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

Fed Keeps QE at Full Throttle, Stocks, Markets Still Unhappy; ADP Misses

In September, when everybody thought the Fed was going to announce a scaling-back of their $85 billion-a-month bond buying bonanza, stocks rallied when they did nothing.

Today, when the Fed did exactly what the market expected, keeping the bond buying going full force with no mention of "tapering," stocks sold off, extending a decline that started in slow motion shortly after the opening bell.

It's probably asking too much to try and comprehend exactly what the algos or stock pickers were reading in the FOMC tea leaves, because a commitment by the Fed to continue easy money policies is exactly the best reason for equities to rise. Chalk it up to profit-taking by the slickest of the slick, on an old, "buy the rumor, sell the news" scenario.

As we've stated recently, stocks should continue to rise through the end of the year and beyond, being that there are now some unwritten rules in the market that say stocks can't decline during the Christmas season, there must be a "Santa Claus Rally" and a "New Year Rally."

So, despite this little blip of a disturbance in the force, investors should be good to go unless something really awful happens, like the economy suddenly shows unequivocal signs of strengthening.

OK, OK, stop the laughter. we all know that the economy is stuck in neutral since the Fed programs of QE and ZIRP are only beneficial to the top 1% of earners, those people you and I will never get to know personally, and that the government is going to do everything in its powers to see to it that the economy stumbles along at about 1.5-2.0% GDP growth, just enough to keep the recession dogs off the porch.

Investors and markets will digest today's losses and decide, around midnight tonight, that tomorrow morning would be a great time to add to their positions or open new ones in some of the more speculative, momentum stocks. That's really the mantra and it doesn't get any simpler.

In case nobody noticed, the October ADP jobs report showed that employment continued its gradual slowdown, adding just 130,000 net new private sector jobs - and revised September's 166,000 gain down to 145,000 - all blamed conveniently on the 16-day government shutdown earlier this month. Never mind that these are PRIVATE sector jobs and government is in the PUBLIC sector. Whatever scapegoat is available, that's the one that gets the blame.

As this missive is being prepared for publication, the president is pleading with less-than-enthusiastic supporters that the Affordable Care Act (ACA, or, ObamaCare) is going to work and actually good for America, despite all indications to the contrary.

You have officially entered the bizarro-zone and there is no escape if you keep watching the teevee.

Buy stocks. Can't miss.

Dow 15,618.76, -61.59 (0.39%)
Nasdaq 3,930.62, -21.72 (0.55%)
S&P 500 1,763.31, -8.64 (0.49%)
10-Yr Bond 2.53%, +0.02
NYSE Volume 3,486,428,250
Nasdaq Volume 1,795,014,125
Combined NYSE & NASDAQ Advance - Decline: 1596-4053
Combined NYSE & NASDAQ New highs - New lows: 487-42
WTI crude oil: 96.77, -1.43
Gold: 1,349.30, +3.80
Silver: 22.98, +0.491
Corn: 430.25, -1.75 (new 52-week low)

Stocks Get Sent on Wild Ride by ADP, FOMC

The Wall Street Casino is a dangerous place to play with money. One would have at least as good a chance f
"winning" at any of the establishments lining the Las Vegas Strip. At least there, high rollers play by the same rules, with the same odds. It's not that way at all on Wall Street, where the chances of stocks, bonds or entire indices are likely predetermined and those deemed "too big to fail" win all the time, mostly at the expense of other players.

Today's excursion into madness began with the release of ADP employment data for July, which showed a gain of 200,000 jobs in the month. Stocks started slowly, but by 10:30 am EDT - just an hour into the trading day - the Dow Jones Industrials were up by 114 points, and that was the high of the day.

With the Fed's FOMC announcement looming at 2:00 pm EDT, the slide back close to unchanged was obvious, the Dow slipping into the red shortly after the Fed announced it was doing nothing, for now, giving no indication of whether it intends to roll back its $85 billion in monthly bond purchases, which many analysts were predicting would begin in September.

The Dow zoomed back up to nearly an 80-point gain by 3:00 pm EDT, but then the selling resumed, taking into negative ground again just prior to the close. The S&P closed fractionally lower, though the NYSE Composite and NASDAQ ended the day in positive territory.

This summer's stock market is about as normal and predictable as a 14-year-old. There's no telling what may happen next, as good news is interpreted as good sometimes and bad others, and vice versa with bad news.

What's certain is that fundamentals don't matter at all and that's a dangerous place to invest, if that's what one wants to call it. Money is safer in one's pocket or lent to a neighbor or friend, even if they are poor risks. On a daily basis, the rug gets pulled out at some point, for some traders.

Best bet is to make sure you're not standing on it.

Dow 15,499.54, -21.05 (0.14%)
NASDAQ 3,626.37, +9.90 (0.27%)
S&P 500 1,685.73, -0.23 (0.01%)
NYSE Composite 9,558.81, +2.64 (0.03%)
NASDAQ Volume 1,870,515,500
NYSE Volume 4,183,349,250
Combined NYSE & NASDAQ Advance - Decline: 3425-3078
Combined NYSE & NASDAQ New highs - New lows: 389-92
WTI crude oil: 105.03, +1.95
Gold: 1,312.40, -11.60
Silver: 19.63, -0.052

Turn-Around Tuesday: Stocks Gain Early, Finish Red

There isn't really much to this stock story. The Bulls and Bears went to the wall today and guess what?

The Bears won.

It's a holiday-shortened week, loaded with economic data, not the least of which are tomorrow's ADP June employment report and Friday's BLS Non-Farm payroll issue. Turmoil in Egypt is causing consternation and earnings releases are right around the corner.

For the short-timers, the payroll data is paramount, but the trend keeps biasing to the downside. It's mid-summer, stocks are expected to report weaker earnings, all the while the US dollar is gaining against almost all other currencies as the cleanest shirt in the laundry bin.

Lots of headwinds and most astute players have already established positions. The only matter may be how far down stocks must dive to flush out the more-hardened holders.

Even though tomorrow is a short session, closing at 1:00 pm EDT, there should be fireworks ahead. Keep a close eye on the 14,850 level on the Dow as key support.

Dow 14,932.41, -42.55 (0.28%)
NASDAQ 3,433.40, -1.09 (0.03%)
S&P 500 1,614.08, -0.88 (0.05%)
NYSE Composite 9,144.59, -23.30 (0.25%)
NASDAQ Volume 1,645,609,250
NYSE Volume 3,621,029,000
Combined NYSE & NASDAQ Advance - Decline: 2778-3734
Combined NYSE & NASDAQ New highs - New lows: 301-48
WTI crude oil: 99.60, +1.61
Gold: 1,243.40, -12.30
Silver: 19.31, -0.269

Stocks Clipped; Maybe Bad News isn't So Good After All

This was a bit of a shakeout. There was no late rally to save the day, nor was there - oddly enough - any talk of tapering by Fed officials.

No, today was just one of those days that the market had a good look in the mirror and didn't like what it was seeing. Smart money is already out of the equity markets, but the dumb money will probably be looking to buy the dip, as has been the modus operandi for the past four-years.

It was mentioned here yesterday that this appeared to be an opportune time to go to cash or go short. That call could not have been more prescient as stocks fell out of bed and continued to roll on the floor, writhing in pain the rest of the session, having the worst two days since mid-April, which, considering where the market has traversed since then, could be only the beginning of a long, deep decline.

Marketeers will blame today's selloff on poor ADP numbers and maybe the ISM Services index, both coming in with disappointing reports, but data has been trending poorly for the past two months (some say four years) and the market is just now beginning to wake up to the reality of the depression being felt across the country and around the world. Business activity has slowed in almost every sector or has not grown at any kind of solid, sustained pace for most of the past six months, all the while equities were going through the roof.

If this is the beginning of a serious correction or the end of the bull and the beginning of a bear market, today and yesterday's action was just a warm-up.

Wall Street may be blind to poor economic data for a long time, but when the selling starts and there's real money to be lost, the traders all act like herd animals, rushing for the quickest way out.

Even though volume was not magnificent, the declines speak for themselves. The Dow Jones Industrials took a 1 1/2 percent hit today and are now three percent from the top, made on May 28.

The A-D line continues to deteriorate, with today's coming in a 4-1 for the losers; new lows exceeded new highs for the first time in months. Keep an eye on that metric for more clues to where this is going.

A June swoon or a hungry bear?

Dow 14,960.59, -216.95 (1.43%)
NASDAQ 3,401.48, -43.78 (1.27%)
S&P 500 1,608.90, -22.48 (1.38%)
NYSE Composite 9,189.21, -130.88 (1.40%)
NASDAQ Volume 1,728,689,625
NYSE Volume 3,620,423,750
Combined NYSE & NASDAQ Advance - Decline: 1369-5151
Combined NYSE & NASDAQ New highs - New lows: 69-108
WTI crude oil: 93.74, +0.43
Gold: 1,398.50, +1.30
Silver: 22.47, +0.063

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

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

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

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

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

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

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

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

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

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

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

Kind of says it all, doesn't it?

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

Trepidacious Trading in Uncertain market Environment

On a day in which most of the economic news was positive - or, could have been considered in that regard - the palpable fear that engulfed Wall Street was nothing short of astonishing.

Even though the People's Bank of China (PBOC) cut interest rates, along with the ECB, and the Bank of England announced a boost in their own version of quantitative easing, adding 50 billion pounds to their asset purchase program, stocks could not get out of their own way throughout a tense, thinly-traded, anxious session.

US data was mixed. The ADP private employment index registered a gain of 179,000 jobs in June, blowing away estimates of a gain of 105,000, but ISM Services declined from 53.7 in May to 52.1 in June, the lowest reading since January of 2010.

Must of the angst appears focused on Friday's non-farm payroll report from the BLS, which is expected to show job growth in June for the US of 100,000 net new jobs. Following May's poor showing of a mere 69,000 new jobs, investors were rightly skeptical of the ADP number, which last month showed a gain of 136,000 jobs, so the consensus is that ADP's figures are skewed to the upside by 50,000, at a minimum.

With the major indices trading at, or close to, their highest levels since the end of May, investors exercised caution ahead of tomorrow's potentially-volatile non-farm payroll number.

The odd occurrence of stocks actually slumping when central banks cut interest rates or offer looser standards is confounding and possibly a signal that the current short-term rally is close to completion. Stocks are trading at levels closer to the highs seen at the beginning of May than the lows experienced at the end of May.

Also adding to the general state of confusion is the advent of second quarter earnings, which will begin to come to market next week. There may be some thinking that this earnings season will not be as robust as prior ones, even though estimates have been lowered for many firms.

There's also the nagging feeling that nothing is really solved in Europe and in America, no meaningful legislative action will be taken with the presidential and congressional elections taking place within four months.

The market is very uneasy at present, and yesterday's - and today's - extreme reading of new highs to new lows may have signaled to some an interim market top.

Of course, everything hinges on tomorrow's jobs' data, which will be released prior to the opening bell, at 8:30 am EDT.

Dow 12,896.67, -47.15 (0.36%)
NASDAQ 2,976.12, +0.04 (0.00%)
S&P 500 1,367.58, -6.44 (0.47%)
NYSE Composite 7,838.39, -63.27 (0.80%)
NASDAQ Volume 1,326,294,125
NYSE Volume 2,925,787,750
Combined NYSE & NASDAQ Advance - Decline: 2494-3070
Combined NYSE & NASDAQ New highs - New lows: 385-22
WTI crude oil: 87.22, -0.44
Gold: 1,609.40, -12.40
Silver: 27.67, -0.61

Reality Bites: Stock Charts Hit with Deflation Ugly Stick

One look at any of today's major index charts - or European charts, for that matter - tells the real story of the world economy and the overall effects of globalization, fiat money and constant Keynesian-modeled tinkering.

Down at the open and no chance of a rally at any point was the order of the day. Markets were completely flattened following Tuesday's slap-happy, bogus insider ramp job. With any luck, the same traders and rich, brassy speculators who made a few ducats on the way up yesterday are upside-down today.

While US markets were royally screwed, European bourses were overwhelmingly slammed to earth, with the major indices whacked more than 1.75%, led downward by the CAC 40, smashed a whopping 2.24% as the EUR/USD sank below 1.24 on its inexorable path to parity and then, extinction.

All indications from not just today's trade, but the overall tenor of markets since the end of April, are that Europe's crisis is not going to be solved easily, if at all. There's no hiding from the big stick of deflation, no crying in a deflationary spiral, except by the weak and unprepared, who deserve nothing but woe, destitution and poverty. May they take all of the major banking interests with them.

The carnage was unavoidable. The US 10-year note fell to an historic low yield of 1.62%, which, along with the German Bund, is headed for negative returns.

Whether or not this is coordinated end-game by the world's central bankers and our own small-minded Ben Bernanke, the siren's cry of lower prices has been heard loud and clear. By the end of fall or sooner, the entire charade should be over, for all intents and purposes. Adam Smith's invisible hand has given globalists the undeniable back-slap one receives for overindulgence, malinvestment and outright economic stupidity.

The pseudo-rally from the depths of 2008-09 is officially defunct and all that's left is picking up the pieces when everything crashes to the floor before falling into the abyss. It's almost as if the ancient tradition of the jubilee - in which all debts are forgiven - has been secretly woven into the fabric of modern economics. The crush of unpaid obligations will affect rich and poor alike. Only those with investments in useful machinery, arable land, real estate and precious metals will be spared, though their lot will no doubt be a difficult one.

Ordinary working class folk should be cheering the downfall of the tyrannical central banking regime, though anyone relying on pensions for retirement cushion should have already begun reordering their priorities. The last three-and-a-half years have been nothing more than a chance to prepare for the ultimate collapse of the global banking and sovereign state cabal and their over-leveraged, inflationist, dangerous, deadly ideas.

Resistance is futile against the wicked spiral of deflation, as it carries the weight of the world down with it, as derivatives are unwound and the banking and finance system breaks down. The worry is that governments will impose iron-fisted regimes and police states to quell the disquiet populace once the rioting begins, and it will, sure as day follows night.

As stocks tumbled, precious metals strengthened today, a significant development not seen in recent months and a trend almost certain to continue. Oil's drop continues and a plunge below $90/barrel today was an event long overdue. The world is absolutely glutted with the stuff as demand continues to plunge. Everything will be - or should be - cheaper as 2012 unfolds further.

The chaos should only worsen in this shortened week as the culmination is Friday's sure to be horrific non-farm payroll report. Tomorrow will afford an early sneak preview as ADT releases their private payroll data for May and hour and a quarter prior to the ringing of the bell at the Wall Street loser's casino. Additionally, Thursday will be heavy with data, with Challenger job cuts, initial unemployment claims and the second GDP estimate all due prior to US market opening. It should almost surely worsen from there forward with Chicago PNI and crude inventories guiding early-day trading.

It would require nothing short of divine intervention or an alien landing for the remainder of the week to be nothing short of a bloodbath.

Free houses for everyone! At least for those who need shelter and have a creative mind and two good hands with which to rebuild, that is.

Dow 12,419.86, -160.83 (1.28%)
NASDAQ 2,837.36, -33.63 (1.17%)
S&P 500 1,313.32, -19.10 (1.43%)
NYSE Composite 7,476.36, -138.68 (1.82%)
NASDAQ Volume 1,629,529,250
NYSE Volume 3,441,592,750
Combined NYSE & NASDAQ Advance - Decline: 1011-4774
Combined NYSE & NASDAQ New highs - New lows: 42-134
WTI crude oil: 87.82, -2.94
Gold: 1,563.40, +14.70
Silver: 27.98, +0.19

Bad Data Continues to Be Ignored by Equity Investors

In the continuing saga of the "recovery which refuses to jibe with reality," some data points delivered this morning shook things up for a while, though the declines were hardly notable.

Well before the opening bell, the monthly ADP Employment Report, which measure the change in private payrolls, came in well below expectations of 170,000, printing at a mediocre 119,000 for April. The survey, which serves as a precursor to the monthly BLS non-farm payroll report (due Friday) is forecasting a poor showing from the government's "official" report. As it is, the forecast for 162,000 net new jobs is just barely enough to keep pace with new entrants to the labor force (roughly 125,000), so any number below that on Friday will be a major blow to the proponents of sustained recovery.

Whether investors (or the machines actually doing 84% of the trades these days) will pay any heed is doubtful, though after April's sub-par showing, stocks put in their worst month in the past seven, so maybe somebody is paying attention to facts instead of relying on instinct and animal spirits.

At 10:00 am, March factory orders were announced at -1.5%, though expectations were for worse data, -1.8%, so this actually could have been seen as a win for equity participants (or their muppet clients).

Adding to the absurdity of economic data, another official figure showed oil stockpiles increasing by 2.840 million barrels, after last week's rise of 3.978 million. That data took oil prices lower by a mere 94 cents, though the price of a barrel of light, sweet crude continues to hover near 12-month highs, despite continuing slack demand. Chalk it up to corporate greed, excessive speculation and a Washington crowd that simply cannot afford to upset one of its main donor groups by actually clamping down on absurdly high prices at the pump.

In effect, the lower and middle classes of Americans now pay an additional tax in the form of these higher fuel prices, all the while oil drilling and recovery continues to be robust in North America. Perhaps the biggest insult to the American people is that oil currently being drilled in North Dakota and elsewhere in the states will more than likely be shipped abroad, where the oil cartel can fetch even higher prices.

So much for all the talk of energy independence and security. The empty suits in the nation's capitol don't deserve even a single vote in this November's elections, though a large number of Americans, stuck in their narrow world of cognitive dissonance with a healthy dose of normalcy bias, still believe in the two-party lie and will cast their votes for the lesser evil this fall, as if their individual votes actually counted (Hint: since 2000 they haven't.).

Days like today are tough on financial reporters, especially those who toe the official media line that all is well and things are getting better, when the evidence - and most public opinion polls - clearly displays the opposite. For those of us who like our facts served cold without garnishments, the temptation to break things or convulse in a spasm of disbelief is hardly bearable.

Come Friday, when the April non-farm reveals a bit more of the truth (though one can count on the BLS and their various fudging mechanisms to completely distort any data they can), perhaps the markets will begin to reflect what's really going in America: the complete and utter annihilation of the middle class and the remaining civil rights that haven't already been denied or abused by an oligarch government that's been off the rails for more than a decade.

Maybe, some day, when fewer than half the registered voters show up in the fall, the ruling class will get a hint that their reigns of power are not derived from the electorate, though it's doubtful they will even care.

Dow 13,268.57, -10.75 (0.08%)
NASDAQ 3,059.85, +9.41 (0.31%)
S&P 500 1,402.31, -3.51 (0.25%)
NYSE Composite 8,124.32, -39.71 (0.49%)
NASDAQ Volume 1,832,346,375
NYSE Volume 3,784,334,250
Combined NYSE & NASDAQ Advance - Decline: 2707-2890
Combined NYSE & NASDAQ New highs - New lows: 187-66
WTI crude oil: 105.22, -0.94
Gold: 1,654.00, -8.40
Silver: 30.64, -0.29

Who Goosed the Stock Market? The PPT Did, That's Who

The more one endeavors to make sense of the movements of the major equity indices, the more one becomes convinced that there is major manipulation going on behind the scenes and today was just another prime example to throw into the conspiracy hopper.

While the Dow gained 78 points today, all of the gains were produced in roughly a one hour period, from 10:30 am to 11:30 am ET, on extremely light volume. The Dow moved from barely unchanged (12,760) to a gain of nearly eighty points (12,340), which just so happened to be roughly where it closed.

Did Greece's private debt holders agree to a deal at that hour? No.

Did ADP report a gain of 216,000 net private job gains for February. Sorry, that happened at 8:15 am, and the response was pretty muted.

So... let's see. Low volume (if today wasn't the lowest volume of the year, it was certainly close), stocks sliding back near unchanged right after a major selloff the previous session... like the calvary riding to the rescue in a cliche old time Western movie, the PPT - otherwise known as the Plunge Protection Team and officially known as the President's Working Group on Financial Markets has been hard at work ever since 1988, keeping US stock indices safe from free-falling collapses and lately, from even slight declines that might make the markets appear to be as weak as they really are and boosting stock prices when the trading activity all but dries up.

While Joe and Jane Sixpack reads just the headlines and understands nothing except, "honey, our retirement pension fund is up again!" out in the real world its endless money printing and insider stock manipulations that keep the American Dream alive and well.

It's become so blatant and obvious that it is rarely commented upon by even the most suspicious bloggers and underground financial writers. The mainstream press never mentions that the PPT has offices right in New York's financial district - the easier to send orders flying into the fray - or that said offices are owned by the NY Fed.

So, forget everything you just read and move along. You are not supposed to think, analyze or ask any questions. There's nothing to see here, or at least nothing you're supposed to see. In ten seconds your computer will automatically destroy this posting, and your brain will be wiped clean of the heretical commentary presented.

9...8...7...6...

Dow 12,837.33, +78.18 (0.61%)
NASDAQ 2,935.69, +25.37 (0.87%)
S&P 500 1,352.63, +9.27 (0.69%)
NYSE Composite 7,979.83, +59.69 (0.75%)
NASDAQ Volume 1,560,044,000
NYSE Volume 3,515,704,500
Combined NYSE & NASDAQ Advance - Decline: 4287-1316
Combined NYSE & NASDAQ New highs - New lows: 93-43
WTI crude oil: 106.16, +1.46
Gold: 1,683.90, +11.80
Silver: 33.58, +0.80

February Opens with Expected Rally, but the Sizzle Fizzles

Hooray!

Nothing like another gap up at the open and a fizzled rally on the first day of the month.

With all the players flush with cash following the best January since 1997 (shows how horrible the market has been over the past 15 years), there had to be someplace to put all that money to work. Bingo! Let's buy some stocks!

But, let's not get carried away, like last month, when the gains on the first trading day of the month (January 3) was about 2/5ths of the gains for the entire month and after options expiration on Friday, January 20, stocks stalled, ending the month three points lower from that date on the S&P and 87 points lower on the Dow.

The possible excuses catalysts for the meteoric rise at the open and through the early afternoon were various, but hardly worth the triple-digit gains on the Dow (up 151 points at the peak), including the excitement over the imminent IPO of Facebook, the ADP Employment Change (showing 170,000 new private sector jobs in January, below consensus), the 54.1 read on the ISM index (also below expectations) or the "any day now" word from Europe on the Greek debt deal.

No, it was just those crazy Wall Street guys with cash on hand and time to waste that led to the "giddy-up" on the first day of February. Perhaps April Fool's Day was bumped up a couple of months.

What killed the rally was day-trading, as usual, as the smartest guys got the heck out of the way, before American Airlines (AMR) announced that it would lay off 13,000 workers, their pension plans to be likely administered by the Pension Benefit Guaranty Corporation (PBGC), otherwise known as the federal government, AKA, me, you and the rest of working Americans, something that was discussed on this very blog about six years ago.

Yep, this was a swell rally, even though it only lasted about four hours. Prepare for tomorrow's gap down at the open and Friday's slaughter when non-farm payrolls reveal that the birth-death model accounted for about 300,000 phantom jobs created in 2011.

And the president, now known as the landlord-in-chief, announced a broad plan to save the hundreds of thousands of people with underwater mortgages. Too bad Mr. Obama didn't disclose to the cheering throng in Falls Church that his plan has exactly zero chance of passing through congress because it requires the banks to pony up some money to fund these write-downs. The program to rent out already foreclosed-upon homes will move forward, however, bringing the slums directly to a neighborhood near you.

(Personally, I'm still waiting for car dealerships to give away new cars as long as the buyer signs an oath to only buy gas from ExxonMobil. I want a Veloster, or, something like that.)

Happy days!

Dow 12,716.31, +83.40 (0.66%)
NASDAQ 2,848.27, +34.43 (1.22%)
S&P 500 1,324.08, +11.67 (0.89%)
NYSE Composite 7,940.29, +101.81 (1.30%)
NASDAQ Volume 2,046,891,250
NYSE Volume 4,380,622,000
Combined NYSE & NASDAQ Advance - Decline: 4505-1144
Combined NYSE & NASDAQ New highs - New lows: 441-21 (now, that's extreme! Time to sell.)
WTI crude oil: 97.61, -0.87
Gold: 1,749.50, +9.10
Silver: 33.81, +0.55

Correlation Trades Correlating, Kind of; Jobs Data Up Next

Remember those correlation trades that were discussed at length yesterday and how they weren't exactly correlating?

Well, today, they worked a little better, though they are still skewed against their traditional trading bias.

The Euro was flattened today, hitting a new 12-month low against the US Dollar, and, for a while, that seemed to be working as US stocks were down heavily in morning trading, but, as soon as Europe's equity markets closed at 11:30 am ET, stocks began drifting upwards, and the momentum stocks on the NASDAQ actually finished with healthy gains while the S&P and Dow (which had been down as much as 134 points earlier) finished basically flat.

With the Euro hitting below 1.28 to the dollar, the Dollar Index responded with a one percent gain (80.949, +0.818), reaching a one-year high. That sent oil prices lower, as it should, despite the continuing wagging of tongues by both the Iranians and the leaders of the EU. While the EU's move to embargo all shipments of oil from Iran to Europe, is a bit of a dodgy move (Iran's exports to Europe only account for 20% of their oil exports), so too is Iran's statement that they can and will shut down the shipping lanes through the Strait of Hormuz.

It looks like the classic Mexican standoff, with the US pointing its guns directly at the Iranians. The Europeans will likely go through with their threatened sanctions, but the Iranians will probably not want to evoke the ire of the United States, because that would produce something along the lines of World War III, even though that may be what Iran wants and the rest of the (un)civilized world needs.

Europe's woes continue non-stop, with the ultimate Ponzi scheme of the banks buying sovereign debt, and the ECB financing the banks. It's the most disingenuous way of dealing with a solvency crisis - by adding layers and layers of liquidity - and it eventually will either spark runaway inflation, riots, government overthrow or the breakup of the European Union, and it's possible that all of the above could occur.

As for gold and silver, they were back in tandem, though with the higher dollar, they both should have been lower, instead of up, which they were, supposedly on global tensions and safe-haven status.

The other news of the day involved US employment figures from ADP, which reported a gain of 325,000 private sector jobs in the US, seasonally adjusted. The number was so large, and so far removed from official predictions (guesses), that traders generally ignored them, opting to wait for the equally-well-massaged non-farm payroll report from the BLS tomorrow.

That report, which will be issued at 8:30 am ET, should be a market mover, especially if it aligns well with the ADP number, but skeptics abound, and the estimates are for the US to have added somewhere between 120-175,000 new jobs, which would indicate exactly what? The BLS numbers are guestimates at best, but traders will likely take their cue from whatever blather comes from the Labor Department.

Stay tuned. It's going to get more bizarre as the year progresses.

Dow 12,415.70, -2.72 (0.02%)
NASDAQ 2,669.86, +21.50 (0.81%)
S&P 500 1,281.06, +3.76 (0.29%)
NYSE Composite 7,599.97, -12.18 (0.16%)
NASDAQ Volume 1,859,210,875
NYSE Volume 4,264,649,000
Combined NYSE & NASDAQ Advance - Decline: 3391-2193
Combined NYSE & NASDAQ New highs - New lows: 140-37
WTI crude oil: 101.81, -1.41
Gold: 1,620.10, +7.40
Silver: 29.30, +0.20

Santa (Ben Bernanke) Arrives Early in Europe; Gold, Silver Surge

Stocks worldwide were up sharply Wednesday on the news that the Federal Reserve, in conjunction with the Central Banks of Canada, England, Japan, Switzerland and the European Central Bank (ECB) agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points.

It was an early Christmas gift that sparked a speculative rally and kept Europe from unraveling, again.

What we've repeatedly heard is that the current calamities of the Euro-zone are nothing like those encountered on American soil in 2008.

The plain fact that banks in Europe are under dire stress and in need of liquidity not only reprises 2008, but adds a crescendo affect that's akin to adding the NY Philharmonic, the Ohio State marching band and the Mormon Tabernacle Choir to the efforts of the Boston Pops.

Stresses on European banks, especially those in France, Belgium and Italy, have been exacerbating on a near-daily basis, with the potential for global contagion even greater than when Lehman Bros. was allowed to flail and fail.

Thus, as some unknown Europe-based bank was about to go under - rumors say $265 million in overnight borrowings from the ECB was the tip-off - the global elitist Central Bankers conspired to lift liquidity by lowering the borrowing rates on US Dollar swap arrangements by 50 basis points (1/2 percent).

Magically, not only was the global Ponzi financial system saved for the day, week or month, but the added benefit of having global equity markets spike 3-4% higher came along as an intended consequence. Yes, the globalists know what they're doing. Too bad for them that it doesn't work long term, as we know so well from recent history, circa September, 2008.

Here's a post, by none other than some character calling himself John Galt, that has both the 2008 and current Federal Reserve press releases. The similarities are striking, but also magnificent was the 2008 aftermath, the worst financial crisis of the last 70 or so years, and the resultant crash of the equity markets.

So, Santa came to town (Europe) dressed as Ben Bernanke, with his trusty elf, Tim Geithner, in tow, passing off presents to the good (and bad) bankers across the continent. While this constitutes Christmas and a Santa Claus Rally about a month prematurely, what can Europe and the global economy expect when the holiday actually arrives on December 25, lumps of coal, or perhaps soaring gold and silver prices?

The actual timing of the eventual collapse is still unknown, though this desperation move seems to indicate that the global financial structure is crumbling faster than the "unseen hands" of the central banks can prop it up. A dive in equities may not coincide with Christmas - that would be a shame - but rather sometime in early 2012, likely in the first quarter and quite possibly in January as profits are taken early in the year on stocks pumped to unwieldy heights in December. The net results being a relatively weaker dollar and higher prices for just about anything one consumes or needs. When the crash comes, of course, the Euro will descend and the dollar will rise, though the effect is probably short-term, until the Easter Bunny fills up those empty bank liquidity baskets again.

As the adage implies, this massive liquidity gift may indeed have a silver lining, encrusted with much-higher-priced gold.

Prior to the Fed's announcement, the People's Bank of China cut bank reserve requirements for the first time in three years, by 0.5%, amid signs that the Chinese economy is slowing due to slack demand for China's exports, particularly from Europe.

After the announcement, with futures up dramatically, ADP released its November Employment Change results, showing the creation of 206,000 private sector jobs during the month. The private survey is a regular precursor to Friday's BLS non-farm payroll data.

Third quarter productivity was measured as up 2.3%, while unit labor costs fell 2.5% as companies hunker down, doing more with fewer employees.

Fifteen minutes into the trading session, Chicago PMI reported a big jump, from 58.4 in October to 62.6 in November. It was an unnecessary boost to a market which had already spiked higher at the open.

There was no fade in this one-day rally, coming conveniently on the last day of the month, traditionally the day reserved for "window dressing" by fund managers. Stocks were up monstrously on the open and continued along a high, flat line for the rest of the session, until a final short-covering episode in the final fifteen minutes pushed indices even higher.

Just speculating, but it had to be one of the best market moves of the year, if not the best. Volume was sufficient, though not overwhelming. The late-day surge may be indicating that even more easy money will flow from the Fed to the hampered Eurozone.

As to whether the moves in stocks are sustainable and the even more important question of whether or not Europe is "fixed," the answers will only be known at some future date. The most cogent commentaries on Europe suggest that today's coordinated central bank motivation only covers over a dire condition in the European banking sector and is nothing more than a liquidity band-aid on a solvency open gash. Europe's funding problems remain unresolved, though any mention of default or collapse has probably been delayed by a few weeks or a month.

And just in case you're worried about food shortages or another recession, the Obama administration and congress actually did accomplish something, recently having lifted the five-year-old ban on slaughtering horses in America. Not to worry, though. Americans won't be eating Little Red Pony or Trigger any time soon (we hope). The meat will likely be shipped to Japan or Europe. However, if this is a trend-setter, cans of Lassie, Rin Tin Tin or Boo Boo Kitty may be in supermarkets soon. Dog food and cat food may take on newer, twisted meanings.

Dow 12,045.68, +490.05 (4.24%)
NASDAQ 2,620.34, +104.83 (4.17%)
S&P 500 1,246.96, +51.77 (4.33%)
NYSE Composite 7,484.49, +334.78 (4.68%)
NASDAQ Volume 2,386,048,000
NYSE Volume 5,808,163,500
Combined NYSE & NASDAQ Advance - Decline: 4913-861
Combined NYSE & NASDAQ New highs - New lows: 161-68 (this has rolled over)
WTI crude oil: 100.36. +0.56
Gold: 1,745.50, +32.10
Silver: 32.73, +0.88

MF Global Bankruptcy, Bank of Japan Send Stocks Reeling

Anyone who assumed that equity markets would behave after last week's Eurofix found out today what a sadly mistaken assumption that is. Stocks fell right from the opening bell, stabilizing about two percent lower, but capitulating in the final minutes of trading to end near session lows.

Part of the catalyst for selling stocks was the widespread appreciation that not all of Europe's problems are solved, but also the trading suspension and subsequent bankruptcy filing by MF Global (MF), a primary dealer run by former Goldman Sachs CEO, former New Jersey governor and regular Bilderberg atterndee, Jon Corzine. (Yes, it's true, the rich do sometimes eat their own.)

The firm was under pressure recently after having made sizable investments in risky European sovereign bonds, many of which have blown up and become worth much less than what MF Global had paid.

A swell fact box from Reuters shows that MF Global is the 7th largest bankruptcy since 1980, though it's probable that any bankruptcies prior to that date are smaller than #15, IndyMac, which went bust for $32.73 billion in 2008. Also worth noting is that 13 of the 15 occurred after 2000, and three of the top four happened in 2008-2009. So, the question of whether MF Global's little $41.05 billion will cause consternation and contagion, and, if so, how much?

The bankruptcy filing showed Corzine's firm listing as its largest unsecured creditors, JP Morgan Chase (JPM) $1.2 billion and Deutsche Bank about $1 billion.

With Europe still unsettled despite the outline of plans being trotted out last week (and the market rallying strongly), there's still plenty of counterparty risk whisking around the toilet bowl of global debt and MF Global, being a primary dealer, had all the advantages one could dream of and still went up in flames.

Adding to Monday's melodrama was the poor report from the Chicago PMI, which came in at 58.4 for October after a 60.4 reading in September, yet another sign that the US economy may not be doing as well as some might imagine.

The Bank of Japan intervened in its own currency, selling yen and buying US dollars. This sent the dollar soaring and the yen plummeting, in a move the Japanese central bank hopes would improve conditions for the nation's exporters. The follow-on was a crashing Euro, which confounded forex traders after the Euro had risen dramatically against the dollar over the past three weeks. Along with US stocks, commodity prices were mostly lower.

While the kick-off of the week was a rapid reversal of fortune after the extended bull rally of the past four to five weeks, there is certain to be more fireworks ahead. The Federal Reserve begins a two-day meeting on Tuesday, with a rate policy announcement due Wednesday. Hints that the Fed may embark on another round of QE have been circulating, though Fed members have not been forthcoming with details. There is also a bevy of economic data releases scheduled, with October Private Payroll data from ADP and crude inventories on Wednesday, unemployment claims, third quarter productivity, October factory orders and ISM Services on Thursday, prior to the Friday announcement from the Labor Department on non-farm payrolls for October.

With this kind of beginning, the markets will need some stroong economic data to stave off another batch of selling into perceived strength.

Dow 11,955.01 276.10 (2.26%)
NASDAQ 2,684.41 52.74 (1.93%)
S&P 500 1,253.30 31.79 (2.47%)
NYSE Compos 7,563.38 240.56 (3.08%)
NASDAQ Volume 1,788,364,125.00
NYSE Volume 4,310,269,000
Combined NYSE & NASDAQ Advance - Decline: 1125-4532
Combined NYSE & NASDAQ New highs - New lows: 59-39
WTI crude oil: 93.19, -0.13
Gold: 1,725.20, -22.00
Silver: 34.35, -0.93

Quiet Day as Stocks Ramp Up Further in Advance on NFP Data

It was a very quiet, lackluster session for US stocks after yesterday's flash rally in the final hour had the desired effect of cooling off the shorts and the sellers, at least for a day. There was scarcely a peep coming out of Europe, the main culprit for increased volatility in US markets, and the upside play was enhanced when ADP released its September Employment Change report, showing job gains of 91,000 over the past month, though the number was 89,000 prior to that and the official US Labor Dept. non-farm payroll survey came up with a big, fat zero, so hope for significant job gains this month will depend on how drastically federal, state and local government jobs were slashed in September. The non-farm payroll report comes out before the markets open on Friday and estimates are in a range of gains of just 30,000 to 90,000.

Another boost to confidence was applied when the ISM Services Index fell less than expected, from 53.3 in August, to an even 53 in September. Of course even though the employment picture for private employers may be exhibiting signs of renewed hope that the US economy may avoid a recession by a hair, the report from Challenger, Gray and Christmas painted a different picture, with an increase of 211.5% in mass layoffs over last year. The planned job cuts of 115,000 were the highest reported since April 2009, at the depth of the latest recession and were 126% higher than those reported in August.

Regardless, stocks marched higher throughout the day, on strong volume. This two-day rally has to be put into perspective, however, as it began as a desperate bounce off new lows, was more than likely the work of a number of insiders and scared short sellers back into hiding, though a few more days of gains might just bring them out once again.

Everything seems to be heading for the non farm payroll report on Friday, but Thursday's weekly reading of initial unemployment claims, if they continue heading lower, as they did last week, should give stocks more lift.

The oddly-quiet nature of today's trade, when combined with the incidence of solid volume sets up an interesting trading regimen for the remainder of the week. Of course, that could all be scuttled by more negative news out of Europe, which has developed the nasty habit of showing up just in time to kill numerous rallies over the past two months.

With market reactions to every bit of news, trading stocks have become about as reliable as an old fashioned craps shoot on a Bowery back alley. Real money has retreated into cash, gold, treasuries or other hard assets, where merely holding onto what one's got has become the mantra of a new, risk-averse generation of money mavens.

This current rally is nothing but flux and fluff and, like so many before it, will probably end up in tatters before long. Deflation has reared its ugly head and won't back down until Bernanke gives in and goes for another round of quantitative easing, the worst of all possible solutions.

Dow 10,939.95, +131.24 (1.21%)
NASDAQ 2,460.51, +55.69 (2.32%)
S&P 500 1,144.04, +20.09 (1.79%)
NYSE Composite 6,843.41, +120.43 (1.79%)
NASDAQ Volume 2,457,121,250
NYSE Volume 5,855,495,000
Combined NYSE & NASDAQ Advance - Decline: 4664-1866
Combined NYSE & NASDAQ New highs - New lows: 18-138
WTI crude oil: 79.68, +4.01
Gold: 1640.70, +16.50
Silver: 30.43, +0.20

Stocks Finally Post Gains After 7-8 Days of Losses

Sooner or later there was going to be some kind of rally and today was it, even though it wasn't anything to write home about.

After the Dow had been down for eight straight sessions and the S&P down seven in a row, the early morning trade looked to be more of the same with the major indices dropping to session lows around 10:45 am EDT. The Dow was down more than 160 points, officially touching down at 11,700, when the turnaround began. The S&P was sporting losses of nearly 20 points before heading higher and closing at the highs of the day.

It's not as though anything had changed at all. Italy is on the brink of default, following in the footsteps of neighboring EU nations, Ireland, Portugal and Greece. European-based banks are supposedly frozen with terror having exceeded all prudent boundaries for lending to highly-indebted nations.

And, here in the US, no change will come to the current jobs or housing situation as the congress has already embarked on a month-long vacation, after, of course, taking a few victory laps for their last-minute daring-do on raising the debt ceiling and putting forth a measure that cuts somewhere between $20 and $25 billion from the budget in 2012, less than 1/10th of one per cent of the entire budget, or, quite literally, a drop in the budget bucket.

The only thing moving stocks today - besides the obvious influence of the PPT - was the extremely oversold condition of the markets. The Dow is down 828 points since just July 21, exactly 10 trading sessions. There's a very realistic chance that this was only a knee-jerk reaction rally, based entirely upon the notion that stocks are cheap relative to where they were trading two weeks ago.

Dow 11,896.44, -29.82 (0.25%)
NASDAQ 2,693.07, -23.83 (0.89%)
S&P 500 1,260.34, -6.29 (0.50%)
NYSE Composite 7,853.20, -21.22 (0.27%)

Advancing issues finally took the edge over losers, 3737-2897. The NASDAQ posted 28 new highs, against 204 new lows, while the NYSE had just 14 new highs and 275 new lows, blowing the combined total up to 42 new highs and 479 new lows. This high gap indicates that stocks are on the verge of a severe, long-term breakdown, despite today's small gains. Volume was strong, but the buying seemed to be out of desperation and directed at short-term profit rather than long-term investment.

NASDAQ Volume 2,637,190,000
NYSE Volume 6,487,507,000

Two pieces of jobs-related data showed that the jobs market is still in quite the dodgy condition. The firm of Challenger, Gray and Christmas released their monthly survey of planned layoffs, which showed employers announcing 66,414 planned job cuts in July, up 60.3 percent from 41,432 in June. Meanwhile, the ADP monthly private payroll survey surged to 114,000 added jobs in July, a positive sign for Friday's non-farm payroll numbers from the BLS.

Commodities continued along their bifurcated path, with oil down $1.86, to $91.93, while gold surged to another record at $1,666.30, up a whopping $21.80 on the day. Silver rose $1.67, a gain of more than 4%, to $41.76, the highest close since May.

All of this sets up for an exciting end to the week. Thursday's initial unemployment claims will show the way on Thursday, while the non-farm payroll report - expected to show a gain of 100,000 jobs for July - should set the tone on Friday.

ADP Surprise Sends Stocks Into Stratosphere

At 8:15 am today, it was game, set, match for the bulls, because the ADP employment report for June showed an increase of 157,000 jobs, more than double the 60-70,000 most economists were expecting. A surprise this large occurs seldom, despite the fact that economist "experts" are generally nothing more than professional guessers, so, the futures leapt forward and stocks opened the trading day strong to the upside.

Incidentally, initial unemployment claims came in at 418,000, the 13th straight week over 400,000, though the market shrugged that data off completely the moment it was released.

They stayed in positive territory for the remainder of the session, stretching the latest ramp-job bill run to eight days, though Tuesday and Wednesday of this week did see some deterioration.

With the government's non-farm payroll data due out at 8:30 am on Friday, there was little to fear into the close, as US markets put in another stellar performance. Stocks finished the day approaching the highs of the year (which are also three year highs, and in the case of the NASDAQ, nearly a four-year high), just two weeks after the gloom and doom crowd seemed to have set the tone for the rest of the year.

Now, this set-up, coming directly prior to earnings season, could be a mammoth double or triple top, but if it's not, expect the markets to go careening upwards without much resistance. Dow 13,000 is well within sight and there's nothing the Fed and the banks and the federal government would like to see more than some record-setting gains on the major indices.

Never mind that the equities game is as crooked and manipulated as they can possibly be, the idea is that the "wealth effect" will create more confidence in the average Joes and Janes, leading to more spending and a more robust economy. It actually could work, though there are doubters, especially the 15 million Americans who cannot find jobs, or the millions who have been foreclosed upon and subsequently lost their homes, or the 45 million on food stamps.

With those groups in consideration, there seems to be a massive disconnect between Wall Street and Main Street and it is precisely why a growing number of Americans have pulled out of stocks entirely and are investing in more down-to-earth investments like back-yard gardens, gold, silver and ammunition. This crowd does not trust the bailout queens of Wall Street nor the Sugar Daddies in the nation's capitol. Instead, they see a hollowed-out shell of a nation, pinning its hopes on paper pushers and overpriced, over-hyped securities that derive a major share of their profits outside the United States.

While a rising stock market may look good on paper, the inner workings of the US economy are badly damaged goods. States are struggling to meet budgets and there's been little to nothing done to address the root causes of the national slow-down: housing and jobs. we are living in a bifurcated economy and nation, and it is not likely to sustain itself well without some serious setbacks. But, for the time being, the status quo has carried the day, though its proclamations of recovery and prosperity (nobody actually saying that yet) don't ring true to many people.

Dow 12,719.19, +93.17 (0.74%)
NASDAQ 2,871.95, +37.93 (1.34%)
S&P 500 1,353.07, +13.85 (1.03%)
NYSE Composite 8,474.88, +78.40 (0.93%)

Advancing issues absolutely buried decliners on the day, 5126-1473. On the NASDAQ, 227 new highs and just 22 new lows. The NYSE had 287 new highs and 8 new lows, making the combined total 514 new highs and 30 new lows. These are the kinds of numbers that would signal a renewed bull market, indicating that there is more upside in the very near future, despite the low volume, which was at its high point of the week, not saying much.

NASDAQ Volume 1,793,291,000.00
NYSE Volume 3,860,334,750

Crude oil galloped ahead to the tune of a $2.02 per barrel gain, finishing at $98.67, which ensures high gas prices through the remainder of summer unless there's a sudden reversal (don't count on it). Gold posted a slight gain of $1.40, to $1,530.60; silver was up 62 cents, to $36.54, though it still seems range-bound and probably is, with the shorts still in control.

The gain in crude has outstripped the gains in the precious metals today, though it's difficult, if not impossible, to draw any sound conclusions from this except that the global central bank cartel likes higher oil prices much more than they like gold or silver. If they had it their way, gold and silver would not have any value at all.

Friday's non-farm payroll report should prove interesting, especially if it's an "official lie" of over 150,000 new jobs.

A Major Dose of Reality and the Beginning of the End of Paper Money

Confirming yesterday's hypothesis that "something is wrong," stocks righted themselves to the steady flow of horrible economic news on wednesday and took their largest losses in months.

What really sent the markets into a deep funk was the release of the ADP private payroll survey, which showed job gains for the month of May to be only 38,000, when most estimates ranged from 175,000 to as high as 300,000. That sent futures tumbling in the hour just prior to the open and stocks did a complete reversal from Tuesday's glorious rally, which, truth be told, was based on nothing but hot air, or even cold air, but air, nonetheless.

Once traders had tasted the bitter flavor of selling winners and losers alike, the ISM manufacturing index came in at 10:00 am, well below expectations of 57.0, at 53.5, after notching a 60.4 handle in April. Despite still being positive (above 50), it was the worst reading since the fall of 2009.

Lumped on top of Tuesday's Chicago PMI and Case-Shiller housing report, the first week of June looks like it may be a tide-turning one. The euphoria of Tuesday's happy-face rally all but extinguished, investors, economists and government talkers must face the grim reality that the economy is sputtering, even after trillions in stimulus over the past two-and-a-half years.

The fallout from the long series of poor to horrible economic reports was that the benchmark 10-year note fell to its lowest level since last summer, checking in at 2.94%, after closing at 3.06 yesterday. Sub-3% yields on the 10-year is swell for borrowers, but it also belies a grim truth: that the economy is dead in the water, and there is nowhere to go but into the relative safety of fixed income, albeit at very unattractive yields.

Dow 12,290.14, -279.65 (2.22%)
NASDAQ 2,769.19, -66.11 (2.33%)
S&P 500 1,314.55, -30.65 (2.28%)
NYSE Composite 8,281.59, -195.69 (2.31%)

Declining issues overwhelmed advancers, 5420-1222. It was the biggest rout of 2011. Still hanging on for dear life, the new high-new low indicator showed the NASDAQ dead even at 74 new highs and the same number of new lows. On the NYSE, a bit more resilience, with 101 new highs and 38 new lows, though once again, the margin is shrinking and it's only a matter of time before the market flips right over and a full-blown correction can be announced.

Naturally, since nobody wants or likes to face the reality of the situation, the US and global economies are almost completely kaput. Nothing more than wasted effort printing worthless Dollars, Euros and Yuan will be the requisite response from the league of central bankers whose policies have been exposed as outright disasters. A great reckoning is upon us, and those who have not prepared will be blind-sided and left in tears with paper assets worth nothing.

Volume was on a par with Tuesday's, unsurprisingly, though one could have expected even heavier selling. Apparently, not everyone is convinced that the game is over. The Too Big To Fail banks are still holding out hope for more dollar devaluation for the Fed and more handouts via the strapped and wrecked taxpayer base.

Of the more curious aspects of today's global melt-down was that the dollar actually looked like the best of a bad lot, rising 0.364 to 74.90, though that condition is - as the Chairman might express - transitory. Eventually, all paper money will be debased to nothing as the world sinks into global depression.

NASDAQ Volume 2,316,268,250
NYSE Volume 4,920,608,500

Of some small consolation to millions of consumers, oil fell abruptly, down $2.41, to $100.29. While still about $25 higher than it should be, the price of crude and the resultant price of gasoline should ease over the coming days and weeks to reflect the true status of the economy. Nothing kills growth as quickly or completely as high oil and gasoline prices, and, even though demand has been falling steadily since the average price of a gallon of unleaded gas hit just below $4.00, the price still remains a drag on the overall economy, at $3.77.

Gold was the greatest beneficiary of Wall Street's loathsome session, hitting a two-month high at $1551.20, before falling back to $1539.10, up $4.10 on the day. Naturally, the central banking cartel could not let silver go untouched, smashing the second precious metal down $1.65, to $36.82. Of course, in a deflationary depression, the metals offer no great relief, though they will tend to outperform all other asset classes and when the collapse of all fiat money occurs, they will shine as saviors.

June is shaping up to be a killer for the stock markets. Even though the ADP employment report has been widely criticized, there's little doubt that Friday's non-farm payroll report for May will be nothing short of disastrous, showing quite clearly that all the stimulus and wanton speculation of the past two years has done nothing to repair the deep wounds to the Main Street economy.

What little hope there is can be found amongst those who believe it is time for honesty and a change of policy, that people be favored over wealthy banks and their criminal CEOs and that government, if unable to serve the needs of the people, will be left behind. As during other times of hardship, the American public will turn to barter, black markets and other underground economies. Governments at all levels will be left holding onto unwieldy deficits as tax receipts fail to materialize.

The more one pays attention to what comes out of the mouths of bankers, government officials and elected legislators, the more one comes to realize that they have no interest but their own at heart and the American people will carry on without them, even if it means wholesale tax rebellion at every level. The system is burdened with unassailable costs and debts that cannot be paid. When and if congress decides to actually come to grips with these harsh realities, we will begin healing, though most with any sense of history feel that government has lost all control and the people are about to begin fending more or less for themselves.

Of course, the government will continue kiting checks to the "needy" and keeping the masses at bay with food stamps and other entitlement outlays, but the value will continue to erode and the already well-entrenched, wretched sub-class of welfare and government dole recipients will suffer even more.

It is truly a remarkable time in the world's history, and probably better to be young than old, for the young have the advantage of time - to repair, replenish and rebuild that which our absent leaders have destroyed.

Markets Continue to Rally in Spite of World Tensions

Honestly, I've never - in more than 40 years of market-watching - seen anything quite as obnoxious, illogical, repugnant and obscene as the current market dynamics.

Japan is reeling from the tsunami of nearly three weeks ago, their nuclear disaster continues to worsen, and all the Wall Street mob can do is push stocks higher and higher.

Housing is still in a major depression, real unemployment is at 17%, states and cities are struggling to balance their budgets, Northern Africa and the Middle East are in flames and revolution. Somehow, Wall Street imagines this to be bullish.

I consider it a trap, designed to entice small investors to plunge into stocks just when they are approaching the most overbought condition in the past two years, spurred on by free money being pumped in by the Federal Reserve and just before the release of first quarter earnings statements.

It's difficult to believe anything put out for inspection by the financial media, as controlled as it is by the Wall Street elite and how piously they - CNBC, Reuters, Bloomberg and the Wall Street Journal - pray at the font of greed and lasciviousness.

Someone said the other day that we have become George Orwell's 1984 - forever at war with Eastasia or Eurasia, where doublespeak is the norm, and where love is hate, evil is good, and thoughtcrime is prosecutable.

We've passed into an era of extreme income disparity, and the elitists are, as usual, winning. Ever so slowly, the entire population of the planet is being lied to, poisoned, swindled and debased. Something has to change. But, there is so much cognitive dissonance within the general population, I fear nothing will change. We will - with the exception of a few - accept our fate willingly and go about our dreary days without purpose, without cause and without a future.

Dow 12,350.61, +71.60 (0.58%)
NASDAQ 2,776.79, +19.90 (0.72%)
S&P 500 1,328.26, +8.82 (0.67%)
NYSE Composite 8,416.69, +71.31 (0.85%)

Once again, advancing issues led decliners, 4709-1835. The NASDAQ showed 192 new highs and 23 new lows. On the NYSE, there were 262 new highs and 12 new lows. Absurd. Volume was a little better than the previous two days, but only marginally so.

NASDAQ Volume 1,829,250,875
NYSE Volume 4,167,294,000

Oil eased off a bit today, down 52 cents, to $104.27, though still stubbornly clinging to the new, semi-permanent $105 area. Gold gained $7.50, to 1,423.80, and silver was up 52 cents, to $37.51.

Prior to the market open, the ADP private payroll data was announced for March, showing a gain of 201,000 new jobs. Usually disregarded as a flawed survey, today it was warmly embraced by the financial media elite, in advance of Friday's March non farm payroll numbers.

Does it matter? Even if the government announces that unemployment is 8.5% (laughable, though they might), the new jobs are paying 60-80% of what the lost jobs did. The middle class continues to be squeezed to death by income stagnation and inflation in prices for everyday living goods, gas, food, utilities, clothing.

Where will it end? When will it end?

While Japan Melts Down, US Stocks Melt Up

Though many doubted the thrust and wisdom of the Federal Reserve's QE2 and ZIRP efforts, the Fed can now claim some success.

That success, however, is limited to one's perception. If higher commodity, food and energy prices, a completely collapsed housing market and a stock market rally in which almost nobody participates is one's idea of success, then a big hand for Chairman Bernanke and his merry band of idiots otherwise known as the Board of Governors of the Fed.

It was reported yesterday in this space that trading volume had sunk to its lowest level of the year. Today's numbers were a mirror image, marking the two slowest trading days of the year, for sure, and possibly the lowest two-day total volume since sometime in 2009.

So much for the so-called wealth effect we hear so much about. The only investors actually trading are the Primary Dealers with their virtually-free POMO money. It's almost as though the markets have lost the confidence of the individual investor forever. Surely, those with pension funds tied to the market must be seeing better returns, but how long they will last is anyone's guess, though it's fair to say that as long as the Fed continues to throw $100 billion or more into the fray, stocks will keep rising. It's been about the easiest trade ever.

There isn't much more to say about today's gains other than they completely disregarded the situation at the Fukushima Daiichi nuclear plant in Japan, which is now almost completely out of control, as one reactor appears to have melted through its containment vessel.

The wild-eyed buyers of today also paid no heed to the S&P/Case-Shiller 20-city index, which confirmed that housing has entered the double-dip phase, falling for the sixth consecutive month. Of course, that would assume that one believes the first dip ever ended.

And everybody simply looked the other way when the Conference Board showed its index of consumer confidence fell to 63.4 this month, from a revised 72.0 in February.

Apparently, we mere mortals simply don't understand the stock market, where news is always bullish, no matter how bad it is. Supposedly, a comet obliterating all of Europe would be cause for a 1000-point rally according to the current metrics.

Whatever is going on down on the trading floors and at the desks of the biggest brokerages, it simply doesn't jibe with reality, but that's what we've got, a rogue market on its very own illogical trajectory.

Dow 12,279.01, +81.13 (0.67%)
NASDAQ 2,756.89, +26.21 (0.96%)
S&P 500 1,319.44, +9.25 (0.71%)
NYSE Composite 8,345.38, +48.86 (0.59%)

Advancers led decliners, 4381-2145. The NASDAQ reported 114 new highs and 27 new lows. On the NYSE, there were 117 new highs and 12 new lows.

NASDAQ Volume 1,610,826,875
NYSE Volume 3,856,315,250

Commodities were mixed, with oil up 81 cents on the front-end WTI contract, to $104.79. Gold slipped $3.70, to $1,416.20 and silver fell 10 cents, to $36.99 per ounce.

This represents one of the more confusing markets in history. Bad news simply will not move stocks to the downside, and any downward move is met with a rally in short order, wiping away any and all losses in a matter or days, or hours.

Hardly mentioned is the upcoming non-farm payroll data courtesy of the BLS on April 1, this Friday, though prior to that, on Wednesday, ADP will report their proprietary survey of private sector employment. That little nugget will be released at 8:15 am, EDT, though it's generally not a market mover, being widely discredited as being unreliable.

This is fun for somebody, but who that might be remains a mystery.