Friday, May 31, 2013

Where's the Money? Sellers Swamp Market Late on Last Day of May

The only major index that finished up on the last day in May was the Nikkei, but, that index closed the month in negative territory - not by much - but that was a result the "unlimited" QE by the BOJ was supposed to make impossible.

Impossibility. It's a word tossed around until the impossible become possible, then probable, then actually happens. The Titanic sank. Buster Douglas beat Mike Tyson. Secretariat lost (I was there, at the whitney Stakes at Saratoga in 1973). Sometimes, the Yankees don't make the playoffs, let alone win the world series.

As impossible as it may seem for the Dow Industrials to reverse course in the final 2 1/2 weeks of May and lose all the momentum supplied by $85 billion a month in bond purchases by the Fed, it happened. Unlimited money printing, when al is said and done, may not be the panacea for free market capitalism. In fact, it may be just the opposite, and Mr. Market may finally have seen enough, though we probably won't know, at the earliest, until Friday of next week, when the June employment data is released in the BIS non-farm payroll figures.

If this is the beginning of the end for failed central bank policy-making, that may take longer to discern.

In any case, stocks meandered in the early going on Friday, before settling into selling mode at 2:00 pm EDT, and really accelerating in the final hour of trade. There doesn't need to be a reason, just a sentiment, which could be a reality: that the general world economy is slow at best, receding, at worst.

It could be technical, since the US indices were making new all-time highs on just about a daily basis until just about a week ago.

The culprit could be bonds, as the 10-year's spike to 2.18 intra-day had some investors and speculators re-examining the stocks versus bonds paradigm.

Or it could be Ben Bernanke, whose exit strategy from the relentless easy money will be to retire from the chairmanship of the Federal Reserve. We wish him... well, we're not going there.

In any case, stocks sold off to give the Dow and S&P back-to-back losing weeks for the first time this year, with possibly more to come. Volume on the day was quite robust, the A-D line was better than 4:1 losers over winners, and, no, the number of new 52-week lows did not exceed the new highs, but it was close.

To finish off what could be a watershed week, here's Dan Hicks and His Hot Licks performing part of today's title, "Where's the Money" from the 1972 album of the same name:

Dow 15,115.57, -208.96 (1.36%)
NASDAQ 3,455.91, -35.38 (1.01%)
S&P 500 1,630.74, -23.67 (1.43%)
NYSE Composite 9,302.27, -157.79 (1.67%)
NASDAQ Volume 1,879,071,500
NYSE Volume 4,366,197,000
Combined NYSE & NASDAQ Advance - Decline: 1358-5007
Combined NYSE & NASDAQ New highs - New lows: 215-182
WTI crude oil: 91.97, -1.64
Gold: 1,392.60, -18.90
Silver: 22.24, -0.447

Thursday, May 30, 2013

Global Equity-Ponzi Bubble Expands (except in Japan)

Apparently, Japanese Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda just don't have the same financial panache as maybe Barack Obama and Fed head, Ben Bernanke.

If they did, their stock market - the Nikkei - would not have fallen five percent on Thursday, in a continuing downdraft in Japanese equities. Had they the skills of Bernanke, their stocks would have been up, like in the US, where the major averages shrugged off Wednesday's declines and rallied throughout the session.

Then again, maybe the Japanese have something up their sleeve, issuing new foreign exchange margin trading rules within the final hour of trading in New York, which prompted the markets - especially the Dow Industrials - to discard most of the gains on the day and cause the Dollar/Yen carry trade to slip into the red.

In today's economic landscape, controlled almost entirely by central banks, these kinds of things aren't supposed to happen. Stocks are always supposed to go up, the Yen must fall against the mighty US dollar (and all other currencies), bonds stabilize at historical low levels and unicorns puke up skittles and gold nuggets.

Maybe it's that last part - those gold nuggets - that have everybody nervous. Everyone knows that the spot, or paper, or futures gold price has nothing to do with the actual price of gold in physical terms and this disconnect, though held well below the surface purposely, because, in the words of the Great Bernanke, gold is not money and is something of an "ancient relic" in financial terms.

Well, that's just too bad, because gold has always been money, along with silver, and the price one pays for actual physical metal has become disjointed from all those other artificial prices, none of which entitles the holders of some precious scrip to actual, physical metal, and that's all that really counts in the end.

A promise to buy gold or silver or to have gold or silver or to receive gold or silver is not the same as actually holding it in one's possession.

In the long run, gold and silver will always be money. All the paper "equivalents" and substitutes will be about as worthless as... well, pieces of paper.

The wheels of the global Ponzi train to Zimbabwe are about to come off and the differences between that useless spot price and the real price of gold and silver are acting as the catalysts. When the markets finally collapse, which they - by mathematical certainty - must, fingers will be pointed everywhere: at the Fed, at the government, at the rich, at the poor, at Social Security, at China. But gold and silver will be blameless because, THEY ARE MONEY, and they will forever be money, despite Mr. Bernanke's views on the subject.

Dow 15,324.53, +21.73 (0.14%)
NASDAQ 3,491.30, +23.78 (0.69%)
S&P 500 1,654.41, +6.05 (0.37%)
NYSE Composite 9,460.05, +37.56 (0.40%)
NASDAQ Volume 1,746,768,625
NYSE Volume 3,812,669,250
Combined NYSE & NASDAQ Advance - Decline: 4070-2380
Combined NYSE & NASDAQ New highs - New lows: 295-80
WTI crude oil: 93.61, +0.48
Gold: 1,411.50, +20.20
Silver: 22.69, +0.237

Wednesday, May 29, 2013

Who Bought This Dip?

About the best that could be said about today's general market decline is that it could have been worse. Stocks were slammed right out of the opening bell, and quickly fell to their worst levels of the day. By around 11:00 am EDT, the Dow had slumped 180 points from the previous close, the NASDAQ was down 38, the S&P off by 20 and the Composite down a whopping 126 points.

Naturally, some traders smelled the unmistakable aroma of easy money, so the buying started in earnest, with the major averages getting back close to half of the losses by day's end.

Still, anyone buying this particular dip - which incidentally, began from a peak early in the morning on Tuesday - might not be in the chips any time soon, as the market of late has not shown a great propensity for quickly and quietly erasing losses from previous downfalls.

Despite yesterday's advance, stocks left half of the gains from early in the day off the table, vanished, so the decline on the Dow, from the top of 15,521.49 to today's close, is nearly 220 points, or, about 1 1/2 percent.

That surely isn't anything to write home about, but it is significant in a short, end-of-month week heading into the summer doldrums, so to speak. It's difficult to make a case for buying so close to a market all-time peak, but money has to go somewhere, it is said, though many outside the world of Wall Street are beginning to find better places for the dough than in stocks. Bonds have slumped as well, pushing up yields, the 10-year note hitting 2.16% yesterday before settling down at 2.11% today.

Other places people have been putting money are into homes, either as new purchases or renovations, classic and not-so-classic cars (everybody needs reliable transportation), arable land, small business machinery, art, collectibles, rarities, gold, silver and other hard assets.

If stocks continue to display weakness (or even if they continue to sprint back and forth and increase volatility) and the Fed continues twiddling and tweaking and cajoling the markets with jabberwocky talk about easing or tapering or slowing their bond purchases, people can and will look beyond the NYSE and the NASDAQ for better, tangible assets with intrinsic or functional value.

People may be wearying of the constant barrage of "suggestions" from the Fed, analysts, broker-dealers and other hucksters of equities and make the move to something that they can actually touch, feel and literally appreciate. Sometimes - and this may be one of those times - it's better to keep what money you have than to risk it in what appears to be a very risky environment.

Today's action was rather uniform, with all the major averages falling about the same percentage amount on better-than-average volume. If this looks like an orderly retreat, those who bought the dip midday might be wondering what happens when the market becomes a bit more disorderly.

Dow 15,302.80, -106.59 (0.69%)
Nasdaq 3,467.52, -21.37 (0.61%)
S&P 500 1,648.36, -11.70 (0.70%)
NYSE Composite 9,422.49 71.68(0.75%)
NYSE Volume 3,969,497,750
Nasdaq Volume 1,754,239,625
Combined NYSE & NASDAQ Advance - Decline: 1627-4849 (1:3)
Combined NYSE & NASDAQ New highs - New lows: 172-151 (narrowing of the gap)
WTI crude oil: 93.13, -1.88
Gold: 1,391.30, +12.40
Silver: 22.45, +0.26

Tuesday, May 28, 2013

The Faded Tuesday Rally

Sure, it was the 20th straight Tuesday in which stocks have advanced, which must be some kind of weird market record, but today's rally really wasn't what one would call robust or sustaining.

First, the volume wasn't there. Second, more than half of the gains made in the first hour of trading were eviscerated by 2:30 pm, with an uninspired late surge getting some of gains back. In the end, it was a nothing move, albeit higher, but with a fairly negative bias as the day progressed. It was almost as if nobody really wanted to be a part of the day's action, even after a three-day holiday.

More and more, people are talking about the great disconnect between main Street - where things aren't going so well - and Wall Street, where it's a party every trading day, and this kind of talk is beginning to make the rounds to trader's desks and onto the trading floors.

While stocks continue to reach new heights, there is scarcely a soul who really believes that stocks can continue to ramp higher. Thus, a top has either been reached or is nearby, simply because of changing, doubting sentiment, which, after all, is the heart and soul and lifeblood of any market.

We all know this cannot continue indefinitely, so the question is whether it all comes apart at once or slowly grinds lower in spurts and spasms over a longer period of time, possibly years, possibly many years.

That is what's known as the unknown unknown. As such, we offer no answers, only more questions.

This market is like an old pair of jeans. You know they're tattered and worn out, and need to go, but the memories of good times and the comfortable feel keeps you from parting with them.

Dow 15,409.39, +106.29 (0.69%)
NASDAQ 3,488.89, +29.74 (0.86%)
S&P 500 1,660.06, +10.46 (0.63%)
NYSE Composite 9,494.16, +51.93 (0.55%)
NASDAQ Volume 1,708,082,250
NYSE Volume 3,719,940,250
Combined NYSE & NASDAQ Advance - Decline: 4139-2471
Combined NYSE & NASDAQ New highs - New lows: 514-63
WTI crude oil: 93.53, -0.62
Gold: 1,378.90, -7.70
Silver: 22.19, -0.303

Friday, May 24, 2013

It's a Three-Day Weekend. Go Enjoy It, But Take Some Time to Read This

Catchy headline, huh?

If anybody really wants to spend time this holiday weekend wondering when the global financial system is going to finally melt down, this is not the place to look.

Our team of 300 editors (j/k) was let go at noon today for a weekend at the Hamptons, so all we're leaving you with are a few tidbits.

The most overlooked story of the day was how big retailers took it on the chin in the first quarter, most blaming "weather" as the root of their revenue and earnings misses.

Among the losers reporting on Friday were Sears (SHLD, 50.25, -7.92(13.62%)); Abercrombie & Fitch (ANF, 50.02 -4.35(8.00%)); Aeropostale (Aro, 14.76 -1.72(10.44%)) and; The GAP (GPS, 40.66 -0.70(1.69%)). While the mainstream tended to overlook these stunning losses - as they do all negative economic stories - consumers are apparently changing their spending habits, more along the lines of frugality and austerity, shunning brands and big-ticket items. Sears, BTW, is a dead entity. The market and the BOD just haven't realized it yet.

The other "tells" from today's disorderly trading were the low volume (nothing new there, move along), the drop in the NYSE Comp, which nobody pays any attention to, except us, since it is only one of the broadest measures of corporate America, the tape-painting which brought the Dow into positive territory and the other exchanges close to unchanged, the ongoing slippage in the A-D line and the compression in the new highs-lows (many fewer new highs the past few days, more new lows).

Make sure to remember what Memorial Day is all about, preserving the memory of those who died defending our values and freedoms. Semper Fidelis.

Dow 15,303.10, +8.60 (0.06%)
NASDAQ 3,459.14, -0.27 (0.01%)
S&P 500 1,649.60, -0.91 (0.06%)
NYSE Composite 9,427.63, -38.68 (0.41%)
NASDAQ Volume 1,364,804,375
NYSE Volume 2,753,824,000
Combined NYSE & NASDAQ Advance - Decline: 2894-3506
Combined NYSE & NASDAQ New highs - New lows: 128-37
WTI crude oil: 94.15, -0.10
Gold: 1,386.60, -5.20
Silver: 22.50, -0.012

Thursday, May 23, 2013

US Stocks Reverse Early Losses; How Buy-Backs Distort Corporate Earnings; John Cleese Plays Merchant Banker

After yesterday's Fed comments, overnight, Japan got whipsawed, with the Nikkei down more than 7% on the session. Markets in Europe also tanked, but here in America, where any news is regarded as good, markets erased massive losses garnered out of the gate (Dow was down 127 points early in the session) and finished nearly flat, though the major indices finished in the red (not enough POMO, one assumes).

What a horrible joke this market continues to be. It is amazing and disgusting at the same time. No matter what, however, it will never go down until the big players deem it is time to do so, and, obviously, today was not that time.

Today brings more information about how the rally in equities has been manufactured by corporations buying back record amounts of stock and thusly skewing earnings reports, making them appear positive when they are nothing but figments of creative accounting.

For simplicity purposes, when a company buys back its own stock, it takes it out of circulation, lowering the number of shares by which earnings are gauged, i.e., EPS or "earnings per share."

So, if Corporation A has 1000 shares outstanding, and profits of $2000, their EPS is calculated thus, $2000 (earnings) divided by 1000 (shares) = $2.00 earnings per share.

When corporation A buys back 100 shares and actually does a little worse, with profits of $1900, this looks positive because EPS is up, because $1900 in earnings is now divided by just 900 shares, not 1000, so the resultant EPS is now $2.11, even though the company is actually shrinking.

This will only become a huge problem when people en masse realize that most corporate profits these days are nothing more than financial trickery, though that could be a long time coming, considering how 95% of America is financially illiterate.

Bottom line, this will eventually be a great thing for America, when the fraud and rot is finally rooted out, because most of these giant corporations will be nothing but hollowed out shells and real Americans can begin rebuilding a real economy.

Max Keiser has the rundown in today's edition of the Keiser Report:

Here's a a comment from ZH, that explains a simple philosophy of life (with a few edits) in response to a comment to this article:

Having wasted the time it took to read most of this article, I found your example to be most profound and gave you the second up arrow. If I could somehow bestow more "ups" I would, but the point is that the article bases the plight of an entire generation - X, in this case - on luck, timing and the evils of the "system."

The article, like most presented by CHS, is more socialist bullcrap and your comment proves him 100% wrong. Anyone with initiative and a little bit of smarts and some skills can become self-sufficient and perhapes even "wealthy" or prosperous, as is the ongoing discussion with MachoMan.

Here's how I define prosperous (for myself, and I think I'm the richest guy in the world): No debt, paid-in-full domicile, with enough land to grow enough food for 1/2 a year for self or family. Steady income stream, few, or no employees. Obviously, I run my own business.

There are many ways to make more money - and keep almost all of it out of the hands of the government leeches - than having a "job." A job or career is like a yoke around one's neck; one is forever tied to that particular skill set. When that skill set becomes antiquated or overtaken by technology, one immediately becomes lost. Those who do for themselves almost never reach this state; instead, they find new ways to do things, are constantly in search of better ways to escape the tyranny of the system. Stay in the system and your life gets ruled by it. You become a slave to debt, government or keeping up with your peers, any one of which will suck the life out of you.

Stop measuring success by money and you'll find a richness of life right in your own back yard. I strongly recommend reading anything by Gene Langsdon, but especially the Contrary Farmer's Invitation to Gardening. Lots of insight on life, living and growing stuff you can EAT.

As an aside, I broke up with a gal eight months ago who was totally materialistic, to whom nothing mattered except how much one made, how new one's car was and how many cool gadgets you had. Life is so much richer since I began reading Langsdon (last year) and left that simple-minded troll behind. (And, no, I'm not bitter. I am justified.)

Bottom line, ditch that dead-end job and become your own boss. Take some responsibility for your own life and stop whining. You'll feel better and might just thrive on your own.

Since it's only Thursday and the major indices are already staring at losses for the week, a bit of humor at the expense of bankers seems most appropriate, as in the clip below wherein Monty Python's John Cleese plays Merchant Banker.

Dow 15,294.50, -12.67 (0.08%)
NASDAQ 3,459.42, -3.88 (0.11%)
S&P 500 1,650.51, -4.84 (0.29%)
NYSE Composite 9,466.81, -41.24 (0.43%)
NASDAQ Volume 1,720,003,000
NYSE Volume 4,272,195,500
Combined NYSE & NASDAQ Advance - Decline: 2807-3659
Combined NYSE & NASDAQ New highs - New lows: 85-59
WTI crude oil: 94.25, -0.03
Gold: 1,391.80, +24.40
Silver: 22.51, 0.036

Wednesday, May 22, 2013

Market Reverses Following Fed Minutes Release

The markets opened with ebullience after NY Fed President Bill Dudley's comments suggested that the Federal Reserve was not considering any major policy changes, with the Dow reaching the highs of the day - the Dow gaining 155 points - between 10:00 and 11:00 am EDT.

All of a sudden, when Fed Chairman, speaking before the congressional Joint Economic Committee, didn't absolutely rule out that the Fed could begin tapering bond purchases before Labor Day, stocks took an abrupt U-turn, but stabilized in positive territory.

Upon the release of minutes from the Fed's April policy meeting, however, things began to get ugly. The minutes revealed that some members of the FOMC thought they should be tapering - or easing - right away or as early as their June meeting, considering the effects of the program and how the economy seemed to have been improving.

That had a chilling effect on the trading floor, as volume picked up, and stock prices headed south in one of the most volatile sessions in some time - a full 276-point round-trip on the Dow industrials. The other major indices followed suit and actually recorded worse losses, on a percentage basis.

Today's key reversal was a triple-engulfing variety, eclipsing the highs and lows of the three previous sessions, and that, to chartists everywhere, screams of directional bias, in this case, to the downside.

Whether or not traditional chart theory will hold water in this artificial liquidity environment is anybody's guess, because stocks have shown recently an uncanny ability to disregard any kind of bad news, though this kind of news - that the Fed might be pulling back the punch bowl from the drunken, leveraged party that is Wall Street - is of a different nature altogether.

As far as bull and bear markets are concerned, we're still a far cry from calling a turn, though tomorrow, the bull's reign will be entering its 51st month and stocks have just exhibited the kind of explosive move to the upside that is indicative of final tops. The coming days, weeks and months will be critical if only to ascertain whether this move is a one-day event, the beginning of a short-term correction or the start of a bear market.

Key factors to consider in today's movement were volume - one of the highest of the year - the advance-decline line and how meaningfully traders will take the mixed messages from various Fed officials.

Another insight is how fruitless the markets have become, when the only pertinent news concerns whether or not the Fed will keep accommodating the broken banks and brokerages with historical low interest rates, which incidentally, shot higher today, the 10-year breaking through the 2.0% yield mark.

Even more important is whether the Fed is actually planning to take its foot off the gas soon or is blowing more hot air, i.e., jawboning the market.

Considering the relative performance of the US economy (sluggish at best) and the consequences of tightening policy even a little bit from this unprecedentedly-accommodative posture it might be best to take a wait-and-see attitude toward the markets in general. Rather than an abrupt, decisive move to the downside (though it could very well happen), some sideways movements in the markets would seem to make more sense, at least until there is clarity on Fed policy, along with a host of other potential market-moving issues.

Dow 15,307.17, -80.41 (0.52%)
NASDAQ 3,463.30, -38.82 (1.11%)
S&P 500 1,655.35, -13.81 (0.83%)
NYSE Composite 9,501.99, -96.28 (1.00%)
NASDAQ Volume 2,058,095,625
NYSE Volume 4,350,662,000
Combined NYSE & NASDAQ Advance - Decline: 1555-4990
Combined NYSE & NASDAQ New highs - New lows: 753-35
WTI crude oil: 94.28, -1.90
Gold: 1,367.40, -10.20
Silver: 22.47, +0.017

Tuesday, May 21, 2013

Stocks Advance on St. Louis Fed Chief's Comments

Question: How do you know when St. Louis Fed President James Bullard is advocating for the Fed to continue buying MBS and Treasuries?

Answer: When his lips are moving.

Bullard, one of the most dovish characters in the history of monetary policy, would probably advocate buying swampland if he thought it would goose the economy a bit, but let's not give him any ideas.

His lips moved today, and so did the markets, though in a suitably sheepish kind of way, off the highs, with the Dow far outpacing the other indices.

That was all one needed to know today about the doings on Wall Street. The real show continued down in that other viper's den - Washington, DC - where the IRS scandal widened and deepened. It's really not worth commenting upon at this stage of the game, but, a la Watergate, the number of lies are mounting, the stories are getting twisted, the number of guilty-looking witnesses growing and the conspiracy theorists are having a field day.

With any luck, President Obama will be dragged in by Labor Day, or before he and congress are supposed to get serious about the debt ceiling... again.

The sooner the trash is removed from the nation's capital (suggest starting with the Attorney General), the better.

Dow 15,387.58, +52.30 (0.34%)
NASDAQ 3,502.12, +5.69 (0.16%)
S&P 500 1,669.16, +2.87 (0.17%)
NYSE Composite 9,598.26, +10.72 (0.11%)
NASDAQ Volume 1,745,513,375
NYSE Volume 3,777,275,000
Combined NYSE & NASDAQ Advance - Decline: 3504-2926
Combined NYSE & NASDAQ New highs - New lows: 629-25
WTI crude oil: 96.16, -0.55
Gold: 1,377.60, -6.50
Silver: 22.46, -0.127

Monday, May 20, 2013

Stocks Close (mostly) Lower, But Metals Reverse Early Declines

Stocks were up, then down, then up, then down, never deviating far from the UNCH line, finally ending down, with the exception of the COMP, which was up marginally.

These moves were so minuscule and the volume so light that most of the traders could have taken the day off and nobody would have noticed.

What was noticeable were the moves in gold and silver, both of which were hammered lower in light Asian trading, before reversing course to finish with fairly impressive gains. In particular, gold, which had traded lower for seven consecutive sessions, ended nearly 1.5% higher and tacked on another $12 after the NYMEX close. Silver was also ramping higher in electronic trading, up another 40 cents from the open outcry finish.

If there ever was a key reversal day for the precious metals, today was it. The criminal central banking elites have been banging the metals lower for the better part of the past month, but Andrew McGuire, whistle-blower and expert metals trader, called this one over the weekend, saying the bullion banks were about to punish the shorts with a buying spree to replenish supplies depleted during the recent downward manipulation.

So far, that looks like a prescient call.

Stocks were unaffected by the moves in gold and silver, more attuned to the differing tones comeing from various Fed officials, most of whom are hinting that QEternity could be winding down (tapering) in short order. All the talk is nothing more than "jawboning" a tactic by which the Fed talks one way but actually has no intention of doing anything except continue current policy.

Such talk is needed to cool overheated markets, such as in US stocks, and, while its efforts have been mostly for naught - the indices keep rising - a problem the Fed does have to consider is that it is running out of things to buy, particularly MBS. At $40 billion a month, the Fed is effectively sucking up about 60% of all issuance, choking the market, which, after all, it the intent of the policy.

However, with rates so consistently low (and rising a bit of late), refinancing activity is expected to slow, which would push the Fed's buying up to 90% or more of issuance, and that would not only choke the market, but strangle it and kill it.

The same condition exists in Treasuries, but not to such a degree, though the government is on track to issue less in short-term notes than the Fed has scheduled to buy. This is a situation the Fed obviously did not consider when it embarked upon its gigantic bond-buying program, but, if taken out until the end of 2013, the folly of the Fed will be shown for all to see, i.e., the emperor having no clothes.

Should such a condition prevail, interest rates would rocket higher, stocks would tank and the federal deficit would then be reduced to spending much more - in percentage terms - to service its debts, prompting further borrowing, forcing the Fed to buy up even more debt.

An endless, non-virtuous circle, just as un-planned.

Dow 15,335.28, -19.12 (0.12%)
NASDAQ 3,496.43, -2.53 (0.07%)
S&P 500 1,666.29, -1.18 (0.07%)
NYSE Composite 9,587.51, +11.09 (0.12%)
NASDAQ Volume 1,687,899,125
NYSE Volume 3,556,500,250
Combined NYSE & NASDAQ Advance - Decline: 3699-2778
Combined NYSE & NASDAQ New highs - New lows: 768-36
WTI crude oil: 96.71, +0.69
Gold: 1,384.10, +19.40
Silver: 22.58, +0.23

Friday, May 17, 2013

Stocks End Week on Super-Duper High Note as All Indicators Are Ignored

Other than options expiry, there was no good reason for stocks to go higher today, though this market doesn't need any reasons or rationale for any kind of movement. So, it was not surprising that, on a day in which the only relevant data came from the University of Michigan consumer sentiment and the Conference Board's Index of Leading Economic Indicators - incidentally, the only two data points that were positive this week - that stocks would rise to new all-time highs on the Dow and S&P, while the NASDAQ continued its recent string of 12 1/2-year-highs.

Consumer sentiment catapulted from April's 76.4 to 83.7 in May, while the LEI came in with a gain for April of 0.6% on expectations of 0.3, after March's disappointing -0.2%, not that the prior reading mattered at all.

Stocks are raging, and to those who have invested and made money, congratulations. For those who have stayed on the sidelines, this is surely not an opportune time to invest, despite what all the financial pundits are saying, unless one believes it is wise to buy at all-time highs.

So ends another week in fantasy-land, aka, Wall Street.

Gold and silver were again taken out back and punished severely, but - big surprise - crude oil continued to march toward the $100/barrel level.

Happy motoring!

Dow 15,354.40, +121.18 (0.80%)
NASDAQ 3,498.97, +33.72 (0.97%)
S&P 500 1,667.47, +17.00 (1.03%)
NYSE Composite 9,576.41, +87.10 (0.92%)
NASDAQ Volume 1,820,408,750
NYSE Volume 3,736,158,250
Combined NYSE & NASDAQ Advance - Decline: 4518-1925
Combined NYSE & NASDAQ New highs - New lows: 703-45
WTI crude oil: 96.02, +0.86
Gold: 1,364.70, -22.20
Silver: 22.35, +0.307

Thursday, May 16, 2013

Stocks Have a Late-Day Reality Check (and reality wins)

After yesterday's golden sombrero (a baseball slang term denoting a player striking out four times in four at-bats) of economic data, today's market was welcomed with another 0-for-4 reading on economic data, that on top of Wal-Mart's (WMT) poor first quarter which was a miss on the revenue side, blamed, laughingly, on weather (we have it every day, dolts) and late income tax refunds (pure baloney).

Prior to the opening bell, initial unemployment claims came in at 360K, when the market was looking for a benign 335K, oops. At the same time, April CPI registered -0.4%, the worst showing (for inflationists) since 2007, and housing starts slumped rom 1021K in March to 853K in April, a massive fall-off and well below rosy expectations for 970K. So much for the "rebound" in housing which was supposed to be leading the recovery.

Topping off the list, at 10:00 am EDT, was the Philadelphia Fed's Manufacturing Index, expected to show modest growth to a humorous 2.5, but bolted out at -5.2, another sign that business activity is actually slowing down and doing so in a rather hasty retreat, not only in the US, but globally. France, apart from the farce that is Europe, is also heading deeper into recession, and China's growth is slowing considerably faster than anyone might have expected (except those who don't believe China's economic numbers in the first place).

Thus, stocks hugged the flat-line before caving in - around 3:00 pm EDT - to the pressure of eight straight missed on key economic data, a poor earnings season typified by revenue misses and the continuing crisis at the top of the federal government of not one, not two, but three separate scandals.

Market declines on the day were not exactly pronounced, but, checking the calendar and noting that this is the day before monthly options expiry, it all begins to make more sense. Nobody's yet brave enough to call this a top, but it sure looks like one, smells like one and has all the antecedent timing factors to actually be one.

We'll see if there's any carry-over to tomorrow's week-ending session. Today's late tape was bolstered by tape-painting and/or short covering, which lifted the indices off their lows.

Dow 15,233.22, -42.47 (0.28%)
NASDAQ 3,465.24, -6.37 (0.18%)
S&P 500 1,650.47, -8.31 (0.50%)
NYSE Composite 9,489.18, -62.24 (0.65%)
NASDAQ Volume 1,924,503,750.00
NYSE Volume 3,771,709,500
Combined NYSE & NASDAQ Advance - Decline: 2633-3851
Combined NYSE & NASDAQ New highs - New lows: 607-62
WTI crude oil: 95.16, +0.86
Gold: 1,386.90, -9.30
Silver: 22.66, +0.001

Wednesday, May 15, 2013

Stocks Rocket Higher as Government Begins Falling Apart; Warp Speed, Bennie!

OK, here are some facts and figures.

The White House is embroiled in three separate scandals (Benghazi, IRS, AP wiretaps), any one of which could be cause for impeachment (which is the preferred action, right now).

Attorney General Eric (Worthless) Holder testified and was grilled by congressmen before the House Judiciary Committee on a variety of issues, not the least of which were questions surrounding the wiretapping of AP reporters and editors. Holder, a typical administration slime-ball, who has prosecuted exactly zero criminal bankers, has recused himself from the AP investigation. How convenient!

The PPI for April was a massive misfire, signaling deflation in the face of the Fed's relentless, non-stop money printing. Expectations were for a reading of -0.5, which in itself would be anti-inflationary enough - and in direct opposition to the wishes of the Fed - but the number came in at a depressing -0.7.

Empire State Manufacturing was supposed to improve from a depression-era-level of 3.1 in April to 3.5 in May, but, surprise, manufacturing contracted in the New York region, dropping to -1.4.

April Industrial Production was off 0.5% and Capacity Utilization fell from 78.3 to 77.8%.

That's three scandals, each with its very own investigation about to be launched and four misses on economic data out of four. It's like a baseball hitter on steroids striking out four times and making three errors in the field. Not very impressive.

So, how do equity markets continue to march higher?

If anyone has answers please call 1-800-LUV-FRAUD, 1-866-2-WEIRD or 1-877-I-RIGGED.

A computer algorithm will answer your call and assimilate your responses, after which they will be discarded.

Thank you.

Dow 15,275.69, +60.44 (0.40%)
Nasdaq 3,471.62, +9.01 (0.26%)
S&P 500 1,658.78, +8.44 (0.51%)
NYSE Composite 9,551.32, +35.47(0.37%)
NYSE Volume 3,946,509,500
Nasdaq Volume 1,786,600,250
Combined NYSE & NASDAQ Advance - Decline: 3592-2883
Combined NYSE & NASDAQ New highs - New lows: 806-41 (!!!!!!)
WTI crude oil: 94.30, +0.09
Gold: 1,396.20, -28.30
Silver: 22.66, -0.721

Tuesday, May 14, 2013

David Tepper Appears, Stocks Fly Higher

So much for yesterday's "slow as she goes" commentary.

This morning, CNBC welcomed hedge fund manager, David Tepper, to the Squawk Box show, and the founder and manager of Appaloosa Management - with $17 billion in funds under management - did as instructed, calling everything under the sun "bullish" and giving the rest of the investment community the "all clear" sign, as he did about a year ago in much the same manner.

This is how the fraud of Wall Street works and continues to work. Trot out the most recognizable bull onto the most-acceptable financial TV show, let him goose the futures, wave his arms around and signal another 800-point rally on the Dow. That's about what happened the last time he appeared on the CNBC pre-market show, so there's no reason to believe that the plan was not afoot once again.

On the subject of whether or not now is an optimum time to invest, consider that the Dow and S&P are at all-time highs and the NASDAQ continues to set 12 1/2-year records. So, unless you think the time-worn advice of "buy low, sell high" should be turned completely on its head, right now could not be a worse time to initiate positions.

However, if one has had enough of sitting on the sidelines watching the major averages gain 120-140% over the past four-to-five years, by all means, jump in. The water's fine. Just don't be like the proverbial frog and fail to notice when it begins to boil. Otherwise, you might just "croak" on your own stock picks.

Dow 15,215.25, +123.57 (0.82%)
NASDAQ 3,462.61, +23.82 (0.69%)
S&P 500 1,650.34, +16.57 (1.01%)
NYSE Composite 9,515.86, +78.68 (0.83%)
NASDAQ Volume 1,771,770,375
NYSE Volume 3,716,203,250
Combined NYSE & NASDAQ Advance - Decline: 4362-2166
Combined NYSE & NASDAQ New highs - New lows: 749-28 (the new normal!)
WTI crude oil: 94.21, -0.96
Gold: 1,424.50, -9.80
Silver: 23.38, -0.317

Monday, May 13, 2013

Slowly Goes Wall Street (Remember, It's May)

Equity markets were rather dull today, on exceptionally low volume - which is saying a lot, since volume left the building years ago.

Dull, boring, inconsequential, however, is how financial markets are supposed to be, or, that is at least how they used to be before the advent of personal computers, CNBC and individually-managed accounts. Today's go-go markets are driven by extra doses of liquidity, courtesy of the Fed (as much as readers hate reading that over and over and over again, the author hates having to mention it even more), HFTs, flash crashes, breaking news (why doesn't somebody fix it?), surprises, tweets, scandals, ponzi schemes, dotcoms, options, derivatives, swaps, repos and hot money flowing from carry trades into equities and back out again.

One can only wonder how many times the same money is re-invested, re-invented, re-created, re-hypothecated, recycled, rinsed and repeated. It seems sometimes that one need only a brokerage account and a pair of fast hands to tip-type your way into the wondrous world of high finance. If only such were true, we'd all be traders and multi-millionaires just like the guys on the infomercials telling you that NOW is the time to FLIP THAT HOUSE!

Alas, investing is boring and unexciting, and well it should be, though Americans, driven by media, need the big splash, the dazzle of bright lights and the promise of easy money to be enticed. Sadly for the marketeers and their media whores, more Americans play the ponies, gamble at casinos or play the lottery than invest in stocks, bonds or commodities. We've been programmed to be risk-takers and the stock market - try as it might - just seems to many to be a rigged game for rich guys in suits and ties and fancy women in shiny, tight-fitting business suits.

Thus, we have these dull markets, in which the major brokerages make war with each other via the computer algos, following each other into what eventually becomes a black hole, a void, a nonsensical, immaterial, valueless dump. That's what our stock markets have devolved into, especially after the crash of 2008-09. The major indices may have come all the way back in the four-to-five years since then, but all that money has been sucked out of the market by the brokerages and hedge funds via bonuses. It's common knowledge that the average investor usually gets screwed unless he/she is either very careful or very smart. There's just no way to win a rigged game. As the old adage goes, "if you're playing a game of poker and you don't know who the mark is, chances are it's probably you."

The general American public is simply not that stupid. After being burned by the high-tech Wall Street crooks in 2000, 2001 and again in 2008, they have not returned. Some maybe, but they're a small minority, mostly younger folks who don't know better or older people with money to burn, potentially. Paper losses still sting, and, if there's another severe downturn in the markets any time soon - an event long, long overdue, according to fundamentals - they'll be gone for good as well.

With all the scams, crimes and untold misdeeds that have become all-too-common on Wall Street - without, incidentally, any criminal prosecutions - is there any wonder that average people with money are still shy about investing in stocks? In a perverse way, thats why this market must and will likely continue to defy gravity and levitate to higher and higher levels: because another crash would destroy what little bit of confidence is left in the ultimate confidence game.

So, now that the banks are all sufficiently recapitalized (supposedly) and everything in America is just hunky-dorey, Wall Street may be looking itself in the mirror and wondering if they've taken too many scalps over the past few years. Maybe they'll keep the liquidity-driven, non-fundamental, irrational exuberance going for a while longer, but slowly, much more slowly.

Or is it time to turn it over again? Wash, rinse, repeat...

Dow 15,091.68, -26.81 (0.18%)
NASDAQ 3,438.79, +2.21 (0.06%)
S&P 500 1,633.77, +0.07 (0.00%)
NYSE Composite 9,437.17, -5.59 (0.06%)
NASDAQ Volume 1,605,809,375
NYSE Volume 3,124,652,250
Combined NYSE & NASDAQ Advance - Decline: 2673-3792
Combined NYSE & NASDAQ New highs - New lows: 475-30
WTI crude oil: 95.17, -0.87
Gold: 1,434.30, -2.30
Silver: 23.70, +0.038

Friday, May 10, 2013

Politicians Lie. No, Really, They Do. (and so do bankers)

Mark this day down as number 14 of the last 16 in which the stock market (major indices) registered gains.

As such, limited commentary. In fact, one word: Benghazi.

Below: "Get Happy" composed by Harold Arlen, with lyrics written by Ted Koehler. It was the first song they wrote together, and was introduced by Ruth Etting in The Nine-Fifteen Revue in 1930. Judy Garland performs the depression era hit in the film, Summer Stock (1950).

Dow 15,118.49, +35.87 (0.24%)
NASDAQ 3,436.58, +27.41 (0.80%)
S&P 500 1,633.70, +7.03 (0.43%)
NYSE Composite 9,442.76, +33.53 (0.36%)
NASDAQ Volume 1,661,819,250
NYSE Volume 3,310,894,750
Combined NYSE & NASDAQ Advance - Decline: 3993-2411
Combined NYSE & NASDAQ New highs - New lows: 544-37
WTI crude oil: 96.04, -0.35
Gold: 1,436.60, -32.00
Silver: 23.66, -0.253

Thursday, May 9, 2013

Shockingly, Stocks Lose Ground

Well, that didn't take long.

Yesterday, in a pique of exasperation over levitating equity markets trading on Fed liquidity rather than fundamentals (it's only been this way for four years, as of today), I promised no further commentary until the markets posted a negative session.

And, presto, there it is, though, as down days are measured, this one wasn't much of anything.

The rationale behind not commenting was due to recent market activity, in a framework in which nearly all economic data has been sour or outright bad. Markets have come to ignore reality "on the ground," in favor of a more optimistic mindset. Beginning April 18, the Dow Industrials had posted gains 13 of the past 14 days, prior to today. Ignorance may be blissful, but making money off it seems somehow wrong.

At least the range was a little better than it has been. The Dow was down nearly sixty points at its nadir, and up about 41 at the peak, so the range was about 100 points, top to bottom, not exactly what one might call volatile, being less than one percent, but better than it has been, suggesting that maybe a few people are getting a little skittish about where this is all heading.

That place may be Nirvana to some, but from the looks of things on Main Street, USA, there is scarcely a resemblance to the unbridled euphoria that infects Wall Street every time they ring the opening bell. Traders have been - and likely will be - making money hand over fist on the upside, without having to bother checking fundamentals, scouring stocks for the best picks nor doing intensive research. Simply playing the indices have brought gains of great magnitude, and leveraging... well, it doesn't get much better than that.

Technicians may want to keep an eye on the Dow Transports (^DJT), as they confirmed the new highs yesterday, but took quite a tumble of some 72 points today (1.13%). While the transportation index may be back-loading the gains on the Industrials, it could also be front-running and telegraphing a decline.

But, of course, this is just one day, and we all know that tonight Ben Bernanke will crank up the printing press once again and tomorrow will be all roses, unicorns and skittles.

That may sound sarcastic, because it is.

Printing money with nothing to back it except empty promises always leads to economic catastrophe.

Every time, and this time is no different.

Dow 15,082.62, -22.50 (0.15%)
NASDAQ 3,409.17, -4.10 (0.12%)
S&P 500 1,626.67, -6.02 (0.37%)
NYSE Composite 9,401.05, -62.26 (0.66%)
NASDAQ Volume 1,746,976,625
NYSE Volume 3,482,779,000
Combined NYSE & NASDAQ Advance - Decline: 2358-4009
Combined NYSE & NASDAQ New highs - New lows: 588-34
WTI crude oil: 96.39, -0.23
Gold: 1,468.60, -5.10
Silver: 23.91, -0.016

Wednesday, May 8, 2013

No Comment on Continuing Ramp

No comment until stocks post a losing session. Until then, just the numbers.

Dow 15,105.12, +48.92 (0.32%)
NASDAQ 3,413.27, +16.64 (0.49%)
S&P 500 1,632.69, +6.73 (0.41%)
NYSE Composite 9,463.32, +54.31 (0.58%)
NASDAQ Volume 1,715,862,500.00
NYSE Volume 3,797,192,750
Combined NYSE & NASDAQ Advance - Decline: 4088-2261
Combined NYSE & NASDAQ New highs - New lows: 724-29
WTI crude oil: 96.62, +1.00
Gold: 1,473.70, +24.90
Silver: 23.93, +0.121

Tuesday, May 7, 2013

Stocks. Must. Go. Higher.

More new records.

Happy faces all around.

Dow 15,056.20, +87.31 (0.58%)
NASDAQ 3,396.63, +3.66 (0.11%)
S&P 500 1,625.96, +8.46 (0.52%)
NYSE Composite 9,409.02, +60.12 (0.64%)
NASDAQ Volume 1,674,661,000
NYSE Volume 3,558,739,000
Combined NYSE & NASDAQ Advance - Decline: 4416-2064
Combined NYSE & NASDAQ New highs - New lows: 670-25
WTI crude oil: 95.62, -0.54
Gold: 1,448.80, -19.20
Silver: 23.81, -0.149

Monday, May 6, 2013

Dead Markets for a Dying Economy

The entire range on the Dow Jones Industrials today was a bit over 47 points. For the S&P 500, 5.56 points.

It's a truly sad day when the major indices move less than four-tenths of a percent, top to bottom. It means that the now-soulless, machine-run market has gone nearly bidless as well. In the absence of any kind of data flow, the computers have nothing to do, so this is what we get... pretty much nothing.

So much for follow-on after Friday's euphoric jobs data rally, which was actually nothing more than numbers being pulled from a magician's hat.

This stock market runs on rumor and money printing and nothing more. When the Dow, S&P and the NASDAQ are 60% lower than where they are today, it might present an attractive investing opportunity. For now, it's just a mirage. Nothing about this market - from corporate earnings to government-supplied data - is real.

The fact of the matter is that America is a crippled marketplace, a stumbling, old, broken economy, but nobody is willing to admit it, at least nobody on Wall Street or in Washington.

Today was the three-year anniversary of the "flash crash" which is credited for keeping so many individual investors away from stocks. Perhaps it is a fitting reminder of that day to see no volume and little price movement. Just what the doctor ordered.

So, now you see that the market is all fixed. No big moves up or down in split seconds. Come on in a buy some stocks. They're at all time highs!

What a total farce this has become. Worthy of a Neil Simon work-up.

Dow 14,968.89, -5.07 (0.03%)
NASDAQ 3,392.97, +14.34 (0.42%)
S&P 500 1,617.50, +3.08 (0.19%)
NYSE Composite 9,345.17, +4.70 (0.05%)
NASDAQ Volume 1,452,282,625
NYSE Volume 3,214,814,500
Combined NYSE & NASDAQ Advance - Decline: 3808-2622
Combined NYSE & NASDAQ New highs - New lows: 476-25
WTI crude oil: 96.16, +0.55
Gold: 1,468.00, +3.80
Silver: 23.96, +0.059

Friday, May 3, 2013

Non-Farm Payrolls for April Send Markets Screaming Higher

When the BLS posted the non-farm payroll data for April at 165,000 - well beyond even the most optimistic guesses (average 145,000) - it was just what the Wall Street syndicate needed to push the S&P over 1600 - a new all-time high - and send everyone home for the weekend a winner.

Never mind that the numbers are mostly a fabrication of modeling, birth-death adjustments, include part-time employees and that the average workweek fell by 0.1%, effectively eliminating most of the gain, or that the March figure was 50% off and raised to a new level, it worked wonders for the market, soullessly searching for any kind of news, good, bad or inconsequential.

Whether one believes these numbers are meaningful, truthful or indicative of anything, doesn't really matter. It's simply more fodder for the one-percenters with which to feed their insatiable greed.

Welcome to the new world dis-order. Enjoy the Kentucky Derby and the weekend. At least we believe the horse races to be honest gambling venues.

Dow 14,973.96, +142.38 (0.96%)
NASDAQ 3,378.63, +38.01 (1.14%)
S&P 500 1,614.42, +16.83 (1.05%)
NYSE Composite 9,340.37, +93.64 (1.01%)
NASDAQ Volume 1,671,711,875
NYSE Volume 3,914,186,250
Combined NYSE & NASDAQ Advance - Decline: 4734-1747
Combined NYSE & NASDAQ New highs - New lows: 758-33 (beyond extreme: ridiculous)
WTI crude oil: 95.61, +1.62
Gold: 1,464.20, -3.40
Silver: 24.01, +0.184

Thursday, May 2, 2013

Markets Say 'Never Mind' about Wednesday's Declines

In a real-life parody of Gilda Radner's Saturday Night Live character, Emily Litella, stocks, commodities, everything simply took no heed of Wednesday's steep declines and said, "ever mind," as though they had been mistaken about the direction of the economy, the advisement from the Fed's FOMC, or something, and thus, virtually erased all of the bad from the day before.

Not to say that these markets are fickle, but there happens to be a very good explanation why all risk assets were hammered lower the previous session: no TOMO.

TOMO stands for Temporary Open Market Operations (as opposed to POMO, which are Permanent operations), the facility by which the Fed creates new money and promptly hands it over to the primary dealers, and, supposedly, other good friends of Uncle Ben Bernanke - he of the big heart - and the money is put to work goosing the prices of everything that isn't glued down, that being mostly stocks, but also, commodities.

In order to keep up with the game, the Fed has published a list of dates and amounts for the purchase of Treasuries, here. In may the Fed will purchase $44 billion worth of treasuries because they bought a billion too many last month ($46 billion) There is a separate list elsewhere on their site for Agency-backed securities purchases which amount to roughly $40 billion per month.

So, save those dates! Those are not days to go short the market, but they are certainly the ones you'll want to be long stocks, because the Fed is supplying the capital.

Sometimes, the reality is so stupid and obvious one has to just wonder how the whole system hasn't blown up already.

Dow 14,831.58, +130.63 (0.89%)
NASDAQ 3,340.62, +41.49 (1.26%)
S&P 500 1,597.59, +14.89 (0.94%)
NYSE Composite 9,246.72, +70.93 (0.77%)
NASDAQ Volume 1,715,556,375
NYSE Volume 3,686,534,250
Combined NYSE & NASDAQ Advance - Decline: 4856-1594
Combined NYSE & NASDAQ New highs - New lows: 395-46
WTI crude oil: 93.99, +2.96
Gold: 1,467.60, +21.40
Silver: 23.83, +0.487

Wednesday, May 1, 2013

'Sell in May' the Mantra for Almost All Asset Classes

The first day of may held true to the tried and true market adage, "sell in May and stay away," as all asset classes declined, though commodity prices were hardest hit and forex barely budged.

Stocks took it on the chin from traders who continue to see horror in economic data, today's fright fest courtesy of the ADP Employment Index, construction spending and the ISM Index.

ADP said the economy missed its target of 150,000 new jobs by a wide amount, coming in at 119,000 for April and revised March lower as well. Construction spending shrank by 1.7% on expectations of a 0.4% increase, and the ISM reading, though nearly in line with expectations, registered a relatively weak 50.7, just barely above the 50 mark which signals growth above the number or decline below it.

It was likely the ADP figure that sent stocks careening at the open, but it wasn't until after the FOMC announcement at 2:00 pm EDT that stocks really began to slump deeply, finishing near the lows of the day after the Fed said they would keeps rates as they were, to the surprise of absolutely nobody. Daily volume was moderate.

The Vix spiked above 14.50, a signal that risk was being sold off, though still mired in a low range. Gold, silver and oil all surpassed the losses in stocks, with crude take=ing the biggest dive. WTI and Brent continue to converge; the expectation is that they will align at some point so that there is a global price for oil. Currently, futures are less than $10 apart, with Brent the higher of the two, falling below $100 per barrel as Europe's recession/depression begins to reach epic proportions.

As for gold and silver, the paper prices posted don't really seem to matter any more, as the price for physical metal has departed company from the spot price in nearly every venue in every country on the planet. People are aware of currency debasement and are seeking ways to preserve what little wealth remains in this era of extreme punishment for savers.

Treasuries have fallen below the recent plateau levels and continue to point up weakness in the economy and the need for some to flee to safe havens. As inflation remains subdued - using a Fedspeak term - bond holders are not losing much over time, though durations shorter than five years are yielding almost nothing. The benchmark ten-year was last seen around 1.63% yield.

The first day of the new month brought out the bears, though it remains to be seen whether this is the beginning of a trend or just a one-trick pony. The government's non-farm payroll data, due out Friday prior to the opening, should be the highlight of the week. Anticipation is for 155,000 new jobs created in April, but, after ADP's disappointing numbers this morning, prospects appear dim.

Dow 14,700.95, -138.85 (0.94%)
NASDAQ 3,299.13, -29.66 (0.89%)
S&P 500 1,582.70, -14.87 (0.93%)
NYSE Composite 9,174.76, -102.12 (1.10%)
NASDAQ Volume 1,769,443,125
NYSE Volume 3,697,257,75o
Combined NYSE & NASDAQ Advance - Decline: 1665-4789
Combined NYSE & NASDAQ New highs - New lows: 377-53
WTI crude oil: 91.03, -2.43
Gold: 1,446.20, -25.90
Silver: 23.34, -0.842