Tuesday, December 31, 2013

Year-end Thoughts of Inequality and Fear

2013 was quite a year for stock investors, the best, in fact, since 1997.

As the annum comes to an end, and since the mainstream and financial media simply cannot or will not provide useful information, a couple of random comments from a favorite, anonymous author:

"This is beyond depressing. Just what is it that the international banking cartel wants?

They already have the global reserve currency, central banksters in all but a few sovereign states, 90% of the world's most valuable art and sculpture, all the best yatchs, coastal land, and anything else that signifies wealth.

Ah, but they won't be satisfied until they have every nation on the planet so deeply in debt that they can never escape, all of it in completely fabricated, made-up-out-of-thin-air fiat money.

Fake money, produced by creating debt to bankers, is valuable, but real money, gold and silver, is supposed to be near-worthless. This is not reality; it is pure fantasy, conjured by central bankers and sold by the mindless trolls of Wall Street and the media. All that's left is farmland, and that's becoming scarce, and they will eventually come for that, or, drive its price so high none but the connected or extremely well-heeled can afford it.

A few years ago, I thought that a condition such as we have today (insolvent banks financing companies to all-time stock market highs while the real economy contracts - and forget the "official" data - the global economy has grwon over the past six years only in terms of inflation) would have fomented a revolution. However, I have become resigned to the idea that Americans have lost their spine, are completely disorganized and suffer greatly from the pervasive normalcy bias (thank you, CogDis) created by the bankers and politicians.

Nobody wants the party to end, and it certainly will not, unless the bankers want it to, and, at the time of their choosing, and not a momet before, they will surely end it, impoverishing even more of the population of the world.

We are ruled by the most pernicious, evil, conniving group of men and women to ever walk the planet... and, we like it.

So sad."

"Yesterday, I picked up a can of tuna, thinking I might include it in a macaroni salad later in the day. Looked at the label and saw the word "Pacific" on it. Put it back.

A few days ago, I was buying vegetables and began to wonder where they came from. I live in upstate NY, so all winter vegetables are obviously coming from warmer climates. Bought a few peppers, a red onion and some broccoli, and thought that one day, perhaps soon, people will be asking where the vegetables come from.

Personally, I'm pretty freaked out about Fukushima. It's been nearly three years, and radiation of varying amounts and forms are still spilling out. I am not a nuclear scientist, but I know enough to realize that Fukushima needs to be contained and that the ongoing silence and probable coverup by various governments and the media are a sure warning sign that all is NOT well.

Sure, maybe I'm paranoid, but once February comes, and I move to my land in South Carolina, I'm growing as much as I can, as fast as I can, getting off the grid, eating only non-GMO vegetables and meats from locally-raised animals or fish from local waters. Not that I'm afraid of dying - I'm 60, and I'm not - but I like to think I have maybe 15-30 good years left and surely don't want to die from cancer because I ate food that was contaminated and our beneficent government didn't have the common decency to inform us.

Fuku may or may not be an ELE, but, if it proves to be, I plan on trying like hell to outlive it, and, if I can't, taking a bankster or two along with me on my final ride into Hades.

Happy New Year. Fight back."

DOW 16,576.66, +72.37 (+0.44%)
NASDAQ 4,176.59, +22.39 (+0.54%)
S&P 1,848.36, +7.29 (+0.40%)
10-Yr Note 97.59, -0.45 (-0.46%) Yield: 3.04%
NASDAQ Volume 1.29 Bil
NYSE Volume 2.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 3533-2201
Combined NYSE & NASDAQ New highs - New lows: 458-50
WTI crude oil: 98.42, -0.87
Gold: 1,202.30, -1.50
Silver: 19.37, -0.245
Corn: 422.00, -1.50

Monday, December 30, 2013

Stocks Barely Moved on Low Volume Trading

The last days of the year are usually among the more sluggish in terms of trading volume, and this year is certainly no exception to the rule. The major indices were flat almost all session long, with the Dow ending up slightly positive due to some small buying interest in the latter part of the day.

The commodities complex was taken down another notch, with oil, gold, silver and most of the edible varieties lower.

It is difficult to read much of anything into any market moves at this point of the year, though there seems to be an overriding sense of smug complacency after one of the best years for stocks on record.

With the limited activity these past few days, a January rally out of the gate would surprise nobody, so expect stocks to languish tomorrow, but get a huge boost on the 2nd of January, the first official trading day of 2014.

DOW 16,504.29, +25.88 (+0.16%)
NASDAQ 4,154.20, -2.40 (-0.06%)
S&P 1,841.07, -0.33 (-0.02%)
10-Yr Note 98.09, +0.82 (+0.85%) Yield: 2.97%
NASDAQ Volume 1.27 Bil
NYSE Volume 2.21 Bil
Combined NYSE & NASDAQ Advance - Decline: 2747-1966
Combined NYSE & NASDAQ New highs - New lows: 327-65
WTI crude oil: 99.29, -1.03
Gold: 1,203.80, -10.20
Silver: 19.62, -0.434
Corn: 423.50, -4.00

Friday, December 27, 2013

Just Numbers

DOW 16,478.41, -1.47 (-0.01%)
NASDAQ 4,156.59, -10.59 (-0.25%)
S&P 1,841.40, -0.62 (-0.03%)
10-Yr Note 97.86, +0.57 (+0.58%) Yield: 3.00%
NASDAQ Volume 1.17 Bil
NYSE Volume 2.05 Bil
Combined NYSE & NASDAQ Advance - Decline: 2714-2958
Combined NYSE & NASDAQ New highs - New lows: 455-72
WTI crude oil: 100.32, +0.77
Gold: 1,214.00, +1.70
Silver: 20.05, +0.133
Corn: 427.50, +1.25

Thursday, December 26, 2013

Buying the All-Time Highs: Is This Wise?

Despite dismal volume, investors piled into stocks - at all-time highs - once again.

Whatever the investment gurus have to say, all of this is due to unlimited funds from the Federal Reserve. Yield on the 10-year note reached 3% today, but apparently, that does not matter.

Absolutely crazy.

DOW 16,479.88, +122.33 (+0.75%)
NASDAQ 4,167.18, +11.76 (+0.28%)
S&P 1,842.02, +8.70 (+0.47%)
10-Yr Note 97.92, -0.08 (-0.09%) Yield: 3.00%
NASDAQ Volume 1.11 Bil
NYSE Volume 1.97 Bil
Combined NYSE & NASDAQ Advance - Decline: 2987-2704
Combined NYSE & NASDAQ New highs - New lows: 640-56
WTI crude oil: 99.55, +0.33
Gold: 1,212.30, +9.00
Silver: 19.92, +0.432
Corn: 426.25, -8.25

Wednesday, December 25, 2013

Merry Christmas from Edward Snowden

Presented without commentary. Hero or criminal? You judge.

Tuesday, December 24, 2013

Merry Christmas from Struggling Retail Sector, Darlene Love Baby Please Come Home

Today, somebody suggested a few ways to "run a few big retailers into bankruptcy."

Don't worry, they don't need any help. They are doing a smash-up job of it all by themselves. JCP will be the first to go; I have a choice parking spot already picked out for the "EVERYTHING MUST GO, CLOSING OUR DOORS, ALL SALES FINAL" going out of business sale at JC Pennys at the local mall (I need some new pants). But, just to be safe, don't bet the house on JCP taking down any banks. Goldman Sucks already has the real estate under many JCP stores locked and loaded.

Actually, Blockbuster already started the trend. There's a huge yellow sign on the Blockbuster near me. Can't miss it. Too bad nobody wants DVDs at anything over $2-4. There are some ebay sellers ready to swoop down and purchase all their remaining inventory for actual pennies on the dollar. 2014 will see numerous large bankruptcies, led by retailers, IMO.

Now, when these retailers start dropping like flies, the media will crow that it's because of the success of the internet (Obamacare web site not included). Net result is moar deflation... err, I mean, disinflation.

And Old Yellen will, as quietly as possible, probably by surreptitious means, increase QE to well over $100k per month, maybe buying up something like securitized student loans gone bad (video out soon).

The government will no longer want the shirts off your backs, because the shirts - sewn in Southeast Asian sweatshops by brown and yellow people who do not matter - aren't worth anything.

Usually, I'm not big on making predictions, as they're difficult to get right and most people will maim you more on your errors, rather than praise your correct calls, but I do believe bankruptcies are in order for 2014 in the retail sector, at least, and spreading to other consumer discretionary companies, maybe a couple of REITs or large mall owners (could be one and the same). More layoffs, more welfare, more SNAP, more phony government statistics, more lame excuses, more liberal apologists, and, as usual, the banks will profiteer like never before.

America has this coming, because it has ignored, squandered and/or pillaged the true wealth of the country - its land, its labor, its accumulated wealth and its populace - to save its fraudulent banking and political system.

As for the markets, the annual year-end ramping continued in Tuesday's short session.

In keeping with the spirit of the season, here's a treat from the David Letterman Show: Darlene Love singing, "Christmas, Baby Please Come Home." If this doesn't bring a tear to your eye, well, then you're either the Grinch or another old Scrooge.

Merry Christmas, and may we all survive the coming New Year!

-- Fearless Rick

DOW 16,357.55, +62.94 (+0.39%)
NASDAQ 4,155.42, +6.51 (+0.16%)
S&P 1,833.32, +5.33 (+0.29%)
10-Yr Note 98.03, -0.11 (-0.11%) Yield: 2.98%
NASDAQ Volume 763.66 Mil
NYSE Volume 1.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 3550-2028
Combined NYSE & NASDAQ New highs - New lows: 587-41
WTI crude oil: 99.15, +0.24
Gold: 1,203.60, +6.60
Silver: 19.48, +0.071
Corn: 434.75, +0.50

Monday, December 23, 2013

India's Clumsy, Futile Attempts to Throttle Public Gold Purchases

1 kilogram = 35.2739619 ounces.

Why does this matter?

Because that's the amount of gold an Indian citizen is legally allowed to take into India after at least six months abroad.

In a fascinating story in the aftermath of the India government's harsh restrictions on the importation of gold, a plane from Dubai to the Indian airport at Calicut carried 80 passengers, each of them returning to their homeland with one kilogram of gold.

In dollar terms, the plane was carrying 2572.06 troy ounces of gold, valued at roughly $3,086,472 worth of gold if one uses $1200 per troy ounce as a baseline. The passengers were primarily laborers returning home from construction jobs in the Middle East. Full story, courtesy of the India Times here.

The actions by some of the more nefarious elements in Indian society point up the futility of governments' attempts to control money supplies, balances and trade in the face of independent people. All they ever end up doing is causing imbalances, which naturally favor those in control positions. Sadly, the bulk of the population doesn't see what's being done to their currencies and their freedoms until it is too late.

As it is in India, it is everywhere. Governments, once they have grown beyond their capacity to usefully serve the population, become nothing but a drag and anchor on society.

Thanks to oversize, bulky interference by government entities and their cohorts like central banks, besides the now near-daily ramping to new and newer all-time highs on the various US equity indices, there's not much worth reporting these days.

DOW 16,294.61, +73.47 (+0.45%)
NASDAQ 4,148.90 , +44.16 (+1.08%)
S&P 1,827.99, +9.67 (+0.53%)
10-Yr Note 98.45, +0.20 (+0.21%)
NASDAQ Volume 1.66 Bil
NYSE Volume 2.83 Bil
Combined NYSE & NASDAQ Advance - Decline: 4111-1647
Combined NYSE & NASDAQ New highs - New lows: 669-58
WTI crude oil: 98.91, -0.41
Gold: 1,197.00, -6.70
Silver: 19.41, -0.04
Corn: 434.25, +1.00

Friday, December 20, 2013

Big Week for Stocks Ends on High Volume, 4.1% GDP

If stocks needed a little more of a boost after the Fed's taper-lite effort earlier in the week, the BLS gave it to them early Friday morning, when it announced the final revision to third quarter GDP at a whopping 4.1%, which turned out to be a solid increase over the already rosy 2.8% first estimate and 3.6% second estimate.

Thus, all the indices turned in a solid performance for the week, among the best of the year. The Dow had its third-best week of the year, and it has been a year of outsize gains overall and generally superior performance for equities when compared to all other asset classes.

Maybe the general economy is not exactly where everyone would like it to be, but it appears to be close enough for Wall Street, as trading winds down to just six trading days remaining in 2013.

For the week, the Dow was a moon-shot, gaining 465.78 points for a 2.96% rise; the NASDAQ tacked on 103.77 (2.59%); the S&P added 42.99 points (2.42%).

Record highs at the close on Friday were recorded for the Dow, S&P, Dow Transports and the Russell 2000.

Due to quadruple witching in options and futures, NASDAQ and S&P rebalancing, and a Fed-infused dose of holiday cheer, volume hit its best level of the year.

Bonds were well-behaved, with the benchmark 10-year note finishing at a modest 2.91% yield.

Everything looked so good, even gold and silver caught some bids.

The old song says, "Santa Claus is Coming to Town," though it appears the jolly fat man made Wall Street an early destination.

DOW 16,221.14, +42.06 (+0.26%)
NASDAQ 4,104.74, +46.61 (+1.15%)
S&P 1,818.31, +8.71 (+0.48%)
10-Yr Note 98.65, +0.50 (+0.51%) Yield: 2.91%
NASDAQ Volume 2.93 Bil
NYSE Volume 4.90 Bil
Combined NYSE & NASDAQ Advance - Decline: 4247-1527
Combined NYSE & NASDAQ New highs - New lows: 505-63
WTI crude oil: 99.32, +0.28
Gold: 1,203.70, +10.10
Silver: 19.45, +0.267
Corn: 433.25, +2.75

Thursday, December 19, 2013

Fed Hangover Batters Gold, Silver; Stocks Flat, A-D Negative

After yesterday's glorious proclamation by the all-wise and omnipotent Wizard of the Fed, Ben Bernanke, the euphoria that was yesterday's nearly-300 point rally on the Dow fizzled into nothingness with a downside bias on the advance-decline line, with a 3:2 ratio favoring losing issues.

Gold and silver were beaten mercilessly for not cow-towing to the company line that everything is getting "better," the US economy is in the midst of a brisk recovery and the stimulus just reduced by the Federal Reserve is really there just for window dressing.

The "reality" for money managers and investors is that the precious metals are just not competitively priced in comparison to the absolute bargains in stocks, which, by the way, are at all-time highs, spurred there by massive stock buybacks, easy credit and compulsive labor reductions.

Remember that the actual reduction in the amount of bond purchases by the Fed hasn't even begun; that will happen in January, should economic conditions remain somewhat the same, but there were some cracks in the Fed's armor-plated monetary policy directives even as the market opened on Thursday with a massive rally hangover that lasted the full duration of the session.

Initial unemployment claims came in at an unexpectedly-high 379,000, the highest number since March, and mind you, this is in the middle of the holiday season, where part-time retail jobs and temporary work should be plentiful. It's an ominous development.

Additionally, existing home sales fell for the third straight month, down 4.3 percent last month to an annual rate of 4.90 million units.

Anybody with even a cursory interest in real estate understood that the combination of higher prices (median home prices were higher by 9.4 percent over the same period last year) and higher interest rates create an affordability issue, pricing out marginal buyers and slowing the momentum in housing.

Tighter credit standards also had an effect on the lower volume of real estate sales, as did the number of cash buyers decreasing slightly.

Interest rates were effected negatively, with the 10-year note yield rising to 2.93%.

With news like this, how can the Fed not taper? It's skittles and unicorns as far as the eye can see, which, coincidentally is about to that bridge over yonder, which I just happen to own and would like to sell you for the low, low price of...

DOW 16,179.08, +11.11 (+0.07%)
NASDAQ 4,058.13, -11.93, (-0.29%)
S&P 1,809.60, -1.05 (-0.06%)
10-Yr Note 98.48, +0.23 (+0.23%) Yield: 2.93%
NASDAQ Volume 1.66 Bil
NYSE Volume 3.47 Bil
Combined NYSE & NASDAQ Advance - Decline: 2250-3438
Combined NYSE & NASDAQ New highs - New lows: 290-110
WTI crude oil: 98.77, +0.97
Gold: 1,193.60, -41.40
Silver: 19.19, -0.873
Corn: 430.50, +5.50

Wednesday, December 18, 2013

Fed Tapers Bond Purchases, Loosens Policy Guidance; Markets Love It

In a masterstroke of monetary legerdemain, outgoing Federal Reserve chairman Ben Bernanke delivered a final, resonant chord to his easy money policy of the past five years, announcing a reduction in the level of MBS and treasury bond purchases while simultaneously changing the guidance for rate policy going forward.

What the Fed has decided to do was to strike a delicate balance between the two policy initiatives currently employed. Bond purchases will henceforth be reduced from $85 billion to $75 Billion per month, shaving $5 billion from MBS and $5 billion from treasury purchases.

In its policy statement, however, the Fed took a different direction, emphasizing that the federal funds rate would remain at zero to 0.25% beyond the time at which unemployment falls below 6.5%. In other words, the Fed, as is their usual mode of operation, changed the game or moved the goal posts in terms of policy in order to accommodate a lower amount of bond purchases, in effect, maintaining equilibrium.

What the Fed is saying, somewhat tongue in cheek, is that their bond purchasing program (QE) has not quite brought about the desired results. The economy is not improving as rapidly as they anticipated, if at all, but, in order to not upset capital and equity markets with their bond purchase "tapering," they decided to loosen the language surrounding any future decision to raise interest rates.

It was quite the nifty move by the hands at the Fed, and both bond and stock markets behaved well along the lines anticipated by the manipulators of the world's money supply.

Stocks rose gratuitously, with the Dow and S&P closing at all-time highs; bonds remained distinctly calm. It was the perfect end to a reign of easy money that Bernanke has overseen, and gave the next man up, Janet Yellen, direction in which to pursue the Fed's policy directives.

The long and short of all the hype and hoopla over this final Fed meeting of the year and the last press conference by Mr. Bernanke is that the status quo was maintained and will be maintained for the foreseeable future. During his presser, the Chairman spoke of low inflation through 2016, with unemployment coming down gradually over a similar time period.

While the inflation expectations are well below what the Fed desires (2-2 1/2%), the 6.5% unemployment threshold has essentially been removed from all future Fed calculus.

When the world completes a couple more trips around the sun, at this time two years from now, it's expected that the Fed will no longer be purchasing bonds to the excessive degree it is today, and that unemployment will be much closer to "normalcy" at or near five percent.

In the real world, should everything proceed as the Fed anticipates, the economy, with interest rates still moored at zero, with 5% unemployment, the economy would be growing at a ripping rate so rapid that inflation would once again become a real problem.

Would it be so. The chances of everything working in straight lines toward a normalized economy is nothing more than a Fed fantasy. There will be disruptions and distortions and quite possibly another recession. Additionally, believing that pressures and changes from other parts of the planet would not be disruptive, is the purest height of folly.

The Fed hasn't really changed much at all. Reducing bond purchases by $10 billion per month is nothing more than a rounding error in the larger scheme of things. The punchbowl of free fiat has been left at the Wall Street party. Nothing has changed other than possibly, perception, and the person sitting in the Fed chair will be different.

The monetary can just got kicked down the road quite a stretch further. The new normal gets extended until something breaks.

DOW 16,167.97, +292.71 (+1.84%)
NASDAQ 4,070.06, +46.38 (+1.15%)
S&P 1,810.65, +29.65 (+1.66%)
10-Yr Note 98.78, -0.29 (-0.29%) Yield: 2.89%
NASDAQ Volume 1.83 Bil
NYSE Volume 3.74 Bil
Combined NYSE & NASDAQ Advance - Decline: 4252-1467
Combined NYSE & NASDAQ New highs - New lows: 311-112
WTI crude oil: 97.80, +0.58
Gold: 1,235.00, +4.90
Silver: 20.06, +0.219
Corn: 425.00, -1.75

Tuesday, December 17, 2013

Markets Flat in Advance of Fed Announcement

With little movement in the major indices - or individual stocks, for that matter - it is evident to anyone watching or participating in equity and bond markets that the financial world anxiously awaits the policy statement from the FOMC tomorrow at 2:00 pm ET, in which the Fed may or may not announce the tapering of its bond purchasing program.

Currently stuck at monthly figures of $45 billion in treasury purchases and another $40 billion in MBS (mortgage-backed securities), signs that the Fed may have enough reliable data to begin scaling the program back are still ambiguous. There have been hints, predictions and all manner of speculation on what the Fed will announce via their final policy meeting of the year, but one thing remains certain: the Fed must begin to curtail this program soon, not only because it has been ineffective, but that it could also do (and may have already) damage to the fragile economy.

On Wall Street, there's widespread belief that a cut-back in bond purchases by the Federal Reserve would cause a dip in the equity indices, being that there would be less of the free champagne money flowing to the TBTF banks, but a growing suspicion that the extent of these bond purchases, with money going to the connected and already-well-heeled, may be causing a rift of considerable proportions between the monied interests of the financiers and the rest of the planet.

Income disparity, already at an extraordinarily-high rate preceding the crisis of 2008-09, has been exacerbated by the easy money put into the hands of the rich, a trend which may be leading to suspicion, distrust and eventually, class enmity.

So, with less than 24 hours before what may be a significant announcement, traders have chosen to sit upon their collective hands, leaving volume at some of the lowest levels of the year.

Wednesday's FOMC announcement should provide some pre-holiday fireworks. If not, markets could just as easily rally from relief as sell off from disappointment. Whatever the Fed has planned for tomorrow should affect everything from stock prices to mortgage rates.

DOW 15,875.26, -9.31 (-0.06%)
NASDAQ 4,023.68, -5.84 (-0.14%)
S&P 1,781.00, -5.54 (-0.31%)
10-Yr Note 99.05, +0.77 (+0.79%) Yield: 2.86%
NASDAQ Volume 1.59 Bil
NYSE Volume 2.82 Bil
Combined NYSE & NASDAQ Advance - Decline: 2593-2889
Combined NYSE & NASDAQ New highs - New lows: 154-117
WTI crude oil: 97.22, -0.26
Gold: 1,230.10, -14.30
Silver: 19.84, -0.261
Corn: 426.75, +3.50

Monday, December 16, 2013

Anniversary Day: 240 Years Since the Boston Tea Party; 100 Years of the Fed

On December 16, 1773, the Sons of Liberty - disguised as Mohawk Indians,dumped 342 chests of tea into Boston Harbor as a nonviolent political protest of the Tea Act of 1773. The action, known as the "Boston Tea Party" is widely recognized as the initial protest of American colonists against the oppressive "taxation without representation" of the British crown which resulted in the Revolutionary War and the founding of the new Republic of the United States of America.

140 years, and note, not to the day, but one week later, on December 23, 2013, the Federal Reserve was officially chartered as the nation's central bank by enactment of the Federal Reserve Act.

The Boston Tea Party was the beginning of the movement which would evolve into a democratic republic which guaranteed the inalienable rights of its citizens; the creation of the Federal Reserve put the same nation's financial system under the control of a global banking oligarchy.

Sadly, the current governors of the Fed chose today to commemorate their founding, probably because the 23rd would be too "inconvenient" a date (too close to Christmas) for the stuffy old men and women.

It's reasonable to compare and contrast the success of the two moments in history. While most Americans take their rights for granted, even though they've been severely eroded by a monolithic federal government over the years, the Federal Reserve can best be described as a monumental failure for the economy of individuals but a rousing success for the secretive interests which control it. Over its nearly 100 years, the Federal Reserve has managed to induce several financial panics and crises including the Great Depression, innumerable recessions, various booms, busts and bubbles, a world war, and the devaluation of the US currency by more than 90 percent.

Smashing, absolutely smashing. And one wonders why December 16 is not a national holiday in commemoration of the Boston Tea Party and the 23rd a national day of mourning for the death of our currency.

DOW 15,884.57, +129.21 (+0.82%)
NASDAQ 4,029.52, +28.54 (+0.71%)
S&P 1,786.54, +11.22 (+0.63%)
10-Yr Note 98.87, +0.56 (+0.57%) Yield: 2.88%
NASDAQ Volume 1.82 Bil
NYSE Volume 3.16 Bil
Combined NYSE & NASDAQ Advance - Decline: 3821-1876
Combined NYSE & NASDAQ New highs - New lows: 218-106
WTI crude oil: 97.48, +0.88
Gold: 1,244.40, +9.80
Silver: 20.10, +0.497
Corn: 423.25, -2.25

Friday, December 13, 2013

Friday Brings Out Just a Few Bottom Fishers in Flat Market

There was a bit of moderation on Friday, at the end of a week which saw the major averages give up plenty of downside.

With a dearth of data and corporate news, there were probably more than a few active traders taking the early train out of town during the lackluster session. Some bottom fishing did occur - though not much - as belied by the A-D line, which favored advancing issues, for a change and very low volume.

For the week, the Dow lost 264.84 points (1.65%); the S&P gave up 29.77 (1.65%); the NASDAQ fell 61,54 points (1.51%); and, the NYSE Composite declined by 176.38 (1.74%).

A telling sign of overall weakness is represented by the broadest index (NYSE Comp.) being the worst performer for the week in percentage terms. Notably, the composite average broke through its 50-day moving average yesterday and stabilized below it today. Each of the other indices have room to spare above their respective 50-day lines.

New lows continued their dominance over new highs for the third straight session, 147-114. While that is by no means a trend, experience suggests that it could be marking a market top if new lows exceed the number of new highs for an extended period of eight or more consecutive sessions. More likely would be a back-and-forth between the daily highs and lows in a sideways trading pattern as a precedent to the market direction being decided.

The week was the worst for stocks since October, but by no means indicative of anything other than some late-year selling, fears of Fed tapering and the usual yin and yang between buyers and sellers.

More time and data need to be collected before calling for a change in direction, though the measured belief is that it is overdue, at least in the medium term. Strong support was tested and bounced off of at the lows of the day on the Dow, around 15,723.

DOW 15,755.36, +15.93 (+0.10%)
NASDAQ 4,000.98, +2.57 (+0.06%)
S&P 1,775.32, -0.18 (-0.01%)
10-Yr Note 99.02 +0.75 (+0.77%)
NASDAQ Volume 1.49 Bil
NYSE Volume 3.05 Bil
Combined NYSE & NASDAQ Advance - Decline: 3257-2361
Combined NYSE & NASDAQ New highs - New lows: 114-147
WTI crude oil: 96.60, -0.90
Gold: 1,234.60, +9.70
Silver: 19.60, +0.151
Corn: 425.50, -8.75

Thursday, December 12, 2013

Stocks Pounded Lower Again; December a Month of Not-so-Happy Holidays

Declines in equity prices are beginning to get a little bit serious, with the Dow Jones Industrials taking another 100+ point hit on Thursday after retail sales for November came in strong, but were unable to inspire confidence in the consumer sector, and unemployment claims shot up beyond expectations, to 368,000, not the kind of number expected during what is supposed to be the "busy" holiday shopping season.

Since the peak of 16,097.33, reached the day before Thanksgiving (November 27), the Dow is off 357 points, putting in a new interim low today. Still, that's a loss of just over two percent, not anything to get excited over, but the trend since Black Friday has been pronounced, with just two up days in the past 10 sessions.

Worse, new lows have taken a huge edge over new highs as of today, portending further losses should the trend extend.

The selling spilled over into precious metals, with gold and silver reversing gains made yesterday. Selling off of the metals may be a precursor of more asset depreciation, or, it could be just more of the constant discrediting of gold and silver as stores of value. It's a preposterous argument, made manifest by the fact that precious metal prices are derived from paper trading, which has nothing whatsoever to do with the intrinsic value proposition which only physical objects hold.

Overall, it's just getting a little too ugly for speculators with the year-end arriving in just 12 trading days.

DOW 15,739.43, -104.10 (-0.66%)
NASDAQ 3,998.40, -5.41 (-0.14%)
S&P 1,775.50, -6.72 (-0.38%)
10-Yr Note 98.86 -0.15 (-0.15%) Yield: 2.88%
NASDAQ Volume 1.75 Bil
NYSE Volume 3.28 Bil
Combined NYSE & NASDAQ Advance - Decline: 2513-3135
Combined NYSE & NASDAQ New highs - New lows: 66-314
WTI crude oil: 97.50, +0.06
Gold: 1,224.90, -32.30
Silver: 19.45, -0.903
Corn: 434.25, -5.00

Wednesday, December 11, 2013

Stocks Suffer Heavy Losses in Biggest Two-Day Selloff in Two Months

Not since the uncertainty surrounding the government shutdown in October have stocks suffered through a two-day period such as the one ended Wednesday afternoon.

Stocks were lower at the open and never gained positive ground for the entirety of the session.

Besides the usual fears of Federal Reserve tapering in December (or soon thereafter, as everybody knows it's coming), the latest buzz comes from the far East, where talk of China's overcapacity in an enormous number of industries is fueling speculation of a slowdown in the growth rate of the world's most populous nation.

Another way of expressing overcapacity concerns is slack demand in consumer countries from the USA to the various Eurozone nations and Great Britain. All taken together, a slowdown could be coming at exactly the wrong time for the resident intellectuals at the Fed, who may see their hand forced to curtail - at least to some extent - their bond purchases.

The three-headed monster of slowing industrial growth, slack consumer demand and a pullback of stimulus appears ready to launch an attack on wary equity investors who have been mostly riding a liquidity gravy train for nearly the past five years.

While the two-day selling event may portend even more selling heading through December - usually one of the strongest months for stocks - the fact that the major averages have been down seven of the last nine sessions, belies the false move presented last Friday on November's blowout non-farm jobs data when the Dow was up nearly 200 points. Monday's five-point gain on the Dow was nothing more than a rounding error. Today and yesterday's losses have nearly given all of last Friday's gains back. The Dow is just 22 points above last Thursday's close, setting up this Thursday (tomorrow) as a potential mini-correction if the Dow closes below 15,821.51.

Technical damage has been done recently, both to blue chips and more speculative issues. The NASDAQ suffered the brunt of the selling today, losing nearly 1 1/2 percent on the day. Declining issues outnumbered advancers by more than a four to one margin.

Another concern is volume, which picked up in today's downside trading. Making matters even more bearish were the new lows, which completely subsumed today's new highs, 208-104, a key indicator for direction, and, if it holds, a sure signal for a market correction or outright bear market, something which is probably long overdue.

Happy Holidays? Depends upon which side of the trade you're on.

DOW 15,843.53, -129.60 (-0.81%)
NASDAQ 4,003.81, -56.68, (-1.40%)
S&P 1,782.22, -20.40 (-1.13%)
10-Yr Note 99.46 +0.30 (+0.30%) Yield 2.84%
NASDAQ Volume 1.78 Bil
NYSE Volume 3.46 Bil
Combined NYSE & NASDAQ Advance - Decline: 1096-4603
Combined NYSE & NASDAQ New highs - New lows: 104-208
WTI crude oil: 97.44, -1.07
Gold: 1,257.20, -3.90
Silver: 20.36, +0.041
Corn: 439.25, +3.25

Tuesday, December 10, 2013

Another Dismal Day in the Dumps for Stock Owners

Certainly, nobody is going to feel sorry for the Wall Street lemmings, vultures and whales for another losing day on stocks. After all, the major averages are up more than 25% on the year and a good number of individual issues are up much more than that, many having doubled in price over the past 48 weeks.

So, excuse us if we cry crocodile tears for well-heeled investors and speculators.

There is, however, a little bit of a problem in the markets, and it is completely and everlastingly tied to the Federal reserve and their Zero Interest Rate Policy (ZIRP) and continuing quantitative easing (QE), about which there is much debate, constrnation and confusion.

The final meeting of the year for the FOMC is slated for next Tuesday and Wednesday, and, while nobody in their right mind expects this august body to announce any rate policy changes, there is the small matter of decreasing the amount of securities the Fed is buying every month (QE) from the current $85 billion to something less than that, otherwise known as "tapering."

CNBCs Steve Liesman, who has a pipeline directly to and from the Fed, announced today that tapering would be announced at the December meeting. That news, and the final acceptance and future implementation of the Volker Rule, sent stocks backpedaling from the outset. The Volker Rule, in essence, disallows banks from engaging in speculative trading with depositors' money, something the various agencies feel was responsible for at least a part of the financial crisis of the past five years.

The rule puts severe restrictions on what banks can and can't do in terms of proprietary trading (i.e., speculating), but it is dense, long, deep, and riddled with potential loopholes for crafty lawyers and bankers to slither all kinds of nefarious doings through. The Volker Rule document - three years and 585 pages in the making - is, in reality, nothing more than a full-employment bill for litigation attorneys. Bully for them.

QE, and, more specifically, the tapering of QE, is another animal altogether. The Fed has been jawboning about the possibility of scaling back their bond purchases - $45 billion in treasuries and $40 billion in MBS - since May, with varying degrees of success. Wall Street banks, being the main beneficiaries of the program, would like the policy to extend to infinity and beyond, though they know in their dark heart of hearts that it must come to some kind of conclusion. The US economy cannot be force-fed money by the central bank forever.

Besides the program being excessively beneficial to banks and somewhat harmful to small businesses, consumers and emerging market nations, there is another problem that the Fed may never have considered. Due to their monopolizing of the MBS and treasury markets, the available bond issuance is dwindling, so much so, that the Fed may have no choice but to wind down such programs.

The other side of the equation is such that the Fed has so far crowded out potential bidders that there may not be many who actually want to participate. Thus, many in the bond world see even a slight decrease of buying by the Fed as a potential for higher interest rates, including interest on government debt itself, which is already a large portion of the Federal budget but could grow into a behemoth should the federal government have to begin paying back interest at higher and higher rates.

These are the unforeseen, though somewhat predictable, ramifications of the Fed's actions, actions that forestalled an implosion of the financial system and the insolvency of many of the world's largest financial institutions, dating back to the halcyon days of 2008 and $800 billion in TARP money and then-Fed Chairman Hank Paulson holding a gun to the economy's head.

So, Liesman may be bluffing at the behest of the Fed, or he could have just issued the warning shot to the markets that the plundering of assets with free money is about to come to an end.

The signs that the policy has run its course are profligate: record art and collectible car auctions, record high-end real estate prices, record stock prices.

Enough is enough. The party is about to come to a crashing, cataclysmic conclusion, and as cataclysms usually are, this one is not likely to be pretty.

Technically speaking, the advance-decline line deteriorated again today, the gap between new highs and new lows continues to show signs of shrinking and potentially flipping, and outside of Friday's massive vapor-rise, stocks have fallen every day since Thanksgiving.

The good news (for some) is that commodity prices took a lift today, with silver and gold leading the way.

DOW 15,973.13, -52.40 (-0.33%)
NASDAQ 4,060.49, -8.26 (-0.20%)
S&P 1,802.62, -5.75, (-0.32%)
10-Yr Note 99.43, +0.37 (+0.37%), Yield: 2.80%
NASDAQ Volume 1.71 Bil
NYSE Volume 3.07 Bil
Combined NYSE & NASDAQ Advance - Decline: 2115-3553
Combined NYSE & NASDAQ New highs - New lows: 206-113
WTI crude oil: 98.51, +1.17
Gold: 1,261.10, +26.90
Silver: 20.32, +0.614
Corn: 436.00, -2.00

Monday, December 9, 2013

No Follow-Through After Big Jobs Report Gains

We've seen this show before, and, it bears witness to the steady downtrend last week that was punctuated by a huge move to the upside on Friday. The non-momentum Monday is the hangover effect of a stock move that was entirely day-trading driven, run on fumes and now run out of gas.

It shows no commitment among traders to actually invest; rather, it solidifies the argument that Wall Street stocks are nothing but casino chips, their valuations unrealistic and devoid of fundamental value, or, at least, fundamentals that would support such stocks at lower prices.

Thanks to Uncle Ben at the Fed we have a completely distorted market that is fueled by creap money and speculation. It was nice knowing Mr. Bernanke, who could step down as early as this week if the Senate confirms Janet Yellen, though she, as replacement, seems even more out-of-touch and reluctant to do anything other than continue printing.

Stocks will keep going up, until they don't, which could be any day now, considering the predictably ugly numbers retailers are set to report this week and throughout the holiday season.

Basically, if one spent today watching the tape, one would have likely fallen asleep.

DOW 16,025.53, +5.33 (+0.03%)
NASDAQ 4,068.75, +6.23 (+0.15%)
S&P 1,808.37 +3.28 (+0.18%)
10-Yr Note 99.20 +0.18 (+0.18%)
NASDAQ Volume 1.54 Bil
NYSE Volume 3.09 Bil
Combined NYSE & NASDAQ Advance - Decline: 2599-3043
Combined NYSE & NASDAQ New highs - New lows: 305-96
WTI crude oil: 97.34, -0.31
Gold: 1,234.20, +5.20
Silver: 19.70, +0.178
Corn: 438.00, +3.75

Friday, December 6, 2013

November Jobs: 203,000; So, Now Good News Is Good News?

Highly anticipated all week, the November Non-farm payroll report from the BLS showed 203,000 jobs created during the month. The official unemployment rate fell to 7.0%, which, for all intents and purposes, is pretty close to not just the Fed's 6.5% target for raising interest rates, but not too distant from what is regarded as full employment at five percent unemployed.

Initially thought to be a negative if the number came in anywhere above official estimates of 185,000, index futures got ramped higher and stocks were off to the races, opening with a huge gap higher and maintaining price levels throughout the final session of the first week of December.

For the week, the Dow was down just 66.21 points; the S&P missed closing positive by a mere 0.72; and, the NASDAQ actually closed in the green for the week by 2.63 points.

Opinions varied widely about what the movement in stocks meant, based upon the potential for tapering of the bond buying program by the Fed. In general terms, the Fed now has Wall Street's tacit approval to begin winding down the $85 billion a month program as early as this month. either that, or today's trading, and all the supposed "fearful profit taking" of the first four days of the week were simply short-term momentum trades, rooted in absolutely nothing.

In any case, those who were short the market for the better part of the first four days of the week and then went long at the close on Thursday (cue insider bankster types) were big winners. Anybody who waited for the number to be released prior to the opening on Friday, ate dust.

And that, my friends, is how the game is played. Good news may very well be perceived as bad news, until the size players decide that good news is good news, after all. Pure thievery at a high level is probably the most apt description of how this week played out. A telltale sign was the absurdly low volume, especially coming in anticipation, and, on the heels of a critically "important" number.

Thank goodness, Christmas is less than three weeks away and the retailers haven't had much to say, but that card will be turned shortly, and it could be a wild one.

DOW 16,020.20, +198.69 (+1.26%)
NASDAQ 4,062.52, +29.36 (+0.73%)
S&P 1,805.09, +20.06 (+1.12%)
10-Yr Note 99.03, +0.74 (+0.76%)
NASDAQ Volume 1.49 Bil
NYSE Volume 2.74 Bil
Combined NYSE & NASDAQ Advance - Decline: 3965-1711
Combined NYSE & NASDAQ New highs - New lows: 310-112
WTI crude oil: 97.65, +0.27
Gold: 1,229.00, -2.90
Silver: 19.52, -0.047
Corn: 434.25, +0.75

Thursday, December 5, 2013

Dow, S&P Post Fifth Straight Losing Session; Fed Tapering Fears to Blame

Stcks took another turn lower on Thursday after the government reported its second estimate of GDP for the third quarter grew at a rate of 3.6%, far ahed of even the most bullish estimates and a dramatic revision from the first estimate of 2.8% growth.

Inside the numbers, more than half of the GDP push was due to inventory builds, the consumer spending portion of the calculation lower than previous quarters. Additionally, the govenment changed the way it calculates GD per the second quarter, so the adjusted figures include intangible assets (normally treated as liabilities on any corporate balance sheet, but as growth assets according to the infamous trick economists the government employs). All estimates of GDP from the second quarter of 2013 onward, and especially during the initial quarters through the second quarter of 2014, should be viewed as more mark-to-fantasy accounting by the government, designed to make the economy look better than it actually is.

The new calculus of GDP is a double-edged sword going forward, as higher GDP emotes thoughts of Fed tapering of bond purchases, currently the lifeblood of the stock markets. While it looks good on the surface, the net effect in stocks is negative, for now.

In some glorious, imagined future world, higher GDP, based on various faulty assumptions, will produce a happiness effect or contentment, which, along with the Fed's highly-dubious but nonetheless heavily-touted "wealth effect" will be hailed as the outcome of successful Fed policies or some other rubbish, and, which the lazy, out-of-touch politicians in congress and the White House can somehow claim credit.

Sadly, or perhaps happily, in this good-news-is-bad-news regime, the headline-munching algos controlling the stock market can't read between the lines and are programmed to sell on economic improvement, whether the data is flawed or pristine. The Wall Street herd (and it is nothing other than herd mentality dictating direction) is equally deficient by buying into flawed data, but those are the cards issued by the underhanded Fed bottom-card-dealing Fed. The choice to raise, hold or fold is entirely up to the traders, though at this juncture, they're collecting their profits and running from the gaming tables in advance of november non-farm payrolls, due out Friday at 8:30 am ET.

The other number issued today was courtesy of the BLS in weekly initial jobless claims, coming in at 298,000, a six-year low, the good news just adding more melancholy to traders who have brought the Dow and S&P indices lower for the fifth straight session.

Those paying attention to internals will note that the advance-decline line continues to erode, and that new lows finally overtook new highs today, for the first time since early October. Those two indicators will be supplying signals beyond the November non-farm payroll data tomorrow and should be viewed as the least-abused and most reliable signs for market direction.

Precius metals were hammered lower once again, though nary a gold or silver bug can be heard complaining, considering the lowered prices to be akin to a pre-Christmas sale on the metals.

DOW 15,821.51, -68.26 (-0.43%)
NASDAQ 4,033.16, -4.84 (-0.12%)
S&P 1,785.03, -7.78 (-0.43%)
10-Yr Note 99.08 0.00 (0.00%)
NASDAQ Volume 1.79 Bil
NYSE Volume 3.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 2217-3433
Combined NYSE & NASDAQ New highs - New lows: 127-164
WTI crude oil: 97.38, -0.18
Gold: 1,231.90, -15.30
Silver: 19.57, -0.26
Corn: 433.50, -3.00

Wednesday, December 4, 2013

Stocks Plunge, Recover, End Flat on Fed's Beige Book, Data

A raft of economic news hit the street on Wednesday, but, for the most part, all it did was add to the confusion surrounding the Fed's bond-buying scheme and Friday's non-farm payroll release for November.

Leading off the hit parade - prior to the open - was ADP's November private payroll number, gushing at a robust 215,000 new jobs created during the month, which turned futures sour and set a negative tone for the session (remember, good news is bad because the Fed would likely diminish the free money carry trade known as QE).

Then came data on the US trade deficit, which narrowed to $40.6 billion, more good news. New home sales surged 25%, though the median price declined slightly, another positive for the economy.

The mood changed with ISM Services data, showing a slowing from 55.4 in October to 53.9 in November. Overall, the mood on Wall Street turned to fear of an improving economy (sad, but true how twisted the logic is), sending stocks to their lows of the session around midday.

With the Dow off 125 points and the other major indices following suit, the Fed's beige book was released at 2:00 pm ET, and, apparently, enough investors and traders found enough evidence to believe that the Fed was nowhere close to tapering their bond purchases, igniting a rally that sent the Dow into positive territory briefly in the final half hour of trading.

While this is a plausible explanation of the day's roller coaster activity, some did not get the memo or read the tea leaves of the Fed clearly enough, as the rally sizzled, then fizzled into the close, leaving the Dow and S&P modestly lower, the NASDAQ up a couple of points.

At the end of the day, it was a big, fat, nothing=burger, though some adroit day-traders certainly cashed in on the movement and momentum.

With the Dow down for the third time in three December days, it marks the first time that's happened to start a month since September, 2011.

The BLS monthly non-farm payroll report will be released Friday morning, leaving Thursday as a kind of limbo trade. Based on the smashing results of the ADP report, expectations are for a boffo government report, producing, alas, another downdraft on stocks. such is the madness that moves markets in the age of QEternity and ZIRP until the end of time.

Thursday, therefore, would be a good day to relax, take some time off and buy some gold or silver, both of which saw heavy buying after weeks and weeks of relentless selling. A bottom may have been put in on the precious metals, or not. In any case, they're very cheap compared to prices over the past three years. Besides, they're shiny and guaranteed not to rust.

Bonds sold off, with the 10-year note hitting 2.84% yield at the end of the day, a watershed mark and the highest yield since October.

Volume was relatively strong, the advance-decline line continued to post a negative number, and the gap between new highs and new lows narrowed to its lowest point since the government shutdown in October, a key number on which to train one's investment eyes.

DOW 15,889.77, -24.85 (-0.16%)
NASDAQ 4,038.00, +0.80 (+0.02%)
S&P 1,792.81, -2.34 (-0.13%)
10-Yr Note 99.18, -0.03 (-0.03%)
NASDAQ Volume 1.81 Bil
NYSE Volume 3.59 Bil
Combined NYSE & NASDAQ Advance - Decline: 2236-3418
Combined NYSE & NASDAQ New highs - New lows: 150-111
WTI crude oil: 97.20, +1.16
Gold: 1,247.20, +26.40
Silver: 19.83, +0.765
Corn: 436.50, +5.25

Tuesday, December 3, 2013

Desptie Fed PMO of $3.7 Billion, Stocks Swoon

Something is definitely amiss in US equity markets.

While that may be the most understated understatement of the year - or the past five - even an injection of $3.7 billion from the Fed's Permanent Open Market Operations (POMO) couldn't get stocks to attain escape velocity.

And that's the problem. Velocity. There simply isn't any, in the stock markets (for now, though that will likely change) and especially in the outside economy where every extra dollar is being spent consolidating debt, paying down debt or going into a rainy day fund, because people, humans, have this uncanny knack for knowing when trouble is on the horizon.

Call it a Spidey-sense tingling, or intuition, or maybe people can simply see what's going on: politicians lie and don't deliver; economics are skewed toward corporations, not individuals; the government protects banks and ignores the plight of the people; Wall Street continues to enrich itself at the expense of the American people; Obamacare; eroding rights; call it what you will, but it's a fact that more than two thirds of the people in the United States believe the country is going in the wrong direction.

There are less people now who have a positive view of congress than there were supporting the king of England on the advent of the American revolution. People are afraid, so they don't spend, and, since consumer spending is the fuel of the economy, i.e., velocity, the velocity of money has been slowing and is nearing stall speed. The money the Federal Reserve pumps via their POMOs and bond-buying-binge ($85 billion a month) is not going into the general economy. It goes largely into excess reserves which the banks borrow from for speculation, mostly into stocks, but even this is not providing the lift.

The major indices spilled into the red for the second straight day during December. A large part of that spillage may be profit-taking, but there's also a valuation angle that must be addressed. Some stocks are at nosebleed levels. Others are backed by businesses which may or may not be very well-managed. Future-looking analysts paint a rosy picture for 2014, but the reality is that many corporations are seeing margins being squeezed, stock buybacks at all-time highs and labor cutbacks that are straining their collective workforces.

Then, there's Obamacare, which has had the unique ability to cut workers' hours to under 30 per week, limiting productivity and job security, while adding costs - and uncertainty - to the bottom line of many businesses, large and small.

It's a shipwreck, a train wreck, a slow motion un-natural disaster and it's being played out in real time on Wall Street. It's been said here and elsewhere ad nauseum that the greed, lying, cheating and stealing by Wall Street and Washington will eventually have to be paid back in an inglorious reversal of fortune. Could that reversal be taking place, right now?

Maybe, but probably not. These things, like the destruction of the entire economic system of a nation with the reserve currency, take time. It's not going to happen overnight, though the past five years have evidenced dislocations and distoritions to markets and price discovery mechanisms unlike any other time in recorded history.

The abomination has arrived... in 2008. We're only just now beginning to deal with the nasty side-effects of trying to deal with it without causing pain.

Now comes the pain. Detroit is first up for the beatings.

DOW 15,914.62, -94.15 (-0.59%)
NASDAQ 4,037.20, -8.06 (-0.20%)
S&P 1,795.15, -5.75 (-0.32%)
10-Yr Note 99.88, +0.70 (+0.71%)
NASDAQ Volume 1.72 Bil
NYSE Volume 3.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 2168-3505
Combined NYSE & NASDAQ New highs - New lows: 142-113
WTI crude oil: 96.04, +2.22
Gold: 1,220.80, -1.10
Silver: 19.06, -0.224
Corn: 431.25, +6.75

Monday, December 2, 2013

On Cyber Monday, Black Friday Left Wall Street Red-Faced

So, everybody was shopping online today, this being Cyber Monday, the busiest online shopping day of the year, right?

Well, maybe, but there were a lot of people shopping online last week, instead of fighting the mobs at the malls and big box stores; so many, in fact, that Black Friday didn't really live up to the hype. It was kind of a bust, as the voting, via stock trades on Monday, clearly demonstrated.

Stocks took a nosedive at the end of the day, as they've done the past three sessions, led by the two strongest consumer sectors. Consumer discretionary was the loss leader of the day, with names like Aeropostale (ARO, -5.5%), Urban Outfitters (URBN, -3.5%) and Sears (SHLD, -5.2%) leading the way down.

That's not a good sign for the holiday season, which, according to now-skeptical analysts, expect to be the worst since 2009.

Retailers were not completely to blame for Monday's selloff, which was led by the Dow Industrials. Rather, the selling, which accelerated into the close, as has been the recent motif, was probably tied more to profit-taking. After all, stocks have had a stellar run in 2013, with the Dow up 26%, the NASDAQ ahead by nearly 30% and the S&P sporting a 28% rise on the year.

It's been a grand year to buy and hold stocks; one certainly can't blame anyone for partaking of some fat holiday profits, but the overall trend of trading has been puzzling to the perma-bull crowd, with the current bull market closing in on 57 months.

The trend may remain intact for a while longer, though, because there's nearly zero chance of the Federal Reserve announcing any kind of tapering of their bond purchase program at the December meeting of the FOMC (Dec. 17 & 18), risking market displeasure and a downturn which would cast quite a negative pallor on an otherwise outstanding year for speculators, risk-takers and even cautious investors.

That's why it would be unwise to read too much into one day's trading, or even the recent pattern of late-session selling at this juncture.

The likelihood is that profit-taking will be pushed forward into the first few weeks of December, saving the upside for the wise guys who know, above all, that the Fed isn't going to make any substantive end-of-year changes. If anything, investors should stand pat until the 30th, because the Fed will ensure a Merry Christmas and a Happy New Year for all.

On the flip side, gold and silver were absolutely smashed lower. Whether the continued selling is part and parcel of the recent distaste for anything not fiat-related or more of an exacerbated "sell the losers" mentality is an open question not soon to be answered.

Dow 16,008.77, -77.64 (-0.48%)
NASDAQ 4,045.26, -14.63 (-0.36%)
S&P 1,800.90, -4.91 (-0.27%)
10-Yr Note 99.58 -0.42 (-0.42%)
NASDAQ Volume 1.61 Bil
NYSE Volume 3.08 Bil
Combined NYSE & NASDAQ Advance - Decline: 1620-4074
Combined NYSE & NASDAQ New highs - New lows: 316-90
WTI crude oil: 93.82, +1.10
Gold: 1,221.90, -28.50
Silver: 19.29, -0.744
Corn: 424.50, 0.00

Friday, November 29, 2013

Disturbing Late Sell-Off Trend Undermined Stock Gains This Week

For the third time in the past four sessions, the major indices exhibited what can only be described as a disturbing trend: a late-day sell-off sending the averages back down to, or below, their opening levels.

This similar pattern - of stocks rising in the morning, leveling off and then dropping like stones off a mountain, has been identified this past Monday and Tuesday, and was exceptionally profound in the short session, Friday.

In general terms, no news accompanied the rise or falls, so, it should be regarded as an algorithm-trading-based function, as it's unlikely that humans would react in such herd-like behavior (well, maybe) as stocks have shown this week.

Friday's decline on the Dow and S&P (the NASDAQ managed to finish positive) might be viewed by those more occupied with Black Friday shopping than stocks as a minor issue - only 10 points on the Dow - though taken with the perspective of the whole 3 1/2-hour trading day, the dump was off a level that had the Dow at all-time highs, up 78 points on the day in early trading, finally losing all bids in the final twenty minutes.

Delving deeper into the phenomenon, Friday's decline could be the result of channel checks or car counting at selected retail locations that some organizations were conducting over the course of what is widely believed to be the biggest retail shopping day of the year. If, for instance, some of the trading firms were being fed less-enthusiastic figures from the field, it's not outside the realm of speculation that some adroit stock jocks could have been taking profits late in the day, and that would bode ill for a shopping season that's already six days shorter than last year's and, according to some analysis, may be the worst holiday season since 2009.

In that case, stocks should be expected to not just fail at the close, but moreso at the open, in coming days. Traders will have the weekend to figure this out, so, looking forward to Monday, a quiet open and negative finish might just confirm the retail fears. Saturday and Sunday shopping will be recorded by the compilers of such data and disseminated to market participants well ahead of Monday's opening bell.

With November jobs data due out Friday, the first week of December may be a watershed event for traders. Stocks are up significantly over the course of the year, by some measures, exceedingly so, and there hasn't been a sizable pullback in stocks since the government shutdown in November.

Additionally, the ACA website is supposed to be up and running at 80% capacity come Saturday, and more issues with the entire ObamaCare program might just give speculators enough reason to put on the brakes.

Of course, money has to go somewhere, so there's likely an equal chance that there will be a "Santa Claus" rally on top of this year's already-substantial gains, and the recent trend of late-day selling disregarded as nothing more than an algorithmic anomaly.

Whatever the case, next week bears close scrutiny, no matter which way one is playing the market. The larger picture, with stocks being buoyed by the Fed's incessant money-creation, remains decidedly bullish.

DOW 16,086.41, -10.92 (-0.07%)
NASDAQ 4,059.89, +15.14 (+0.37%)
S&P 1,805.81, -1.42 (-0.08%)
10-Yr Note 99.96, -0.07 (-0.07%)
NASDAQ Volume 823.70 Mil
NYSE Volume 1.59 Bil
Combined NYSE & NASDAQ Advance - Decline: 3173-2307
Combined NYSE & NASDAQ New highs - New lows: 528-27
WTI crude oil: 93.25, +0.95
Gold: 1,250.60, +12.80
Silver: 19.98, +0.348
Corn: 424.50, -2.00

Wednesday, November 27, 2013

Stocks Post More Gains Prior to Thanksgiving Holiday

The S&P and Dow set new all-time closing marks on Wednesday and the NASDAQ is approaching levels not seen since the dotcom boom (and bust), but, according to just about anyone who appears on CNBC or Bloomberg, there is no bubble in equities.

And, the Fed buying up $85 billion in bonds every month is normal. Gold stuck around $1250 is normal.

The p/e of Facebook (FB) is 77. Nope, no bubble there. Carry on.

Happy Thanksgiving.

The markets are open until 1:00 pm ET on Black Friday, which is usually a big ramp-up day on low volume, so sharpen up your day-trading skills and make some easy moolah while everyone else is out shopping.

Better get bitcoin. If you don't know what bitcoin is, you'd be doing yourself a favor to find out.

DOW 16,097.33, +24.53 (+0.15%)
NASDAQ 4,044.75, +27.00 (+0.67%)
S&P 1,807.23, +4.48 (+0.25%)
10-Yr Note 99.90, -0.20 (-0.20%)
NASDAQ Volume 1.33 Bil
NYSE Volume 2.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 3691-1937
Combined NYSE & NASDAQ New highs - New lows: 469-55
WTI crude oil: 92.30, -1.38
Gold: 1,237.80, -3.60
Silver: 19.63, -0.215
Corn: 426.50, 1.75

Tuesday, November 26, 2013

Why There's No Inflation and No Growth... (and why that's good for some)

Stocks were up modestly on Tuesday, as is the usual practice during the week of Black Friday Thanksgiving. There's a general feeling of well-being about, and, even though the gains this year have been the best since something like 1997, buyers of stocks know how to do nothing else, so they keep on buying. Actually, the turn-about in the inal half hour erased most of the day's gains on the Dow and S&P, especially. The NASDAQ finished above 4000, for the first time since 2000, when it crossed that threshold from the other side.

Stocks, bought with ridiculously cheap money via the Fed, are, and have been, producing fatastic returns for many investors and holders of pensions, 401ks, IRAs, etc., but the nagging suspicion that it can't really be this easy continues to gnaw at the fringes of consciousness.

For now, it really is this easy. There's no compelling reason to do anything but buy more stocks, not sell and keep watching them go higher. It's a very powerful positive feedback loop. The Fed's continuous debt-purchasing and zero-bound interest rates fuel the stock market, have contributed greatly to the rebound in real estate prices, but, stubbornly, unemployment simply won't go down appreciably, and that's an issue, though most of the barons of the financial world can't, or don't, really care about the ordinary citizens struggling to eke out a living.

Also troubling is the idea that all this debt-binge-buying by the Fed hasn't produced inflation, which, according to all Keynesian estimates on the topic, should be raging by now.

But, something un-funny happened on Ben Bernanke's way to the printing press. While the Federal Reserve and the behemoth banks have been busy leveraging up, the average American (and European) has been leveraging down, using the limited free money that comes their way to pay down debt, stop spending frivolously and horror of horrors, save.

Official statistics will deny that Americans are saving anything at all. Many, for certain, are not. In fact, HELOC loans are once again on the rise. But others, quietly, off-the-radar, have been squirreling away small amounts, mostly in cash, though some in gold, silver, bulk foods, and saving in other ways like repairing an aging vehicle instead of buying a new one, shopping at discount stores, buying online, bartering and other creative ways that are having an unseen impact because they are individually so small as to be unnoticeable, but collectively, they become huge.

Imagine, for a minute, the impact of 10,000 people individually not buying one Starbucks coffee per week. On the individual basis, it's three or four dollars. Collectively, however, it's $30-40,000. Then start adding up the other ways people are saving. Driving less or coordinating their driving to do many tasks on one trip. A couple of dollars a week. Home gardens that can shave $10 to $40 off a family's food bill in season is another hidden savings the statisticians can't capture with their computers. There are many, many more practical methods people are using today to save on everything from food to fuel to... well, you name it. Cut your own hair, heat with firewood partially, buy clothes at thrift stores, eat out less (or not at all), don't go to movies, and on and on and on.

The Fed doesn't get it. Wall Street doesn't get it. Most public employees don't get it. They're conditioned to be like their co-workers. Buy a new car, or lease one. Eat out for lunch. See the latest movies. Buy new clothes. They, and the 47 million on food stamps, are keeping the economy just clinging to life. But, despite the added liquidity by the Fed, it's not working so well. Corporations aren't beating their revenue figures. Bottom lines are good, but much of it is due to shrinking the number of shares outstanding via stock repurchase programs, which also add to the stock market boom.

But, there's a horde of people out there who are getting out of the system, cutting their cable bills, credit cards, magazine subscriptions, and, soon, because of the nightmare that is ObamaCare, their monthly health insurance bill.

Some, like economists at the Fed or analysts on Wall Street, might call these types an underclass. In reality, they are the new freedom class, untying the knot of debt, freeing their minds from the day-to-day toil and keeping up with the Joneses mentality that feeds the corporate machine.

The signs of frugality and savings - despite the overblown hype of Black Friday being bellowed by the big merchants - are everywhere. Gold, silver, bitcoin, eBay, Craigslist, barter exchanges, healthy, home-grown foods instead of corporate fast-food mulch, economy cars, hybrids and public transportation are all taking the bluster out of the Wall Street boom.

When the dust settles, when the Fed stops printing to infinity and the economy begins to normalize, there's an old adage used by printers, manufacturers and writers of software that will be apropos: "Garbage In, Garbage Out."

The garbage in is the cheap money the Fed has been printing nilly-willy. The garbage out will be a steady, possibly spectacular, stock market decline. It may not be a crash, happening all of a sudden, but there will be a bear market, eventually. After all, this bull run began in March 2009. It's now a 57-month old bull, which, by most measures, is a little long in the tooth. The signs are everywhere. Corporate profits are of exceedingly poor quality (garbage out).

When this era of cheap money comes to an end - and end it will - many who made money all along will be left holding stocks worth much less than what they paid for them. Many of the companies represented by these stocks will have upside-down balance sheets because of all the stock they bought back at nose-bleed prices. And that's going to be a real problem, causing more layoffs, consolidations, and bankruptcies (yes, we still have them). JC Penny will be the first to go. They're overdue and probably will file within months after the holiday season, which, for them, will be a disaster. They will be followed by Sears, and then after the retailers get moving in the wrong direction, the filings will snowball.

Garbage in, garbage out. Those who've been saving, rejecting the debt-slave system and prepping will be much less affected, already living well within their means and enjoying it.

Happy Thanksgiving!

DOW 16,072.80, +0.26 (+0.00%)
NASDAQ 4,017.75, +23.18 (+0.58%)
S&P 1,802.75, +0.27 (+0.02%)
10-Yr Note 100.36, +0.31 (+0.31%)
NASDAQ Volume 1.79 Bil
NYSE Volume 3.40 Bil
Combined NYSE & NASDAQ Advance - Decline: 3292-2338
Combined NYSE & NASDAQ New highs - New lows: 431-93
WTI crude oil: 93.68, -0.41
Gold: 1,241.40, +0.20
Silver: 19.85, -0.034
Corn: 424.75, -6.50

Monday, November 25, 2013

Stocks Rise, Then Fall, End Flat; Dow Up 16X in 31 Years Though Not the Same

Stocks flew at the open, making the highs of the session, then backtracked, recovered and finally flat-lined until 3:00 pm ET, when selling commenced, taking the indices back to break-even for the day.

It was mostly a senseless trade, kicking off a holiday-shortened week which will feature lower volume than usual (if that's possible) and giddiness surrounding the holiday shopping season, which almost always produces an up session on the short Friday after Thanksgiving.

A few friends were commenting on the wisdom of a buy and hold strategy for the long haul as the Dow Jones Industrials crossed the 16,000 threshold this past Friday. One idea was that holding an index fund of Dow stocks from late 1982 to the present would have resulted in a 16X return on your money, or $10,000 invested in the Dow in 1982 - the last time the Dow crossed the 1000 mark and did not fall below it - would be worth $160,000 today.

It's an interesting concept, but, in case somebody wanted to just buy all the individual stocks in the Dow 30 blue chips, it would have probably been a more profitable, albeit time-consuming endeavor. Of the 30 stocks in the Dow today, only 10 of them were part of the index back in late 1982.

Those ten are AT&T, American Express, IBM, duPont, 3M, Proctor & Gamble, GE, United Technologies, Merck and Exxon (merged with Mobil to form ExxonMobil).

In those 31 years, the composition of the Dow changed 13 times, including eight times since 2003. Not to say that the stocks in the Dow are all magnificent winners, but how one gets a 16X return is by taking out under-performers and replacing them with stocks which have a better chance of appreciation, kind of a shell game, though one could have done well just holding any fund indexed to the famous average.

By way of comparison, the S&P 500 rose from about 140 to the current level just above 1800 in the same time period, a gain of just over 13X. Of course, the S&P has even more movement in and out of the index, and weightings are changed periodically. Overall, it gets re-jiggered more often than the Dow.

It's how Wall Street produces outsize profits for investors; they change the game constantly or as conditions warrant. It begs the question of the wisdom of individual issues and fast money trading.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." --Henry Ford

DOW 16,072.54, +7.77 (+0.05%)
NASDAQ 3,994.57, +2.92 (+0.07%)
S&P 1,802.48, -2.28 (-0.13%)
10-Yr Note 100.10 +0.09 (+0.09%)
NASDAQ Volume 1.74 Bil
NYSE Volume 2.99 Bil
Combined NYSE & NASDAQ Advance - Decline: 2701-2954
Combined NYSE & NASDAQ New highs - New lows: 532-96
WTI crude oil: 94.09, -0.75
Gold: 1,241.20, -2.90
Silver: 19.88, +0.02
Corn: 431.25, +2.00

Friday, November 22, 2013

50 Years Ago and We Still Don't Know Why Kennedy Was Killed

Please, no matter what you may believe, instead of reading articles or watching videos, just contemplate the Kennedy assassination for a few moments.

Food for thought, presented without comment.

DOW 16,064.77, +54.78 (+0.34%)
NASDAQ 3,991.65, +22.49 (+0.57%)
S&P 1,804.76, +8.91 (+0.50%)
10-Yr Note 99.94, +0.72 (+0.73%)
Combined NYSE & NASDAQ Advance - Decline: 3500-2147
NASDAQ Volume 1.65 Bil
NYSE Volume 2.96 Bil
Combined NYSE & NASDAQ New highs - New lows: 461-76
WTI crude oil: 94.84, -0.60
Gold: 1,244.10, +0.50
Silver: 19.86, -0.072
Corn: 429.25, -0.25

Thursday, November 21, 2013

Stocks Pop on Bad News from Philly Fed

Well, bad news for the economy is apparently good news for Wall Street once again.

The Philadelphia Fed's Index of business activity in the Mid-Atlantic region slowed significantly, according to the report issued today, which showed the index falling from 19.8 in October, to 6.5 in November, a drop that exceeded even the most pessimistic estimates.

The consensus was for the index to come in with a reading of 15.0, but the number was well below that. The convoluted thinking dominating the financial world today must have seen this as yet another sign of slowing economic activity, making it next to impossible for the Federal Reserve to begin slowing its monthly bond purchases from their current $85 billion per month.

Stocks, which were already showing healthy gains before the 10:00 am ET release, chopped their way higher throughout the session, with the Dow Jones Industrials ending the day at an all-time closing high.

With an eroding base economy and billions of created-out-of-thin-air dollars flooding the coffers of the primary dealers via the Fed, the market pricing mechanism is as broken as it has ever been in the history of economics.

Fantasy accounting, assets marked to nothing or anything, and all the other central bank meddling and criminality undertaken by Wall Street and global banking interests will eventually find its way back into the real world. The result may not be to the liking of anybody.

DOW 16,009.99, +109.17 (+0.69%)
NASDAQ 3,969.15, +47.88 (+1.22%)
S&P 1,795.85, +14.48 (+0.81%)
10-Yr Note 99.65, +0.48 (+0.49%)
NASDAQ Volume 1.64 Bil.
NYSE Volume 3.25 Bil.
Combined NYSE & NASDAQ Advance - Decline: 4246-1420
Combined NYSE & NASDAQ New highs - New lows: 327-102
WTI crude oil: 95.44, +1.59
Gold: 1,243.60, -14.40
Silver: 19.93, -0.124
Corn: 429.50, +4.25

Wednesday, November 20, 2013

Stocks Fall After October Fed Minutes Released; Deflation Commences

Just in case anyone forgot that the only thing that matters in this market is Federal Reserve policy, the message was forcefully driven home precisely at 2:00 pm ET, when the minutes from the last FOMC meeting were released.

Within those arcane discussions of all things monetary were warnings from more than a few members that tapering bond purchases by the Fed might begin sooner rather than later. Accepted thinking had been that the Fed would not taper until March, though after today, analysts are suggesting that December - just two weeks away - might mark the beginning of the end of the Fed's bond-buying spree.

While the cutback in bond purchases monthly may only be a decrease of $10 to $15 billion of the current $85 billion, Wall Street money-grubbers were spooked as usual at the suggestion that money would be anything other than nearly free to borrow.

Today's action in stocks shows just how fragile the 4 1/2-year-plus market rally is and how quickly paper profits may vanish if the Fed doesn't keep the money-printing machine going pedal to the metal.

It's a ridiculous market made up of ridiculous valuations and propositions, that, without Herculean-like support from the central bank, could fall apart in days or weeks.

The Fed will no doubt taper, the only remaining questions are when and by how much. Whatever the decision shall be, markets will not like it one bit, and the general economy may suffer even more than it already has as Wall Street will no doubt throw a massive hissy fit.

When it's all done with, when the Fed stops buying bonds altogether (when will that be, 2065?), either stocks or the US dollar (and maybe both) will be worth a lot less than they are today.

Lunatic policies by the Fed will be followed in time by equally hilarious conclusions to those misguided policies. The results will be a catastrophe financial markets have never seen before.

What is either amusing or distressing is the reaction in precious metal markets, which fell in concert with stocks and bonds. If the markets are correct, Fed tapering will be a deflationary event with magnificent outcomes ahead.

In the long term, the Fed cannot taper back on bond purchases because they have succeeded in crowding out the few remaining participants over the past four years. Deflations and defaults will be the most likely results, though emerging markets will feel the pain much sooner and to a much greater degree than established economies, though no nation will be spared the death spiral of deflation.

Dow 15,900.82, -66.21 (0.41%)
Nasdaq 3,921.27, -10.28 (0.26%)
S&P 500 1,781.37, -6.50 (0.36%)
10-Yr Bond 2.79%, +0.08
NYSE Volume 3,094,246,250
Nasdaq Volume 1,686,541,875
Combined NYSE & NASDAQ Advance - Decline: 2180-3428
Combined NYSE & NASDAQ New highs - New lows: 162-98
WTI crude oil: 93.33, -0.01
Gold: 1,258.00, -15.50
Silver: 20.06, 0.276
Corn: 425.25, -1.00

Tuesday, November 19, 2013

Another Dead Day on Wall Street

Stocks simply don't seem to have any momentum, such as earnings season is pretty much over and the gala holiday shopping season is still more than a week away.

There's no catalyst in either direction, though there's the continuing, nagging questions surrounding Fed tapering and the impact of Obamacare on business and markets, both of which seem to be supplying an anchor for equities.

Few voices are calling for a correction, but even fewer are banging the table about a generalized rally in stocks, as they are perceived to be just about fairly priced or over-priced.

This is an odd circumstance, as November is usually one of the better months for investors, though one could argue that gains in stocks this year have already beaten even the most optimistic targets.

Dow 15,967.03, -8.99 (0.06%)
Nasdaq 3,931.55, -17.51 (0.44%)
S&P 500 1,787.87, -3.66 (0.20%)
10-Yr Bond 2.71%, +0.03
NYSE Volume 3,199,620,250
Nasdaq Volume 1,714,876,375
Combined NYSE & NASDAQ Advance - Decline: 1903-3715
Combined NYSE & NASDAQ New highs - New lows: 162-78
WTI crude oil: 93.34, +0.31
Gold: 1,273.50, +1.20
Silver: 20.33, +0.023
Corn: 426.25, +5.25

Monday, November 18, 2013

Stocks Drop on Carl Icahn Comments?

So, is Carl Icahn the modern-day version of legendary investor J.P. Morgan, upon whose words - as legend has it - hung the fate of stocks and the economy?

Doubtful. Icahn may have a high opinion of himself, but he's probably not as influential as the TV-commercial version of E.F. Hutton, the company which used the tag line, "When E.F. Hutton talks, people listen."

Whatever the case, after Icahn made remarks at an investment conference today, saying he was "very cautious," stocks took an immediate nosedive, sending the Dow into negative territory after gaining as many as 68 points earlier in the session.

More likely, Icahn was the scapegoat du jour, giving cover to a well-planned exit by heavy holders in kay equities.

Markets don't need excuses to move one way or the other, or even to do nothing, but, in the age of instant communications, instant causation is expected, though it is almost never on the mark.

Icahn is no financial genius. Anyone with two eyes can see that stocks are priced nearly to perfection and ripe for a correction, though guessing ahead on that assumption, as has been well-learned over the past five years, can be a costly maneuver.

Stocks, as J.P. Morgan once said when pressed for direction, "will fluctuate."

And that's exactly what they did today.

Dow 15,976.02, +14.32 (0.09%)
Nasdaq 3,949.07, -36.90 (0.93%)
S&P 500 1,791.53, -6.65 (0.37%)
10-Yr Bond 2.68%, -0.03
NYSE Volume 3,152,413,250
Nasdaq Volume 1,793,143,750
Combined NYSE & NASDAQ Advance - Decline: 2127-3522
Combined NYSE & NASDAQ New highs - New lows: 496-45
WTI crude oil: 93.03, -0.81
Gold: 1,272.30, -15.10
Silver: 20.36, -0.41
Corn: 421.00, -9.50 (new low)

Thursday, November 14, 2013

New Record Highs for Dow, S&P on Yellen Lovve-Fest Hearings

Wall Street has shown its liking for incoming Fed Chairman Yellen, so the congress better damn well approve him.

Dow 15,876.22, +54.59 (0.35%)
S&P 500 1,790.62, +8.62 (0.48%)
Nasdaq, 3,972.74, +7.16 (0.18%)
10-Year Note 2.70, -0.02
Combined NYSE & NASDAQ Advance - Decline: 3205-2398
Combined NYSE & NASDAQ New highs - New lows: 423-63
WTI crude oil: 93.76, -0.12
Gold: 1,286.30, +17.90
Silver: 20.72, +0.28
Corn: 426.50, -3.25

Wednesday, November 13, 2013

Stocks Rock; Yellen Ready to Kiss Up to Congress

Nice gains for the Dow and S&P, which both set new all-time high closes. The party won't stop, according to sources close to Mr. Yellen, who is expected to convince congress that the Fed needs to continue manipulating markets and driving the purchasing power of the dollar into oblivion with even more intervention and easy money policies.

Life , for working Americans, could be wonderful if the Fed can figure out how to induce any kind of wage inflation.

We are a hopeful nation.

Dow 15,821.63, +70.96 (0.45%)
S&P 1,782.00, +14.31 (0.81%)
Nasdaq 3,965.58, +45.66 (1.16%
10-Year Note: 2.68%, -0.05 (-1.83%)
NYSE Volume: 3,320,000
NASDAQ Volume: 1,769,363,821
Combined NYSE & NASDAQ Advance - Decline: 3777-1858
Combined NYSE & NASDAQ New highs - New lows: 323-93
WTI crude oil: 93.88, +0.84
Gold: 1,268.40, -2.80, -0.336
Silver: 429.75, -2.50

Monday, November 11, 2013

Stocks Little Changed on Veteran's Day

With bond markets closed and many traders enjoying a three-day weekend by virtue of the Veteran's Day holiday, there was little to get excited about in equity markets or elsewhere.

The day's smallish gains were led by Consumer Cyclicals, Healthcare and Technology, counterbalanced by downside moves in Basic Materials and Telecoms, which lagged the market.

Volume was noticeably in short supply as was volatility, reverting back to levels seen this past summer. Despite the lack of interest, the Dow Jones Industrial Average closed at a new all-time high, with the NASDAQ and S&P sporting smaller gains.

New highs continued to outnumber new lows, though not as substantially as in recent weeks. The advance-decline line was nearly static, with winners beating losers by less than a hundred issues.

Commodities were largely flat-lining, though corn got a bit of a bid off recent 52-week lows.

Unless there's some earth-shaking development on Tuesday, tomorrow could be just as listless, as there are no meaningful economic data releases until Wednesday, and even then, those are hardly impacting.

Dow 15,783.10, +21.32 (0.14%)
Nasdaq 3,919.79, +1.67 (0.04%)
S&P 500 1,771.89, +1.28 (0.07%)
10-Yr Bond 2.75% 0.00
NYSE Volume 2,507,799,000
Nasdaq Volume 1,538,911,625
Combined NYSE & NASDAQ Advance - Decline: 2840-2754
Combined NYSE & NASDAQ New highs - New lows: 238-56
WTI crude oil: 95.14, +0.54
Gold: 1,281.10, -3.50
Silver: 21.28, -0.035
Corn: 434.75, +8.00

Friday, November 8, 2013

Green Arrows for Stocks as Non-Farm Payrolls Surprise

As the work-week ended, everything was up, except, of course, gold and silver, because we just can't have those ancient relics of real money ruining the fiat-fest currently underway.

After the government reported October non-farm payrolls up a shocking 204,000 in October and revised August and September reports upward as well, futures slid, in sympathy with the idea that the Fed would - due to the "strong" jobs figure - reconsider its $85 billion-a-month bond-buying binge and begin to taper such efforts.

However, once the markets opened, good news was once again good news, and stocks staged a massive rally, erasing all of the prior day's losses on the major indices, sending the Dow Industrials to another record close.

Mortgage rates rocketed higher on the news, as did treasuries, the 10-year note ripping upward by 13 bips.

The logic may be a bit twisted - then again, what, concerning Wall Street and our current "crisis management" economy isn't? - but here's the take: Sure, the effects of the government shutdown the first two weeks of October were minimized, and the economy was creating jobs, but the unemployment rate actually rose - from 7.2 to 7.3% - due to a decline in the labor force participation rate, which has steadily trended downward for the past decade, making what looked, on the surface, as good news, actually bad news for the economy, which is good news for stocks because the Fed will just keep buying up treasuries and MBS, sloshing even more cheap money into the already liquidity-bloated system.

As usual, bankers and their kindred traders, hedgies and speculators were the main beneficiaries, after selling yesterday on a move that suggests the payroll data was privately leaked, were able to buy on the cheap Friday morning.

That's about the only analysis that makes any sense, though rational, logical arguments aren't always adequate predictors of market economics and trading patterns.

The guys with the inside scoop always do better than Mr. and Mrs. Average Joe and Jane. And they do it every day, whether the market is up or down, because they own the data.

Dow 15,761.78, +167.80 (1.08%)
Nasdaq 3,919.23, +61.90 (1.60%)
S&P 500 1,770.61, +23.46 (1.34%)
10-Yr Bond 2.75%, +0.13
NYSE Volume 3,770,251,500
Nasdaq Volume 1,934,757,875
Combined NYSE & NASDAQ Advance - Decline: 3706-1971
Combined NYSE & NASDAQ New highs - New lows: 231-99
WTI crude oil: 94.60, +0.40
Gold: 1,284.60, -23.90
Silver: 21.32, -0.34
Corn: 426.75, +6.25

Thursday, November 7, 2013

Wall Street Pouts Despite Twitter IPO; Jobs Data on Deck

Busy day today for the gods of greed, buyers of bluster, falcons of fraud, purveyors of prevarication.

Wall Street was all a-twitter over the IPO of Twitter (TWTR), the latest Web 2.0 mega-fad company gone public, which opened today on the NYSE with a bang. The stock was issued at 26, but opened at 44, quickly ramped up above 50 per share and closed at 44.90, good for a 78% gain. The company - based on "tweets" of 140 characters - is valued at about 29 times sales, pretty rich, especially for a enterprise that's still losing money. Well, at least the founders are now billionaires... on paper.

Prior to the opening bell, there was a flurry of activity from across the Atlantic pond, as Europe's Mario Draghi, ECB president extraordinaire, announced key rate cuts of 25 basis points, leaving the base rate at .25 and the key lending rate at .50. Observers in America wondered what took the Euros so long, though one must consider that they have been in the business of wrecking their own economies and fleecing the public a lot longer than their American counterparts, so they can kick the old can-can a lot longer and down an even shorter road without causing much of a stir.

The response from traders across the continent and in the UK was resoundingly mixed, with the German DAX higher, Britain's FTSE lower and the French CAC-40 barely changed. Don't these people understand the concept of cheap money? Pikers, the lot of them, except, of course, for the stodgy, stingy, and oh-so-proper Germans.

At 8:30 am ET, the US blasted off a couple of economic indicators, releasing the first reading on third quarter GDP at a robust 2.8%, a ribald lie if ever there was one, but enough to scare the few remaining hairs off the head of Lloyd Blankfien and others of his balding ilk. Good news is once again bad news, it appears, and any growth approaching three percent in the US sends shivers up the spineless bankers' backs, because they believe their buddies, Mr. Bernanke and the incoming Mr. Yellen, may cease the easy money programs that has catapulted every dishonest banker into ever-higher tax brackets.

The most recent initial unemployment claims - which were down 9,000 from the previous week, at 336,000, remained stubbornly high, though apparently not quite high enough for the barons of buyouts. These dopes saw this as another sign of a strengthening US economy, so, shortly after the opening bell, stocks did an abrupt about-face and trended lower throughout the session, with little respite.

In other news, Goldman Sachs is under investigation for rigging foreign exchange (FOREX) trading and just about everything else they do, and, yesterday, the Blackstone Group began pitching its rent-backed securities.

Really. They did. And some people actually bought them.

The advance-decline line cratered, with losers leading gainers by a 7:2 ratio, and new lows continue to close the gap on daily new highs, a trend metric that may just flip over if today's losses are indeed presaging something un-funny about tomorrow's delayed October non-farm jobs data, due out an hour before the opening bell. The way to read this is that the government is likely to report that something in the range of 120-150,000 new jobs were created during the month, which would be more proof of economic improvement, exactly what the market doesn't want. Either that, or it's going to be a real stink-bomb, because the forecast is only for 100,000.

Business as usual, my friends. Monkey business, that is.

Dow 15,593.98, -152.90 (0.97%)
Nasdaq 3,857.33, -74.61 (1.90%)
S&P 500 1,747.15, -23.34 (1.32%)
10-Yr Bond 2.61%, -0.03
NYSE Volume 4,092,416,000
Nasdaq Volume 2,196,542,750
Combined NYSE & NASDAQ Advance - Decline: 1276-4371
Combined NYSE & NASDAQ New highs - New lows: 197-101
WTI crude oil: 94.20, -0.60
Gold: 1,308.50, -9.30
Silver: 21.66, -0.111
Corn: 420.50, -0.75

Wednesday, November 6, 2013

Wall Street Weirdness as Dow Makes New Record, NASDAQ Falls

Maybe it's the weather, but investor taste for speculation may be turning, just a day before the hoopla over the Twitter IPO is set to take place. The 142-character internet darling will open tomorrow at a very overpriced $27-30 per share. It could be that some big players in the tech investing (gambling) space just freed up money to get into the hottest IPO since... um, Facebook, though the memory of that magnificent failure is still fresh.

Still, winners just barely edged losers on the day, while the place to be in Dow stocks was in Chevron (CVX), IBM (IBM) and Microsoft (MSFT), an odd grouping there.

The MBA Mortgage Index slumped sadly prior to the open, with weekly applications off seven percent, even as 30-year rates fell to 4.32%.

Crude inventories showed only a modest uptick, which helped oil stage a rally off of five-month lows.

With bond yields settling lower, gold and silver up moderately, it was very tough to get a read on the overall market. Corn made fresh 52-week lows, which is bearish for beef, but bullish for carnivores in general, with beef prices stable and possibly set to decline. Overall, however, falling corn prices is about as good a deflation indicator as one can find, especially priced in silver.

Steady as she goes, though, especially on those safety plays in the Dow, which should consider to out-perform in a flight to dividend comfort.

Tweet that.

Dow 15,746.88, +128.66 (0.82%)
Nasdaq 3,931.95, -7.92 (0.20%)
S&P 500 1,770.49, +7.52 (0.43%)
10-Yr Bond 2.64%, -0.02
NYSE Volume 3,298,818,000
Nasdaq Volume 1,989,898,000
Combined NYSE & NASDAQ Advance - Decline: 2851-2753
Combined NYSE & NASDAQ New highs - New lows: 317-79
WTI crude oil: 94.80, +1.43
Gold: 1,317.80, +9.70
Silver: 21.77, +0.132
Corn: 421.25, -3.75

Tuesday, November 5, 2013

Stocks Split in Sloppy Session; Bond Yields Rising, Oil Sliding

Stocks slid at the opening bell, with the Dow down by as many as 117 points in the first half hour of trading, but quickly reversed direction at 10:00 am EST and continued a slow but steady gain the rest of the day.

Apparently, what turned stocks around was the October ISM Services reading, which came in at a solid 55.4, a full pint better than last month's data and a huge beat to the expected 54.0.

While questions concerning the veracity of these kinds of reports after the unusually-strong Chicago PMI data a week ago continue to swirl around, the beat on services - which is now the main production engine of the US, since we've hollowed out our manufacturing core and mostly export inflation - was enough for the Wall Street crowd to lift stocks off their lows.

That they were able to keep buying interest maintained for the remainder of the session was likely due to the usual POMO injection by the Fed, allowing for rampant speculation and unusually-high leverage.

While stocks were seeing the light of day - though the NASDAQ never quite made it into positive territory, bonds were getting slammed, up six bips in yield by the end of the day, as the gains following the end of the government shutdown are gradually being eroded. The closing level of 2.66% on the 10-year note was the highest in two-and-a-half weeks.

The big story happens to be in oil, which continues its retreat from $110/barrel highs just two months ago. Another $5.00 drop in the price of WTI will put oil into a bear market, a condition nobody has considered. While low oil prices relate positively to gas at the pump and is a boost for the economy, releasing more purchasing power, the underlying causes may be more nefarious and significant.

There is, at last, a supply-demand condition that is positive for the US, as more and more oil is being produced in North America, at the same time that demand is dwindling, or rather, has been dwindling for the past three to four years. Americans have tightened their collective belts and are much more careful about their driving habits these days, as lowered incomes have left less for transportation expenses. High unemployment also pays a part, as fewer people are driving to work five or six days a week.

So, while a period of lower gas prices is cause for celebration, the party may not be of the epic variety, with fewer participants and an overhang of disappointing economic circumstances.

Key numbers to watch tomorrow will be the MBA Mortgage Index (7:00 am), September Leading Indicators (10:00 am) and crude inventories (10:30 am).

Dow 15,618.22, -20.90 (0.13%)
Nasdaq 3,939.86, +3.27 (0.08%)
S&P 500 1,762.97, -4.96 (0.28%)
10-Yr Bond 2.66%, +0.06
NYSE Volume 3,485,473,500
Nasdaq Volume 1,899,388,750
Combined NYSE & NASDAQ Advance - Decline: 2064-3571
Combined NYSE & NASDAQ New highs - New lows: 248-74
WTI crude oil: 93.37, -1.25
Gold: 1,308.10, -6.60
Silver: 21.64, 0.064
Corn: 425.00, -1.25