal Reserve, is Ben Bernanke quietly printing a gazillion dollars on his HP Officejet 4620 Wireless Multifunction Printer - Wireless Printers (Google Affiliate Ad)?

Dow 12,795.96, +207.65(1.65%)
NASDAQ 2,916.07, +62.94(2.21%)
S&P 500 1,386.89, +27.01(1.99%)
NYSE Composite 8,080.29, +148.74(1.88%)
NASDAQ Volume 1,766,584,880
NYSE Volume 3,335,809,500
Combined NYSE & NASDAQ Advance - Decline: 4681-872
Combined NYSE & NASDAQ New highs - New lows: 75-85
WTI crude oil: 89.28, +2.36
Gold: 1,734.40, +19.70
Silver: 33.19, +0.819

Friday, November 16, 2012

John Boehner Rescues Markets... for Today

Stocks were slip-sliding away again on Friday until Speaker of the House, Republican John Boehner, emerged from a meeting with the president sounding very conciliatory and committed to a deal on the fiscal cliff issues facing the federal government.

Boehner spoke to the press just before noon, as stocks reached their lows of the day. Following his remarks that there was a "framework" in the negotiations - which include fellow Republican Mitch McConnell, Nancy Peolsi and Senate majority leader Harry Reid - stocks took off on a tear, with all the major indices quickly erasing losses and turing positive, where they remained, for the most part, into the close.

The Dow, which had been sporting a loss of 71 points, rallied 120 points in a matter of twenty minutes.

Boehner has a tricky path to navigate, between playing hard ball with Democrats while keeping his fellow Republicans - especially those of the Tea Party denomination - from mutiny and potentially blowing up negotiations, but for today, at least, he played the part of a Wall Street superhero.

A couple of other salient points on which to close out the week:

October industrial production dropped 0.4% and capacity utilization fell from 78.2 to 77.8, a significant decline, suggesting that the economy may not be just limping along, but actually slipping.

The advance-decline line was positive for the first time this week, though new lows were once again ahead of new highs, for the eighth consecutive session, or, for those cynics in our midst, since the re-election of President Obama.

It was a real downer of a week for the bulls, especially being options expiry on Friday, a day usually reserved for back-slapping and rounds of drinks over big scores. There was probably more crying into beers late this afternoon than glad-handing fellow insiders.

That's a wrap, and don't expect much next week, as the market faces a short week with a half-day session on Black Friday, the day after Thanksgiving. Additionally, President Obama will be visiting the Far East during the week, so no meaningful negotiations are likely until his return and after the weekend, leaving the politicians just about four weeks before Christmas to work things out.

Good luck with that.

Dow 12,588.31, +45.93 (0.37%)
NASDAQ 2,853.13, +16.19 (0.57%)
S&P 500 1,359.88, +6.55 (0.48%)
NYSE Composite 7,931.55, +34.67 (0.44%)
NASDAQ Volume 2,191,482,500
NYSE Volume 3,991,566,750
Combined NYSE & NASDAQ Advance - Decline: 3638-1796
Combined NYSE & NASDAQ New highs - New lows: 28-329
WTI crude oil: 86.67, +1.22
Gold: 1,714.70, +0.90
Silver: 32.37, -0.304

Thursday, November 15, 2012

Stocks Stabilize, Still End Lower as More Trouble Looms

After Wednesday's wicked downdraft, cooler heads prevailed in Thursday's trading, keeping losses to a minimum as bargain-hunters swooped in to snatch up some shares of stocks which look to be marked down for a pre-Christmas sale.

Whether or not these so-called "bargains" will turn into winners is anybody's guess, though the real experts in market dynamics see more trouble ahead as Washington tries to come to a deal before January 1 of 2013, when mandatory spending cuts and tax increases are set to take place.

Placing one's hope - and one's money - on politicians in Washington actually accomplishing anything of such importance is akin to betting on a cheap claimer in a stakes race: the odds are very much against it.

As was the case with the battle over raising the debt limit last August, the DC crowd has shown no willingness to compromise on much of anything and the "fiscal cliff" issue is right up drama alley for our clownish elected leaders.

Eventually, the adult in the room seems to be the president, Barack Obama, who must navigate the press and the pressure of dealing with an intractable house of representatives, whose sole mission seems to be to spare the wealthiest two percent of earners any tax increases, even at the peril of the nation.

How this tableau will eventually play out is somewhat predictable. It will be taken out to the last possible moment, and quite possibly beyond. Word is that the legislators have until mid-February to actually come to their senses and a deal if the United States is to avoid an utterly avoidable recession, caused entirely by public policy.

This play has certainly caught Wall Street's attention, as evidenced by the sharp declines over the past month and especially since the election, just over a week ago.

What some market participants fail to realize - or won't say publicly - is that the market may well have already run out of gas, almost all of it supplied by the magnanimous Federal Reserve, whose QE policies have injected trillions into the hands of the banking cartel.

The Dow and S&P made double tops in mid-September and early October, then failed to surpass those highs later in the month, a classic chart pattern signaling a primary trend change and a bearish one, similar to the breakdown in the fall of 2007.

As for the NASDAQ, it didn't even bother to retrace the highs of September, simply capitulating in October and continuing a cascading fall, closing in quickly on the June lows.

If this is the beginning of a bear market, the foolery in Washington will be nothing more than a sideshow. The economy - both here and globally - is in a weakened condition already and may not be able to sustain even a medium shock, much less one that raises taxes and trims budgets, reducing head-count, and thus, overall spending.

Add to that the double-dip recession now official in the Eurozone and growing tensions in the Middle East and the recipe for disaster is laid bare.

Wall Street and its brokerage houses should emblazon their entrances with a warning sign: Beware Falling Stocks.

Today's minor decline could be seen as somewhat remarkable in the face of some disturbing economic events. Initial unemployment claims rose dramatically, from 361K to 439K this week, due partly to the effects of Hurricane Sandy. The Philadelphia Fed manufacturing survey laid an egg as well, posting a reading of negative 10.7 on expectations of a fat zero.

Besides the internal damage done to markets, all of the major indices are now firmly moored below their 200-day moving averages, not a pretty sight until some catalyst comes along to change the dynamic, and none appears to be on the horizon.

The advance-decline line was still severely negative and new lows exceeded new highs for the sixth day in a row.

All signs point to further weakness, though a technical bounce could send stocks up briefly, but the holiday season, thus far, isn't shaping up to be a very jolly time.

Dow 12,542.38, -28.57 (0.23%)
NASDAQ 2,836.94, -9.87 (0.35%)
S&P 500 1,353.32, -2.17 (0.16%)
NYSE Composite 7,896.87, -6.56 (0.08%)
NASDAQ Volume 1,975,168,625
NYSE Volume 3,892,497,250
Combined NYSE & NASDAQ Advance - Decline: 1954-3591
Combined NYSE & NASDAQ New highs - New lows: 25-456 (this is extreme!)
WTI crude oil: 85.45, -0.87
Gold: 1,713.80, -16.30
Silver: 32.67, -0.206

Wednesday, November 14, 2012

Stocks Take Another Beating; Dow Off 185, NASDAQ in Correction

All the issues and problems facing the US and global economies are coming home to roost in a perfect storm of excessive debt, fiscal intransigence, monetary experimentation, overpriced equities, general distrust of leadership, lack of growth, geopolitical tension and poor earnings prospects for corporations.

The selloff today was a continuation of what's been occurring since before the election, but has accelerated dramatically since. Wall Street is quite unhappy with prospects that President Obama will not budge from his position to eliminate the Bush tax cuts on the wealthiest two percent of Americans, as emphatically spelled out in an early afternoon press conference.

The president was cool, calm and collected, fielding questions on a variety of topics, but, even though he mentioned compromise frequently, he did not waver in his commitment to tax the wealthy at more than their current rates, including gains on investments, particularly - Wall Street fears - regular income and dividends.

Taking their cue from the president's message, stocks, which opened briefly higher, but quickly fell deep into the red, made new lows nearing the end of his remarks and continued lower into the close, the Dow suffering a 185-point loss and the NASDAQ reaching levels 10% below their recent highs, crashing into correction territory.

With all of the major indices, including even the Russell 2000 of mostly small cap stocks, continuing their descent below their respective 200-day moving averages, bottoms were sought out, though none could be found.

The massive run-up which began in March of 2009 is being unwound, with most of the blame being laid upon the politicians in Washington, DC, though there are more than a few more scapegoats, notably the greed and feed crowd that started the entire mess - the irresponsible banking community and their masters of control, the Federal Reserve.

With the dual policies of ZIRP and massive monetization, the Fed enabled much of Wall Street's excess and continues to do so even today. The neo-Keynesian policies of Ben Bernanke and his predecessor, Alan Greenspan, has spawned a debt bubble deflation crisis that they cannot - as much as they try - spend their way out of.

Most individual investors have been fleeing the market or have already taken their seats on the sidelines, so the damage being done to stocks is going to impact the middle and upper classes the most, with 401k, investment and pension plans taking the brunt of the declines.

In particular, Dow stocks, seen by many as representing the core of American industrialism, have lost more than 1100 points since their highs in early October, erasing most of the gains made throughout the year.

While Washington politicians dither over negotiations to avoid massive tax increases and huge budget cuts (which some say are needed), investors are worried that whatever solution they arrive at will be too little, too late and more of a can-kicking exercise than real reform.

With the holidays fast approaching, Americans are not in a mood for more business as usual from either Wall Street or Washington, and the anger is growing, even on Main Street, where small businesses continue to suffer or skirt taxation completely.

The next few days and weeks could easily turn into a crisis more severe than that of 2008, since none of the improprieties produced by that financial peer into the abyss have yet to be resolved, and now there are fewer measures the Fed or the Treasury can employ to keep the economy afloat.

If anyone thought that the crisis in America was over - to say nothing of the even worse conditions in Europe - they should pay close attention to what happens over the next sixty to ninety days, because they will surely be replete with wild market swings, irony and recriminations from all sides against each other.

Surviving into and beyond 2013 will be a major test of not only the American spirit but of Americans' willingness to accept leadership. President Obama's election to a second term was probably the correct choice, but he alone cannot fix the mess others created.

After today, the bankers and the wizard genii of Wall Street should be running for cover they should have sought out years ago.

Today was a truly dark day, though, from the looks of things, there are many more to come.

Grow some crops if you can, stay close to home and loved ones, and remember our motto: FREE HOUSES FOR EVERYONE!

Dow 12,570.95, -185.23 (1.45%)
NASDAQ 2,846.81, -37.08 (1.29%)
S&P 500 1,355.49, -19.04 (1.39%)
NYSE Composite 7,903.42, -119.81 (1.49%)
NASDAQ Volume 2,103,531,000
NYSE Volume 4,062,878,250
Combined NYSE & NASDAQ Advance - Decline: 822-4741
Combined NYSE & NASDAQ New highs - New lows: 39-333 (WoW!)
WTI crude oil: 86.32, +0.94
Gold: 1,730.10, +5.30
Silver: 32.88, +0.393

Tuesday, November 13, 2012

Slipping Over the Fiscal Cliff? Stocks Dumped at End of Day

Today's late day action isn't what has been the norm for this artificially-pumped-up market for the last three-and-a-half years. Normally, at the end of the session, the markets stage a "miracle" rally out of the blue, then send futures soaring into the next day's trading.

Today was a little bit different and investors better get used to it or get out, go short or just suffer losses.

Fear of the US going over the fiscal cliff and sending the economy into a tailspin recession would be an unabashed disaster, but that seems to be more on the mind of traders than anything else these days. The problem is that the issues facing the US government aren't going away soon and aren't likely to be solved by a president who's done little in four years and a congress that's done nothing good for the American public for the past 12.

So, after taking on a 67-point loss on the Dow in early trading, stocks regained their momentum (what little there was), based largely on results from Home Depot (HD) which beat third quarter estimates and was traded up to a 12-year high on the day. As has been the pattern recently, however, the rally which took the Dow up 83 points was quickly sold off, and, in the final hour of trading, stocks took the beating they so richly deserved in the morning.

If not for the bogus midday rally (which, remarkably, was a pan-Atlantic event, taking all European stock indices up sharply at the closes of their sessions), the Dow may well have suffered a 100+ loss, but the day-trading crowd that controls all buying and selling with their wickedly fast HFT computer algos couldn't have that, so, the small loss is what got cooked into the day.

With no economic news and very few significant companies reporting third quarter earnings, the markets are stuck with waiting on the government for solutions, and, from what we've seen here and in Europe and Japan, that can be a long and painful wait.

The action continues tomorrow, with just two days left before options expiration on Friday. This current round hasn't been pretty nor profitable for many.

It was the fifth straight day in which new lows topped new highs (and by a widening margin) and the same for the A-D line being negative. all of the major indices are trading below their 200-day moving averages, with no relief in sight.

Dow 12,756.18, -58.90 (0.46%)
NASDAQ 2,883.89, -20.37 (0.70%)
S&P 500 1,374.53, -5.50 (0.40%)
NYSE Composite 8,023.23, -30.83 (0.38%)
NASDAQ Volume 1,814,780,250
NYSE Volume 3,427,123,250
Combined NYSE & NASDAQ Advance - Decline: 1773-3741
Combined NYSE & NASDAQ New highs - New lows: 56-249
WTI crude oil: 85.38, -0.19
Gold: 1,724.80, -6.10
Silver: 32.49, 0.035

Monday, November 12, 2012

Tug-of-War Continues on Wall Street as Stock Stay Flat

Is this the new, post-election normal, or, is there just so much uncertainty in the markets that half the crowd is buying while the other half is selling?

One thing is for certain: stocks have gone nowhere - eventually settling roughly where they started - for the second session in a row. This kind of directionless pattern leaves everybody shaking their collective heads, and, on a day like today - in which bond markets were closed in observance of Veteran's Day - it's assumed that nobody made much money, including the brokerages, because volume was so low.

Currently, there is a dearth of news and the markets seem to be waiting for some kind of resolutions in Washington over the issue of the "fiscal cliff," but if Wall Street waits until the politicians do a deal, it could be a long wait indeed.

With no catalyst to the upside and stocks sitting pretty much under resistance (the Dow and NASDAQ under their 200-day moving averages, S&P sitting right on its), there's a good probability that another leg downward could be forced by some outside event - a black swan, so to speak - though nobody has any idea where or what such an event would look like.

What is a little bit odd about the trading over the past two days is that it's so close to options expiry on Friday. One would normally be expecting a ramp-up, and, that could come on Tuesday or Wednesday, regardless of what anyone thinks, hopes or believes. Wall Street is still run on the dual emotions of greed and fear, and if there's no fear (the vix was well down today), greed will overtake it and move stoks higher. Traders have to trade, and they'd rather be advising clients to get in now, off the recent move lower, than be selling on their own or their clients' behalves.

The odd trading pattern that was evident on all the major exchanges saw the averages up for the first half hour, slide slowly to the lows of the day just after 11:00 am, bottom, and then race to highs of the day in a straight line between 12:15 and 1:15 pm.

That was all she wrote, however, as stocks took a stair-step pattern back to the break even line, making the day look like a day-trader's nightmare, which it may well have been.

There was virtually nothing notable to report in either Europe or the US, though Japan's economy shrank by 3.5% in the third quarter, further evidence of the global slowdown. On the other side of the ledger, China announced strong exports, but their data has been proven time and again to be often more fiction than fact.

China may well have increased exports recently, but to whom, and why? Global demand has been flat to declining, so maybe China has rediscovered McDonald's secret sauce to fuel its success.

None of that mattered a whit in the US or Europe, which was also lackluster.

Tomorrow may be different, but, it may be more of the same. That's just the environment we have.

A couple of indications may be worthwhile in the advance-decline line, which was marginally negative, and the fat that new lows outpaced new highs for the fourth day in a row, something of a trend developing, maybe.

Dow 12,815.16, -0.23 (0.00%)
NASDAQ 2,904.26, -0.61 (0.02%)
S&P 500 1,380.00, +0.15(0.01%)
NYSE Composite 8,059.68, +6.11(0.08%)
NASDAQ Volume 1,351,375,130
NYSE Volume 2,503,732,250
Combined NYSE & NASDAQ Advance - Decline: 2343-2901
Combined NYSE & NASDAQ New highs - New lows: 89-174
WTI crude oil: 85.57, -0.50
Gold: 1,727.70, -3.20
Silver: 32.38, -0.147

Friday, November 9, 2012

Wall Street Peers Over Fiscal Cliff, Likes the View, Maybe

Only in the Wall Street casino can such madness prevail.

When the S&P 500 index closes almost exactly on its 200-day moving average on a day in which it was down, then up sharply, then down, then up again and finally closing almost where it started, one has a sense of the level of manipulation designed to produce the maximum level of uncertainty.

It's working.

The day started with stocks down sharply, but slowly advancing in anticipation of Rep. John Boehner's brief news conference shortly after 11:00 am ET, during which it sold off slightly before rising - after his very abrupt departure - to what would turn out to be the highs of the day, up 78 points on the Dow, just before President Obama made prepared remarks at 1:07 pm. During and just after the president's appearance, the Dow lost all of its gains and fell briefly into negative territory, a move of 103 points in just under an hour.

Stocks spent the rest of the afternoon folling along the line of unchange, with a couple of sharp rises just to keep things interesting.

Naturally, the final hour turned into a circus microcosm of the day, with the Dow up, down, up, down and eventually closing with a gain of four points.

So much for resolution.

The dueling parties in Washington preened and postured for the cameras and microphones while the wise guys in New York pushed buy and sell buttons with just enough pressure to keep markets in suspended animation for the full session, miraculously ending with gains of less than 10 points on all exchanges (four or less excluding the NASDAQ).

It was politico-socio-psycho-econo theater at its best.

There's surely more to come from the recently-re-anointed crowd in Washington and the usual suspects in New York as we end our way through the final seven weeks of 2012.

While the news and financial networks scramble and flail about trying to explain the undesirable effects of falling over the "fiscal cliff," though Wall Streeters seem perfectly at ease tip-toeing along the precipice. One gets the distinct feeling that the deal has already been struck and the rest is just for show.

How to trade it? Well, one can take the virtuous route and ignore it all, or play along with the pros and prepare to be beaten by their wickedly swift HFT algos which scan and skim every trade.

Bottom line is that there is no actual bottom line, so long as Ben Bernanke sits quietly in the background, his finger poised to punch up another couple hundred billion dollars as needed, along with his counterpart, Mario Draghi, in Europe.

Did somebody mention Europe? That place where equally nothing matters? Yes, they're still out there, kicking their own can further down the road to perdition.

With the elections in the US over and done with, it's back to business as usual, wherein neither the politicians nor the bankers can lose.

For all you poker fans, the market did leave a couple of "tells." Gold and silver notched nice gains again, and, for the third day in a row, new lows slaughtered new highs, 231-76.

That's a pretty fat slice of salami laying out there, Wall Street. Some of us actually notice... and our appetite is good.

Dow 12,815.39, +4.07(0.03%)
NASDAQ 2,904.87, +9.29(0.32%)
S&P 500 1,379.85, +2.34(0.17%)
NYSE Composite 8,053.56, +2.74(0.03%)
NASDAQ Volume 1,802,865,630
NYSE Volume 3,572,545.750
Combined NYSE & NASDAQ Advance - Decline: 2707-2778
Combined NYSE & NASDAQ New highs - New lows: 76-231
WTI crude oil: 86.07, +0.98
Gold: 1,730.90, +4.90
Silver: 32.60, +0.359

Thursday, November 8, 2012

Stocks Get Whacked Again; Dow Down 100+; Support on Major Indices Breached

Make no doubt about it, there's real fear on Wall Street.

For the second day in a row, stocks spent the day wallowing in negative territory, amid fears of the fiscal cliff - higher taxes, imposed budget cuts, more - the souring condition of the European Union, notably Greece and, yes, Germany, post-election hand wringing, and generally overpriced stocks in a market that is supposed to be buoyed by unlimited bond purchases by the Federal Reserve.

Word to the Street: It's not working.

Stock market participants who were brave enough to bid stocks up at the open (aka, suckers) were immediately punished for thinking that after the worst down day in a year on the Dow, stocks were ready to rebound, as all the major averages got a brief boost at the open but fell back into the red shortly after the first half hour of trading.

Trading volumes were brisk and stocks continued to gyrate lower, finally ending with a rush to finish at the lows of the day right at the closing bell, hardly an encouraging sign for those who believe this recent pull-back was nothing but blues for Mr. Romney's loss in the presidential sweepstakes.

All of the major indices closed below their 200-day moving averages, the first time this has happened since the end of May, beginning of June, when investors were worried that the Fed would not extend its easing measures (they did, of course).

In the current environment, traders are more or less on their own. Many funds have closed their books for the year and are taking on losses as sharp-nosed hedge fund managers skewer the slow-footed and long-term types with shorting and controlled demolitions of individual stocks and groups. High beta stocks, which posted the greatest gains over the past 10 months, are being hammered relentlessly as profit-taking has become more akin to skinning tomatoes, a slippery job at best and a troublesome trade at worst.

There are scant buyers, though the "semi-invisible" hand of the Plunge Protection Team (PPT) may actually be keeping stocks from falling directly into the East River or beyond.

Foreign markets have been hard hit as well, with almost all Asian, European and Latin American markets feeling the pinch the past two days.

In Europe, the truly laughable situation that the ECB finds itself in is truly one for he history books, as Greece steps closer to civil war after voting once again for austerity measures and another round of cash from the monetary authorities in Brussels and Germany. Thing are relatively quiet in the other Southern European detor nations, though Spanish bond yields are beginning to rise, frightening everybody from Angela Merkel - who wants more time (sorry, honey, you've had enough) - to Mario Draghi, who has expressed openly that the lone bright spot in the EU - Germany - is beginning to lose its luster.

Thankfully for most traders, tomorrow is Friday, making the end of what will likely go down as one of the worst weeks of the year, with the Dow down more than 400 points thus far, and the issues presented to the market anything but resolved.

It's been said many times that the market hates uncertainty, and that's all they've got in front of them presently. Worse yet, the underlying conditions set by global central bankers are proving more destructive and costly than anyone could possibly have imagined (except for a few select bloggers and out-of-the-mainstream market watchers). The favored positions of bailing out banks, major companies and sovereign nations with increased easing of monetary policy and near-zero interest rates has created an environment with no escape hatch.

The hands of the central bankers are tied, and with them, all appendages of the trading community. If there was ever a time to book profits (what's left of them), it's now, or rather, it was Tuesday. Since the massive ramp job in anticipation of a Romney victory, stocks have been beaten and battered to a point at which the Dow now sports a gain of less than 600 points on the year, roughly a five percent move from the close of 12217.56 on December 30, 2011.

The NASDAQ being the hardest-hit in the recent downtrend, had the most to give up and is still holding onto a gain of nearly 300 points, having begun the year off the close at 2605.15 at the end of last year. Starting the year at 1257, the S&P 500 is still holding onto a 120-point gain, just less than 10% higher on the year, which, in normal times, would be considered excellent, but those gains seem to be eroding faster than the confidence that the Democrats and Republicans in Washington can find an ultimate solution (they can't; they're broke themselves).

New highs have been subsumed by new lows, 91-185, the second straight day in which the lows have registered a win. It, however, this is just the beginning of a correction of seven to fifteen percent, there's further to fall, something many on wall Street don't want to think about until maybe Monday, when all hell may break loose.

There's still one more day to get through this week and all pretense has been removed. There's a general fear about being in the market at all presently and the last man standing is not the preferred position, nor is the act of catching a falling knife, currently the only places left on the market floor.

From a chartists' perspective, the move lower was nearly overdue, but the timing could not have been more predictable after the major indices made new highs in early October, fall back, and failed to achieve those same levels later in the month, at which point began the eventual fall-out. The bull market which began in March of 2009 is now getting a little long in the tooth, at 44 months, and it could be all she wrote as third quarter results were messy to horrifying and Wall Street's dirty little secret - that stocks are not growing their earnings - is beginning to get out.

Tomorrow could see a bit of a snap-back, dead cat bounce, but all indications are that more pain is ahead and that period could extend through the remainder of 2012 and into next year.

There were winners, ominous ones at that: gold and silver.

Dow 12,811.32, -121.41 (0.94%)
NASDAQ 2,895.58, -41.71 (1.42%)
S&P 500 1,377.51, -17.02 (1.22%)
NYSE Composite 8,050.83, -87.98 (1.08%)
NASDAQ Volume 1,876,133,130
NYSE Volume 3,759,670,250
Combined NYSE & NASDAQ Advance - Decline: 1462-4062
Combined NYSE & NASDAQ New highs - New lows: 185-91
WTI crude oil: 85.09, +0.65
Gold: 1,726.00, +12.00
Silver: 32.24, +0.579

Wednesday, November 7, 2012

Obama Wins; Stock Market Sinks on Tax Hike, Fiscal Cliff Fears, Europe

Tuesday was an early night in terms of presidential politics as President Barack Obama was elected overwhelmingly to a second term, whipping Republican challenger in almost every battleground state and winning the popular vote handily.

With the vote in Florida still being tallied (anybody surprised?), the Sunshine State turned out to be mostly inconsequential as the president swept the key states of Virginia, Ohio, Wisconsin, Iowa, Pennsylvania (which never really was in play), New Hampshire, Colorado and Nevada. Romney's sole win in the so-called "swing states" was in North Carolina, a state which Obama took by a narrow 0.3% in 2008.

Once the midwest states of Wisconsin, Iowa and Ohio were declared for Obama, the race was over, but it wasn't until after midnight in the East that Mitt Romney gave his concession speech and later, President Obama gave a ripping, rhetorical speech extolling the virtues of freedom of choice, tolerance and working together toward shared goals and the great creation of our founders, the United States of America, individual states bound together by social compact.

In the House and Senate races, the makeup of congress remained largely the same, with Republicans dominating the House and Democrats strengthening their grip on the senate, winning key races in Virginia, Florida, and, especially, Massachusetts, where Elizabeth Warren, the fiery consumer rights advocate, took the seat away from Republican incumbent Scott Brown, in a major setback for big banks.

Warren, who worked on TARP and other reforms in Washington, especially the implementation of a consumer protection division at the Federal Reserve, will likely end up on the Senate banking Committee, possibly winning the chairmanship.

Another critical Senate race was won in Connecticut by Christopher Murphy, who defeated Linda McMahon, who wrestling millionaire who spent $100 million on her own campaign.

Jon Tester retained his Senate seat from Montana in a close race with Republican challenger Denny Rehberg, keeping the balance of power firmly in their control with 55 seats, along with one independent, Bernie Sanders of Vermont. The Democrats likely gained another ally when former governor, independent Angus King of Maine, won an open Senate seat that had been held by Republican Olympia Snowe. King has not indicated which party he would caucus with, though most believe it will be with Democrats. King won on the simple idea of making filibusters less of an effective measure in killing legislation, believing that excessive filibustering by Senate Republicans had blocked almost all significant legislation over the past four years.

There was little change in the House, as Reublicans retained control with 232 seats to 191 held by Democrats with a number of vacancies.

It wasn't long before other voices began to be heard, especially those on Wall Street who had been counting on a win by Republican Romney. Before the market opened, futures began a steep decline, though the catalyst may have nad more to do with comments by ECB president Mario Draghi and some dismal production figures from Germany, regarded as a stronghold in the recession-plagued continent.

Shortly after Germany's industrial production was reported to have fallen 1.2% in September, Draghi said that the crisis in Europe was beginning to take its toll on the industrial powerhouse that is the German economy.

Heading into the first post-election session, Dow futures were pointing toward a loss of more than 100 points at the open, and the result was worse, with the 132-point gain from Tuesday wiped out in the opening minute.

Stocks continued their descent until bottoming out just before noon, down 369 points, the biggest decline of the year, though some strengthening took all of the indices off their lows as the day progressed.

Still, the losses were dramatic and especially in the banking sector, where ank of America (BAC), Goldman Sachs (GS), JP Morgan Chase (JPM) and other big bank concerns were off more than five percent. All 10 S&P sectors finished in the red, the S&P could not defend the 1400 level and nearly bounced off its 200-day moving averages, the NASDAQ - aided by Apple's continued decline into bear market territory - broke down below its 200-DMA and the Dow closed below its 200-DMA for the first time since the beginning of June.

In Greece, rioters threw fire bombs at police in anticipation of another vote on austerity measures designed to pave the way for another round of financing from the troika of the IMF, EU and ECB. The vote, scheduled for midnight in Greece (5:00 pm ET), is expected to pass, though the populace has seemingly had enough of policies dictated by outsiders.

For Wall Street, the day presented a perfect storm of disappointment, fears of higher taxes on dividends, tighter regulations of banks, uncertainty over tax and spending policies heading into 2013, and renewed concerns over our trading partners in Europe.

The steep declines may have only been a beginning, however, as no policies have changed, and, actually, the political makeup in Washington remained the same as it had been the day before. The continued gridlock coming from the White House and Capitol Hill may be the most disconcerting factor of all.

Some internal damage was done to markets, with the advance-decline line showing a nearly 5-1 edge for losers and new highs being surpassed by new lows, 94-174.

With none of the important initiatives nearing resolution, there seems to be nowhere for the market to go but down, now that the election is over, earnings season is just about finished and the market must focus on fundamentals and locking in gains for the year. The remainder of 2012 may prove to be quite challenging to investors.

Dow 12,932.73, -312.95 (2.36%)
NASDAQ 2,937.29, -74.64 (2.48%)
S&P 500 1,394.53, -33.86 (2.37%)
NYSE Composite 8,138.80, -173.55 (2.09%)
NASDAQ Volume 4,322,112,500
NYSE Volume 2,059,028,750
Combined NYSE & NASDAQ Advance - Decline: 961-4613
Combined NYSE & NASDAQ New highs - New lows: 94-174
WTI crude oil: 84.44, -4.27
Gold: 1,714.00, -1.00
Silver: 31.66, -0.373

Tuesday, November 6, 2012

Romney Rally Fades Into Close; Gold Silver Up Sharply

Wall Street is still largely clinging to the belief that their one-percent incarnation, Mitt Romney, can somehow pull rabbits out of hats or extra votes out of swing states and capture the 2012 presidential election.

Cynicism, in opposition to this view runs high, as Wall Street has proven, time and again, that it doesn't care, nor does it matter, who holds the reigns of power; they will buy them off at any cost, usually one much lower than they're willing to pay.

Based upon the wide-eyed optimism over a Romney presidency = which would fit neatly with a Republican-led House of Representatives - stocks bolted higher at the open, boosted again just prior to the noon hour and faded slightly into the close. The Dow was up 178 points at the day's heights, closing weakly on moderate volume.

All of the major indices showed strong gains, led by the Industrials, which added just more than one percent. Iy was the third point movement of between 130 and 140 points in the last six sessions.

Recently beaten-down commodities also posted impressive gains. Gold raced back above the $1700 mark, oil and silver also made significant headway.

The big prize comes tonight, with polls in Eastern states closing beginning at 7:00 pm. The first big tests will be Virginia and Ohio, with plenty of twists and turns to the political narrative in store as the night wears on.

Dow 13,245.68, +133.24 (1.02%)
NASDAQ 3,011.93, +12.27 (0.41%)
S&P 500 1,428.39, +11.13 (0.79%)
NYSE Composite 8,311.67, +71.42 (0.87%)
NASDAQ Volume 1,744,160,250
NYSE Volume 3,261,801,000
Combined NYSE & NASDAQ Advance - Decline: 3724-1748
Combined NYSE & NASDAQ New highs - New lows: 198-61
WTI crude oil: 88.71, +3.06
Gold: 1,715.00, +31.80
Silver: 32.03, +0.906

Monday, November 5, 2012

Calm Before the Storm; Markets Flat One Day Prior to Elections

Election Day is tomorrow, and markets mimicked the mood of the country, delivering a nothing session in the wake of the monumental event on the horizon.

Stocks were down hard in the morning, but buyers stepped in to stabilize the situation, eventually boosting stocks in the final half hour to close near the highs of the day.

That's about it, since there were scant earnings announcements of little importance, and everybody laying down - or not - bets on tomorrow's election outcome. All the major indices close positive, though only slightly, and trading volume was sub-standard.

Dow 13,112.44, +19.28 (0.15%)
NASDAQ 2,999.66, +17.53 (0.59%)
S&P 500 1,417.26, +3.06 (0.22%)
NYSE Composite 8,240.26, +5.34 (0.06%)
NASDAQ Volume 1,464,733,000
NYSE Volume 2,898,888,000
Combined NYSE & NASDAQ Advance - Decline: 3016-2454
Combined NYSE & NASDAQ New highs - New lows: 102-79
WTI crude oil: 85.65, +0.79
Gold: 1,683.20, +8.00
Silver: 31.13, +0.271

Friday, November 2, 2012

Wall Street Taketh Away: Jobs, Sandy Aftermath Not Pretty

Remember the big ramp-up in stocks yesterday, based upon the new, revised-metholdology ADP October jobs data?


That is despite a big beat in the non-farm payroll data released prior to Friday's open. The BLS said that the US created 171,000 net new jobs in the month of October, and, initially, the stock jocks loved it, pushing futures higher and sending the Dow Jones Industrials up 57 points at the open.

Trouble was, however, that the positive jobs data had already been priced in, off of the ADP beat. So, sorry, Charlie, no profit for you if you're a dollar short and a day late, as is the case. By 10:00 am, the Dow was flat. It and the other indices crawled lower through out the day, with the losses accelerating in the final two hours of the session.

There were other factors to stocks - and commodities - giving back everything on the final day of trading for the week. Corporate reporting for the third quarter has been seminally sour. Today's miss was by Chevron (CVX), a Dow component, which saw third-quarter net income fall to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.

Chevron earned $2.55 per share, compared with the analysts' average estimate of $2.83. Oops! Poor babies, their efforts to skin every last dollar from the pockets of US consumers weren't quite as good as last year. The price of oil is down and headed even lower today.

Somebody send a memo to the CEOs of the energy companies and other Fortune 500 CEOs: there's a global slowdown going on, mostly because you guys have overpriced everything from baby formula to burials, and people simply can't foot the bill any more.

Other than sliding corporate earnings (note: Most major corporations are still massively profitable, just not as profitable as last year, or, in some cases, last quarter, but some, like Sharp and Panasonic are close to bankruptcy, with more to follow), there's a litany of issues facing the global economy, like the fiscal cliff and mountains of debt and unfunded liabilities worldwide (no small matter), the continuing crisis in Europe (still unresolved and getting worse), the uncertainty of the presidential election in the US (hint: Obama's going to win easily, which is another reason Wall Street is unhappy), and this little inconvenient storm called Hurricane Sandy, which still has most of the New Jersey shoreline, Long Island, Staten Island and lower Manhattan still without power and people suffering in cold weather, without fuel, food, and gas lines extending for miles in Jersey and New York, not because there's no gas, but no electricity to power the pumps and stations, many of which remain closed.

Yep, things are not good overall, and, from the looks of things, they're not getting any better. The damages from Sandy will easily exceed those of Katrina. It doesnt take a genius to figure out that a massive storm which wreaked havoc on the most densely-populated area of the country is going to cost more than the laughable estimates of $20 billion that have been bandied about by so-called experts. Try $60 billion or more, maybe in excess of $100 billion, and that number is going to pt a serious dent in fourth quarter GDP.

The current wisdom being foisted upon the supposedly-knowledgeable investing community - that all the destruction from Hurricane Sandy will eventually be a net positive for the economy a la Frederic Bastiat's "broken window" parable - is complete media hogwash put forward by economist goon-whores like Moody's Mark Zandi, Mesirow's Diane Swonk and Deutsche Bank's Joe LaVorgna (yes, the Germans always like to have Italians do their dirty work), and are completely off base.

While NYC Mayor Bloomberg has been catching considerable flak - most of it well-deserved - for pushing ahead with the New York City Marathon this weekend, the long tail of Hurricane Sandy is likely to help push the US economy into recession in the fourth quarter of 2012 and beyond. Unlike Katrina, which concentrated its wrath upon New Orleans and the Southern shores, Sandy hit the highest income folks in the country, and that's not something that's going to be erased from the memory or the bottom line very easily. Just to make sure everybody's on the same page here, expect every fourth quarter profit miss to mention - at least in part - the effects of the hurricane on profits, whether real or imagined. Hurricanes and weather overall make for great scapegoats.

So, this week on Wall Street was more or less a wash. Two days closed, a flat day Wednesday, up Thursday and down Friday. The sharpie day-traders made a huge buck to be sure, but America and the global economy suffered terribly, NY marathon or not.

And, not to forget, Apple's iPad Mini was released for sale globally today. Lines were much shorter than for other Apple product launches, which goes to figure: you introduce a mini-tablet, you get mini-lines.

And, just to rub some salt into already open wounds, another storm is setting up to hit the Northeast next week.

Just what we all need.

Dow 13,093.16, -139.46 (1.05%)
NASDAQ 2,982.13, -37.93 (1.26%)
S&P 500 1,414.20, -13.39 (0.94%)
NYSE Composite 8,234.91, -76.45 (0.92%)
NASDAQ Volume 1,820,933,250
NYSE Volume 3,576,460,250
Combined NYSE & NASDAQ Advance - Decline: 1575-3880
Combined NYSE & NASDAQ New highs - New lows: 211-87
WTI crude oil: 84.86, -2.23
Gold: 1,675.20, -40.30
Silver: 30.86, -1.391

Thursday, November 1, 2012

ADP Jobs Data Sends Stocks Soaring; Hurricane Sandy Forgotten by Wall Street

Apparently, if we use Wall Street as a proxy for the general economy (which has proven over and over again to NOT be the case), the damages from Hurricane Sandy will not cost corporations anything. In fact, today's gains all but forgot that most of the Eastern coastline of the United States - from Maryland and Delaware to Connecticut - are federal disaster areas.

All that mattered to Wall Street was getting stocks higher, putting on a good face, especially after the "new methodology" of the ADP private payroll survey - with an assist from Moody's (now there's a clean bunch) - is acceptable in advance of Friday's October non-farm payroll data.

The ADP report was hardly believable, showing that there were 158,000 new private sector jobs created in the month of October. This makes the estimates for NFP of 250,000 tomorrow a slam dunk and possibly already priced in.

Off the ADP news, which was released at 8:15 am EDT, stocks shot up at the open, ramped to highs between 10:00 and 11:00 am and held their gains well into the close.

Everything's great! Except that real unemployment is somewhere around 15%, the US borrows 40% of every dollar it spends and fraud and manipulation by banks and corporations continues to go unchecked. Not to worry, we're going to elect Mitt Romney, who will fix it all, because the fix is in, at least according to Wall Street and Fox news.

There's another scandal brewing, however, that will overshadow everything up to this point in the now-four-year-old financial crisis, involving gold, specifically, the gold stored in vaults in New York and London for other nations. Germany has been trying to get a peek at their gold, but has been continually rebuffed.

Jim Willie's latest salvo at the banking elite has a very good take on the matters at hand.

Here's what one of the commenters had to say about gold and bankers:

“Tiny Ghana demanded its gold return from London, but suddenly its leader (John Atta Mills) showed up dead.”

We’re supposed to be surprised by this? Consider that president Andrew Jackson messed with the banksters and had 5 unsuccessful attempts on his life. President Lincoln messed with the banksters via printing debt-free greenbacks and ended up dead. President James Garfield supported a bi-metallic money standard and ended up dead. President William McKinley was assassinated after publicly supporting sound money and a gold standard. President Kennedy authorized the US Treasury to print silver certificates, interfering with the Fed’s position of sole US money creator and ended up dead. Am I missing anyone who messed with the banksters honey pot and was killed? Probably. Murdering your opponents IS the routine behavior of a thugocracy.

Kind of says it all, doesn't it?

Dow 13,232.62, +136.16 (1.04%)
NASDAQ 3,020.06, +42.83 (1.44%)
S&P 500 1,427.59, +15.43 (1.09%)
NYSE Composite 8,311.36, +89.97 (1.09%)
NASDAQ Volume 1,884,510,500
NYSE Volume 3,925,129,250
Combined NYSE & NASDAQ Advance - Decline: 3949-1550
Combined NYSE & NASDAQ New highs - New lows: 291-77
WTI crude oil: 87.09, +0.85
Gold: 1,715.50, -3.60
Silver: 32.25, -0.068