Equity traders and other market participants are probably happy this week is over.
Finishing up with the worst volume of the week - a week that witnessed the slowest level of trading activity in ten years - indices finished with a split decision once again.
Eschewing with the normal banter that would accompany a normal trading session, since today's was anything but normal, let's just move on to 2011. Beginning Monday, January 3, this column will feature predictions for 2011, as most of the mainstream predictors have fallen into the Kool-Aid drinking bullish category, we will offer some contrarian views.
Dow 11,577.51, +7.80 (0.07%)
NASDAQ 2,652.87, -10.11 (0.38%)
S&P 500 1,257.64, -0.24 (0.02%)
NYSE Composite 7,964.02, +12.11 (0.15%)
Advancing issues and decliners were almost evenly split, with gainers taking a narrow edge, 3257-3189. There were 86 new highs on the NASDAQ, to just 8 new lows. New highs on the NYSE numbered 104, while only 4 issues touched new lows.
NASDAQ Volume 959,300,187.50
NYSE Volume 2,148,760,500
The short-term shake-out in crude oil futures didn't even make it until the end of the year, with speculation taking the front-end contract up $1.54, to $91.38, something of a portentous final trade leading into the new year.
Gold finished with a nice gain to close out the year, up $17.50 on the continuous contract, to $1421.60, just ten dollars from its all-time high. Silver turned in the best performance of the year, a gain of 45 cents today sending it to $30.91, its highest point since 1980, and good for a gain of 83.7% on the year.
Gold and silver have been recommended so often here that it hardly needs repeating, but all prospects appear ripe for continued flight, away from fiat money and paper securities and directly into commodities and hard assets. Silver's massive run-up in 2010 might only be a precursor for a long, durable rally that will take the second precious metal to unimagined heights in 2011 and beyond.
Silver's rally, having started later than that of gold, may have more juice for steadfast holders and even new buyers. It is shaping up to be the century of silver. With sovereign fiat paper money stressed around the globe, even small, casual investors are making their way into the precious ore that seems ready for another monster run in coming months.
Farewell, 2010. Happy New Year!
Friday, December 31, 2010
Thursday, December 30, 2010
Data Ignored as Stocks Take a Rare Step Back
Another exceedingly dull session marked the penultimate trading day of the year, but, unlike the tree previous days, all indices finished in the red, showing marginal losses.
Initial unemployment claims came in at a seasonally-adjusted rate of 388,000, beating expectations (418,000), but the data set is marred by the non-seasonally-adjusted number, which came in at a whopping 521,834. Obviously, the BLS is doing a bang-up job at keeping the truth about the employment condition in America almost out of view.
Elsewhere, Chicago PMI surged To 68.6 on expectations Of 62.5, the highest since July 1988, another badly skewed statistic from the government's statistical fantasy factory.
If one were to believe these two reports (are you getting the idea that we don't?), the take-away would be that very few people were laid off following the holiday shopping season and our manufacturing base is vibrant and growing. The truth of the situation is that jobs are being shed as quickly as number-crunchers can adjust their bottom lines on excessively hyped same-store sales figures and the PMI is being fueled largely by cost inflation.
So, with one more dreary day ahead in the lowest volume week in ten years, traders, pundits, analysts and economists can hardly wait to put 2010, the year of the little lie, finally to rest. Without a doubt, 2011 will be better known as the year of the bigger lie.
Dow 11,569.71, -15.67 (0.14%)
NASDAQ 2,662.98, -3.95 (0.15%)
S&P 500 1,257.88, -1.90 (0.15%)
NYSE Composite 7,951.91, -9.57 (0.12%)
Declining issues edge advancers, 3282-3152, while NASDAQ cheered 152 new highs and jeered 17 new lows. The pattern was the same for the NYSE, with 149 new highs and just 8 new lows.
NASDAQ Volume 1,036,465,812.50
NYSE Volume 2,292,664,000
Crude oil finally took off some of the froth, dipping $1.28, to finish just below the $90 mark, at $89.84. Gold eased $7.60, to $1404.40, while silver also slowed, down 13 cents, to $30.47.
Initial unemployment claims came in at a seasonally-adjusted rate of 388,000, beating expectations (418,000), but the data set is marred by the non-seasonally-adjusted number, which came in at a whopping 521,834. Obviously, the BLS is doing a bang-up job at keeping the truth about the employment condition in America almost out of view.
Elsewhere, Chicago PMI surged To 68.6 on expectations Of 62.5, the highest since July 1988, another badly skewed statistic from the government's statistical fantasy factory.
If one were to believe these two reports (are you getting the idea that we don't?), the take-away would be that very few people were laid off following the holiday shopping season and our manufacturing base is vibrant and growing. The truth of the situation is that jobs are being shed as quickly as number-crunchers can adjust their bottom lines on excessively hyped same-store sales figures and the PMI is being fueled largely by cost inflation.
So, with one more dreary day ahead in the lowest volume week in ten years, traders, pundits, analysts and economists can hardly wait to put 2010, the year of the little lie, finally to rest. Without a doubt, 2011 will be better known as the year of the bigger lie.
Dow 11,569.71, -15.67 (0.14%)
NASDAQ 2,662.98, -3.95 (0.15%)
S&P 500 1,257.88, -1.90 (0.15%)
NYSE Composite 7,951.91, -9.57 (0.12%)
Declining issues edge advancers, 3282-3152, while NASDAQ cheered 152 new highs and jeered 17 new lows. The pattern was the same for the NYSE, with 149 new highs and just 8 new lows.
NASDAQ Volume 1,036,465,812.50
NYSE Volume 2,292,664,000
Crude oil finally took off some of the froth, dipping $1.28, to finish just below the $90 mark, at $89.84. Gold eased $7.60, to $1404.40, while silver also slowed, down 13 cents, to $30.47.
Wednesday, December 29, 2010
How High is Up? Stocks Continue Relentless Rise
It's absolutely amazing to anyone who's followed the markets for the past twenty years or more, how this current rally, based entirely on free money flowing from the Federal Reserve to the Primary Dealers, continues to defy the gravitational pull of low volume.
Just like the first two days of the week, Wednesday was full of nothing but hot air and the pretentious attitude that the US and the rest of the planet are in some kind of economic recovery and not being lifted by fumes, happy talk and a lack of market participants. This week should stand the test of time as the lowest volume week of at least the past 10 years.
Those few remaining players - the Primary Dealers, select hedge funds and some high-wealth individuals - managed to wring out even more gains as the Fed delivered the final POMO of the year, a mere $5.4 billion, though an amount adequate enough to lift this listless market significantly.
Dow 11,585.38, +9.84 (0.09%)
NASDAQ 2,666.93, +4.05 (0.15%)
S&P 500 1,259.78, +1.27 (0.10%)
NYSE Composite 7,961.48, +29.81 (0.38%)
Advancing issues swamped decliners, 3991-2544. NASDAQ new highs were at 120, with 15 stocks hitting new lows. On the NYSE, there were 189 new highs and just 16 new lows.
NASDAQ Volume 1,079,771,000
NYSE Volume 2,318,948,250
Commodities continued their path higher as well, as gold added another $4.70, to $1410.90 at this time, and silver gained 29 cents, eclipsing its previous 30-year high (Dec. 7, $30.50), now trading for $30.58 per ounce.
Crude oil for February delivery, the front-end contract on the NYMEX, took a 37-cent haircut, but is still dangerously high, at $91.12 per barrel.
We'll get unemployment claims before the opening bell on Thursday and no other data on Friday, the final trading day (and final day, period) of 2010, putting to rest a very painfully-slow post-holiday series of sessions.
One final note for the day. There's a duopoly that is just begging to be resolved. Short interest is at record lows while margin debt is at its highest level since the collapse of Lehman Bros. in 2008. Those two data sets cannot exist side-by-side for long without something breaking out somewhere.
Just like the first two days of the week, Wednesday was full of nothing but hot air and the pretentious attitude that the US and the rest of the planet are in some kind of economic recovery and not being lifted by fumes, happy talk and a lack of market participants. This week should stand the test of time as the lowest volume week of at least the past 10 years.
Those few remaining players - the Primary Dealers, select hedge funds and some high-wealth individuals - managed to wring out even more gains as the Fed delivered the final POMO of the year, a mere $5.4 billion, though an amount adequate enough to lift this listless market significantly.
Dow 11,585.38, +9.84 (0.09%)
NASDAQ 2,666.93, +4.05 (0.15%)
S&P 500 1,259.78, +1.27 (0.10%)
NYSE Composite 7,961.48, +29.81 (0.38%)
Advancing issues swamped decliners, 3991-2544. NASDAQ new highs were at 120, with 15 stocks hitting new lows. On the NYSE, there were 189 new highs and just 16 new lows.
NASDAQ Volume 1,079,771,000
NYSE Volume 2,318,948,250
Commodities continued their path higher as well, as gold added another $4.70, to $1410.90 at this time, and silver gained 29 cents, eclipsing its previous 30-year high (Dec. 7, $30.50), now trading for $30.58 per ounce.
Crude oil for February delivery, the front-end contract on the NYMEX, took a 37-cent haircut, but is still dangerously high, at $91.12 per barrel.
We'll get unemployment claims before the opening bell on Thursday and no other data on Friday, the final trading day (and final day, period) of 2010, putting to rest a very painfully-slow post-holiday series of sessions.
One final note for the day. There's a duopoly that is just begging to be resolved. Short interest is at record lows while margin debt is at its highest level since the collapse of Lehman Bros. in 2008. Those two data sets cannot exist side-by-side for long without something breaking out somewhere.
Tuesday, December 28, 2010
With Stocks Stuck in Near-Neutral, Precious Metals Break Out
It's been a while since there was any excitement in the precious metals space - about a three weeks to be exact, when silver popped to a multi-year high at $30.50 and gold marked an all-time record high of $1420.00 on the London Fix. Both of those numbers were made on December 7th, and since then both have seen pull-backs in price, though nothing any serious gold bugs were losing sleep over.
Since then, talk of a gold bubble have been bandied about by the numbskull financial press, the case against JP Morgan and HSBC manipulating the silver market has expanded and stocks have done what they usually do in December, appreciate, though on close to record-low volume across the board.
With Christmas season over and stock pickers jubilant over what's being called the best holiday shopping season since 2007 (not that big a deal, since 2008 and 2009 were, by most accounts, stinkers) there may be a little bit of sanity re-emerging into the markets. Bond auctions in the EU and here in the USA have not fared particularly well, and a failed short-term government bond auction and a 25 basis point hike in China have put the fear of inflation squarely back on the table as holiday cheer and the cheering over retail stocks fades into the background.
Gold rocketed higher, up $21.30 on last check, to $1405.40, which, if it holds above $1403.50 until 5:00 ET, would be the third-highest closing price ever on the NYMEX, all recorded this month. Silver will finish with its second-highest close since the attempted cornering of the market by the infamous Hunt Brothers back in 1979-80 when it topped out at $54/ounce. Today's price is up $1.00, at $30.28, only the second time silver has closed over $30 per ounce in 30 years.
There's currently so much doubt and fear involved with trading stocks and bonds that investors, gamblers and speculators of all kind and size are bidding up the price of both gold and silver, which have traditionally performed best in times of uncertainty. To believe that sovereign economies are solvent and secure would be tantamount to believing that some mythical fat man in a red suit delivered all those nifty iPads and colorful sweaters a few days ago.
Nations are on the brink of economic collapse, and not just Greece and Spain, but larger ones such as the United States, France and Great Britain. Decades of mismanagement of government budgets have stretched the credibility of central banks and politicians to the point that smart money is moving away from the paper chase of currency and securities and back to the old standards of real money - gold and silver.
Today's moves in the precious metals may have been caused by some expiring options positions, though the past three weeks have witnessed more consolidation in the metals market than outright selling. The pullback from the December 7 highs has been brief and not particularly deep, with the move covering all of 5% in the gold price and roughly 7% in silver.
If anything is certain heading into the new year, it's that the global recovery or crisis (tke your pick) still has more to play out, and the main beneficiaries of uncertainty will be the precious metals, heading into the 10th year of an historic bull run.
Stocks and bonds will come and go, rise and fall as they always do, but the permanence of gold and silver appear to be headed for a bright and glorious future.
The day's action in the equities space was as usual: little movement, split indices and extremely thin volume. If not for the HFT computers pushing electrons around, US exchanges might as well have been closed the first two days of this week and probably won't look any better after the next three.
Dow 11,575.54, +20.51 (0.18%)
NASDAQ 2,662.88, -4.39 (0.16%)
S&P 500 1,258.51, +0.97 (0.08%)
NYSE Composite 7,931.67, +10.73 (0.14%)
Losing issues outpaced advancers for the session, 3505-2977, and there were more new highs than lows across both exchanges: 135-12 on the NASDAQ and 130-14 on the NYSE, a kind of reverse-Hindenburg indication. The volume figures should be starkly defeatist to any bulls.
NASDAQ Volume 1,144,227,750.00
NYSE Volume 2,461,884,250
A couple of key economic indicators shed some light on the US economy, which remains mired in the quicksand of bogus bailouts, high unemployment and moribund housing prices. The Case-Shiller 20-city index declined for the 4th consecutive month, making a residential housing double dip a fait accompli. Consumer confidence, as measured by the Conference Board, tumbled from 54.3 in November to 52.5 this month, a clear sign that, despite the howls of excitement over prospects for 2011 from the likes of Jim Cramer and Larry Kudlow, along with a roster of economic forecasters (charlatans) too numerous to mention, economic conditions in America continue to be just a hair's breadth from desperation.
Those wise enough to be already entrenched in niche markets, rarities, precious metals and arable acreage are sitting comfortably in the proverbial cat-bird's seat.
Since then, talk of a gold bubble have been bandied about by the numbskull financial press, the case against JP Morgan and HSBC manipulating the silver market has expanded and stocks have done what they usually do in December, appreciate, though on close to record-low volume across the board.
With Christmas season over and stock pickers jubilant over what's being called the best holiday shopping season since 2007 (not that big a deal, since 2008 and 2009 were, by most accounts, stinkers) there may be a little bit of sanity re-emerging into the markets. Bond auctions in the EU and here in the USA have not fared particularly well, and a failed short-term government bond auction and a 25 basis point hike in China have put the fear of inflation squarely back on the table as holiday cheer and the cheering over retail stocks fades into the background.
Gold rocketed higher, up $21.30 on last check, to $1405.40, which, if it holds above $1403.50 until 5:00 ET, would be the third-highest closing price ever on the NYMEX, all recorded this month. Silver will finish with its second-highest close since the attempted cornering of the market by the infamous Hunt Brothers back in 1979-80 when it topped out at $54/ounce. Today's price is up $1.00, at $30.28, only the second time silver has closed over $30 per ounce in 30 years.
There's currently so much doubt and fear involved with trading stocks and bonds that investors, gamblers and speculators of all kind and size are bidding up the price of both gold and silver, which have traditionally performed best in times of uncertainty. To believe that sovereign economies are solvent and secure would be tantamount to believing that some mythical fat man in a red suit delivered all those nifty iPads and colorful sweaters a few days ago.
Nations are on the brink of economic collapse, and not just Greece and Spain, but larger ones such as the United States, France and Great Britain. Decades of mismanagement of government budgets have stretched the credibility of central banks and politicians to the point that smart money is moving away from the paper chase of currency and securities and back to the old standards of real money - gold and silver.
Today's moves in the precious metals may have been caused by some expiring options positions, though the past three weeks have witnessed more consolidation in the metals market than outright selling. The pullback from the December 7 highs has been brief and not particularly deep, with the move covering all of 5% in the gold price and roughly 7% in silver.
If anything is certain heading into the new year, it's that the global recovery or crisis (tke your pick) still has more to play out, and the main beneficiaries of uncertainty will be the precious metals, heading into the 10th year of an historic bull run.
Stocks and bonds will come and go, rise and fall as they always do, but the permanence of gold and silver appear to be headed for a bright and glorious future.
The day's action in the equities space was as usual: little movement, split indices and extremely thin volume. If not for the HFT computers pushing electrons around, US exchanges might as well have been closed the first two days of this week and probably won't look any better after the next three.
Dow 11,575.54, +20.51 (0.18%)
NASDAQ 2,662.88, -4.39 (0.16%)
S&P 500 1,258.51, +0.97 (0.08%)
NYSE Composite 7,931.67, +10.73 (0.14%)
Losing issues outpaced advancers for the session, 3505-2977, and there were more new highs than lows across both exchanges: 135-12 on the NASDAQ and 130-14 on the NYSE, a kind of reverse-Hindenburg indication. The volume figures should be starkly defeatist to any bulls.
NASDAQ Volume 1,144,227,750.00
NYSE Volume 2,461,884,250
A couple of key economic indicators shed some light on the US economy, which remains mired in the quicksand of bogus bailouts, high unemployment and moribund housing prices. The Case-Shiller 20-city index declined for the 4th consecutive month, making a residential housing double dip a fait accompli. Consumer confidence, as measured by the Conference Board, tumbled from 54.3 in November to 52.5 this month, a clear sign that, despite the howls of excitement over prospects for 2011 from the likes of Jim Cramer and Larry Kudlow, along with a roster of economic forecasters (charlatans) too numerous to mention, economic conditions in America continue to be just a hair's breadth from desperation.
Those wise enough to be already entrenched in niche markets, rarities, precious metals and arable acreage are sitting comfortably in the proverbial cat-bird's seat.
Monday, December 27, 2010
Slogging Along Toward a 2011 Disaster
Just for kicks, here's the opening line to this post without benefit of having seen as much as a stock quote all day:
Stocks flat on low volume.
Let's see how we stack up:
Dow 11,555.03, -18.46 (0.16%)
NASDAQ 2,667.27, +1.67 (0.06%)
S&P 500 1,257.54, +0.77 (0.06%)
NYSE Composite 7,920.94, -4.42 (0.06%)
NASDAQ Volume 1,067,840,625
NYSE Volume 2,203,177,750
Well, prescient, no?
Amazingly, advancing issues swamped decliners, 3637-2817. On the NASDAQ, there were 147 new highs; 13 new lows. On the NYSE, there were 106 new highs, to just 13 new lows. Trading was exceedingly thin, the lowest volume of the year, due to a fierce snowstorm which kept many traders from reaching the floor of the NYSE and the time of year, which always has a negative effect on volume.
Crude oil dipped to $91.00, down 51 cents on the day. Gold bounced around, finally going down 20 cents, to $1384.20 as of this writing. Silver is currently up 7 cents, to $29.29.
There's really no good reason to bother with these thinly-traded equity markets. For much less risk one should be investing in precious metals or one's own business, where the rate of return should easily outperform stocks and/or bonds in good times and especially in bad ones. If one is a good business manager, there is boundless opportunity. Just spare the overhead, keep employees (if you even dare to hire one) to a minimum, work diligently and watch the bottom line.
Any business, unless one is in the wrong line of work or a completely illiquid market, should thrive without much interference from government. That seems to be the major trick - keeping the regulatory agencies and taxing authorities off your doorstep.
America was built on entrepreneurship, vision and perseverance, the last of which is probably the most important. Most businesses fail from lack of persistence in the face of what usually appears as various impediments to survival. In these sad days of the new century, Americans are beginning to suffer from lacks of education, nerve and business acumen. There may be no better time to bootstrap an organization from the ground up, as the politicians are too busy trying to save their jobs and the banking conglomerate is desperate.
With a little pluck and not much capital, Americans may find unique ways to free themselves from wage slavery, the scourge of the nation. All it takes is an idea, some grit, some spit and some attitude. Every household in America should double as home base for a business. It doesn't matter if the business thrives or loses money in the beginning, because the enormous tax benefits of hoe-based businesses will free up more of YOUR money, which the government takes up front in the form of payroll taxes.
Those still treading on the payroll train to nowhere would do well to file a DBA (Doing Business As) with their local county clerk and begin receiving the vast benefits proffered by the US tax code. There are no more home-business-friendly rules in the world.
Just as a hint - and I'm not going to give anyone the entire scope of why having a home-based business is a MUST in these times - start with the deduction from income on the costs of one room (the room which you dedicate to your business). If you live in a two-bedroom apartment with a kitchen, a bath, living and dining room, paying $500/month, making one of those two bedrooms an office - even if you make ZERO net income from your business - allows you to deduct 1/5 of your rent, or $1200 per year, from your gross income. Just this alone, if you're in a 28% tax bracket, will save you $336 in taxes, and that's just for starters.
Imagine if you actually made money from your business. Someday, you might find yourself not worrying about taxes at all, except to shield them from the government like big businesses do, and there are ways.
Wake up and grow up, Americans. The resources are there, the money is out there, what's lacking is the will.
Stocks flat on low volume.
Let's see how we stack up:
Dow 11,555.03, -18.46 (0.16%)
NASDAQ 2,667.27, +1.67 (0.06%)
S&P 500 1,257.54, +0.77 (0.06%)
NYSE Composite 7,920.94, -4.42 (0.06%)
NASDAQ Volume 1,067,840,625
NYSE Volume 2,203,177,750
Well, prescient, no?
Amazingly, advancing issues swamped decliners, 3637-2817. On the NASDAQ, there were 147 new highs; 13 new lows. On the NYSE, there were 106 new highs, to just 13 new lows. Trading was exceedingly thin, the lowest volume of the year, due to a fierce snowstorm which kept many traders from reaching the floor of the NYSE and the time of year, which always has a negative effect on volume.
Crude oil dipped to $91.00, down 51 cents on the day. Gold bounced around, finally going down 20 cents, to $1384.20 as of this writing. Silver is currently up 7 cents, to $29.29.
There's really no good reason to bother with these thinly-traded equity markets. For much less risk one should be investing in precious metals or one's own business, where the rate of return should easily outperform stocks and/or bonds in good times and especially in bad ones. If one is a good business manager, there is boundless opportunity. Just spare the overhead, keep employees (if you even dare to hire one) to a minimum, work diligently and watch the bottom line.
Any business, unless one is in the wrong line of work or a completely illiquid market, should thrive without much interference from government. That seems to be the major trick - keeping the regulatory agencies and taxing authorities off your doorstep.
America was built on entrepreneurship, vision and perseverance, the last of which is probably the most important. Most businesses fail from lack of persistence in the face of what usually appears as various impediments to survival. In these sad days of the new century, Americans are beginning to suffer from lacks of education, nerve and business acumen. There may be no better time to bootstrap an organization from the ground up, as the politicians are too busy trying to save their jobs and the banking conglomerate is desperate.
With a little pluck and not much capital, Americans may find unique ways to free themselves from wage slavery, the scourge of the nation. All it takes is an idea, some grit, some spit and some attitude. Every household in America should double as home base for a business. It doesn't matter if the business thrives or loses money in the beginning, because the enormous tax benefits of hoe-based businesses will free up more of YOUR money, which the government takes up front in the form of payroll taxes.
Those still treading on the payroll train to nowhere would do well to file a DBA (Doing Business As) with their local county clerk and begin receiving the vast benefits proffered by the US tax code. There are no more home-business-friendly rules in the world.
Just as a hint - and I'm not going to give anyone the entire scope of why having a home-based business is a MUST in these times - start with the deduction from income on the costs of one room (the room which you dedicate to your business). If you live in a two-bedroom apartment with a kitchen, a bath, living and dining room, paying $500/month, making one of those two bedrooms an office - even if you make ZERO net income from your business - allows you to deduct 1/5 of your rent, or $1200 per year, from your gross income. Just this alone, if you're in a 28% tax bracket, will save you $336 in taxes, and that's just for starters.
Imagine if you actually made money from your business. Someday, you might find yourself not worrying about taxes at all, except to shield them from the government like big businesses do, and there are ways.
Wake up and grow up, Americans. The resources are there, the money is out there, what's lacking is the will.
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