Yesterday's manipulated close above the false bottom at Dow 7552 could not hold, not even for a day, in the wake of unprecedented government handouts and institutional selling that nearly brought the major stock indices to their knees in the final hours of Thursday's session. The Dow Jones Industrials finished the day at their lowest level since October 9, 2002, prior, even to the start of the Iraq War.
The best the government interlopers (through their proxies at Goldman Sachs, Morgan Stanley, et. al.) could muster today was putting a good face on an unmitigated disaster. The game is over for Wall Street. A massive systemic collapse of global finance is palpable and seemingly inevitable.
With an opening pop, investors bought the Dow up about 60 points, but the market could not sustain the gains. By 10:30 the index was back into the red. After a brief, heartless rally, stocks cascaded lower with the Dow eventually falling below 7450. From 11:30 to the close, the the major indices were all under water. Selling was relentless, with the occasional covering of options positions, which close tomorrow. A line could be drawn diagonally across the tops. The slope of the bottoms was more severe.
Dow 7,465.95, -89.68 (1.19%)
NASDAQ 1,442.82, -25.15 (1.71%)
S&P 500 778.94, -9.48 (1.20%)
NYSE Compos 4,881.16, -43.38 (0.88%)
It was not the size of the losses that mattered much in this session, but the overall tenor and tone of trading. The level of desperation as a standard emotion continues to deepen, even daily. People are angry. The press, economists, and the public are all up in arms over the rapid-fire moves of the federal government. Most of the abuse is being heaped upon newly-elected President Obama, though much of the focus is rightfully on the US congress.
Unsurprisingly, the Dow components were a shambles, 20 down and 10 up, with most of the largest losses sustained by financials and tech, though the damage was truly broad-based. Paradoxically, the largest percentage gainer on the Dow was Home Depot, which gained 1.82%, up 0.36 to 20.16.
If you're seeking a good proxy for the Dow, look no further than JP Morgan Chase (JPM), which turned negative today just as the Dow was rolling over. The pride of Wall Street banking, JPM is probably overvalued by a factor of 5-10, since it is in largely the same boat as brethren Bank of America and Citigroup, all of whom are in the government's notorious gang of Systemically Significantly Failing Institutions under the Capital Purchase Program.
JP Morgan Chase dipped 0.91 to 20.60, a mere 4.23% loss, but it is joined at the hip to Bank of America (-0.64, 3.93, -14%) and Citigroup (-40, 2.51, -13.75).
The January Producer Price Index (PPI) registered its first gain in six months, edging up 0.8% over December. This shouldn't have come as much of a surprise, since retailers discounted heavily in December during one of the worst holiday shopping seasons in memory.
Inflation alarmists should also take a cold shower on this news, as much of the increase was due to slightly higher energy prices, and, of course, the figures are seasonally adjusted. Deflation continues to rule.
But the real story of the day was the final breakdown through the November 20 bottom on the Dow. The process will no doubt continue as the other indices approach and retest their lows. The markets are again in uncharted territory.
Friday's action most certainly will be among the most volatile of recent vintage. Thursday was only a prelude to the real wealth-cleansing that will occur over the coming days, weeks and months.
Internals did little to mask the carnage. Decliners swept by advancers, 4384-2129. New lows outnumbered new highs, 617-11. Volume was strong enough to suggest more selling as more participants become engaged in a race to the bottom.
NYSE Volume 1,485,501,000
NASDAQ Volume 2,036,313,000
Commodities exhibited perhaps the most random and directionless trade in decades. Oil priced $4.86 higher, to $39.48. Gold fell $1.70, to $976.50, while silver lost 36 cents, to $13.94. The metals cooled off what was, until today, a torrid rally. Beef and corn were up, pork and soybeans were down. Natural gas fell to a new seasonal low as at $4.11, as milder weather and conservation measures are keeping demand tamped down.
The level of unrest, not only on Wall Street but on Main Street and across the nation and around the world, cannot be underestimated. Cheats and scoundrels in government and business have opened the gates of hell with their wrong-headed policies over many years. Another of America's dates with destiny is fast approaching.
Brace yourself.
Showing posts with label CitiGroup. Show all posts
Showing posts with label CitiGroup. Show all posts
Thursday, February 19, 2009
Wednesday, February 18, 2009
Dow Players Paint Tape, Confirm (False) Double Bottom
Stocks began the day with small gains and hit the day's highs shortly after noon, though they were clearly under pressure all day.
While the Dow flirted with the flat line in a very narrow range through almost all of the session, sentiment was severely split. Neither bears nor bulls could muster enough energy to move stocks clearly in one direction or the other, though the NYSE Composite and the S&P 500 spent the majority of the day in the red.
The Dow stayed on a somewhat even keel all session long, even though there were never more than 13 of the 30 stocks inside the index showing gains. Chief among the gainers was Wal-Mart (WMT), which finished the day with the biggest gain of any Dow component, up 1.76, to an even 50.00.
Others which aided the index from falling were Intel (INTC), McDonald's (MCD), IBM (IBM), Proctor Gamble (PG) and ExxonMobil (XOM). The case could be made for selective boosting of the Dow by insiders, as any number of players did not want to witness another bout of selling after yesterday's classic double bottom formation.
One had to look only so far as ExxonMobile vs. Chevron (CHV). While the former was higher all day, the latter was underwater throughout the afternoon except for the final half hour, despite the two of them being in essentially the same business. Chevron finished with a 6 cent loss, while ExxonMobil ended the day with a 66 cent gain.
At the end of the day, the bulls prevailed, lifting the Dow by the smallest of margins, notably on late day buying of just three stocks: Chevron (CHV), American Express (AXP) and Merck (MRK), each of which spent almost the entire day lower before a burst of buying in the final half hour of trading.
Dow 7,555.63, +3.03 (0.04%)
NASDAQ 1,467.97, -2.69 (0.18%)
S&P 500 788.42, -0.75 (0.10%)
NYSE Composite 4,924.54, -14.57 (0.29%)
Adding to the argument of the bears is the fact that only the Dow finished in positive territory, further evidence of insider trading in a concerted effort to finish above the now double bottom at 7552.29 (Nov. 20) and 7552.60 (Feb. 17). Their argument is hardly convincing when considering the various factors affecting market movement.
The internals were decidedly bearish, to a point at which one must question today's headline results. Advancing issues were buried under a deluge of losers, with decliners ahead, 4396-2120, a better-than 2-1 margin. Further, the gap between new lows and new highs expanded greatly, with 661 new lows to just 22 new highs. Those two indicators strongly suggest that today's finish on the Dow was a serious case of painting the tape so that the bullish cause can now call a bottom, right there at 7552 and change.
Nothing could be further from the truth. First, the Dow's gains were insignificant. Second, the other three indices finished lower and have not come close to retesting their respective lows. Third, the new highs/new lows and advance/decline lines were of a nature more like a day in which the Dow would have lost 100-200 points. Fourth, Most of the Dow stocks were lower, with the final tally at 12 up and 18 down, with the biggest volume stocks sharply lower.
NYSE Volume 1,433,404,000
NASDAQ Volume 2,060,209,000
Two largest volume movers by far - Citigroup (C) and Bank of America (BAC) were down substantially all day long with Bank of America suffering a 6.73% loss, down 0.33, to $4.57. Citigroup was down 4.90%, losing 0.15, to 2.91.
There is a growing acceptance that those two - the largest banks in America - will have to undergo some form of government receivership, or, "nationalization" in a controlled divestiture or bankruptcy proceeding with the likely assistance of the FDIC, Treasury and the Federal Reserve.
Once again, commodity prices were mixed, though similar to Tuesday's action. The metals were all higher, while foodstuffs were markedly lower, as was oil, losing 31 cents, to $34.62. Gold galloped ahead by $10.70, to $978.20, while the rally in silver continued unabated, up another 28 cents, to $14.29.
Adding to the bear case were the four economic indicators, all showing signs of stress by registering numbers for January that were down and lower than expected. Housing starts fell to 466,000, from 560,000 in December. Building permits fell to 521,000, from 547,000 in the prior month. Capacity utilization continued in free fall, down to 72% form 73.3% a month earlier. So too, industrial production, falling by 1.8% on the heels of a 2.4% fall in December.
As far as a double bottom is concerned, the charts will confirm it because they do not lie, even though the results of today's trading are highly suspect. In the end, this will be seen only as a support/resistance level as another move lower is clearly in the cards.
The manipulators in the marketplace may get a temporary boost on false hopes, though it's just as likely that the markets will continue to deteriorate and today was only an effort mixed in with Friday's options expiration. The Dow could easily lose (or gain) 300-500 points be the end of the week. It could also meander along in a meaningless pattern for some time, but eventually, this bottom will be taken out, because it is a false one.
While the Dow flirted with the flat line in a very narrow range through almost all of the session, sentiment was severely split. Neither bears nor bulls could muster enough energy to move stocks clearly in one direction or the other, though the NYSE Composite and the S&P 500 spent the majority of the day in the red.
The Dow stayed on a somewhat even keel all session long, even though there were never more than 13 of the 30 stocks inside the index showing gains. Chief among the gainers was Wal-Mart (WMT), which finished the day with the biggest gain of any Dow component, up 1.76, to an even 50.00.
Others which aided the index from falling were Intel (INTC), McDonald's (MCD), IBM (IBM), Proctor Gamble (PG) and ExxonMobil (XOM). The case could be made for selective boosting of the Dow by insiders, as any number of players did not want to witness another bout of selling after yesterday's classic double bottom formation.
One had to look only so far as ExxonMobile vs. Chevron (CHV). While the former was higher all day, the latter was underwater throughout the afternoon except for the final half hour, despite the two of them being in essentially the same business. Chevron finished with a 6 cent loss, while ExxonMobil ended the day with a 66 cent gain.
At the end of the day, the bulls prevailed, lifting the Dow by the smallest of margins, notably on late day buying of just three stocks: Chevron (CHV), American Express (AXP) and Merck (MRK), each of which spent almost the entire day lower before a burst of buying in the final half hour of trading.
Dow 7,555.63, +3.03 (0.04%)
NASDAQ 1,467.97, -2.69 (0.18%)
S&P 500 788.42, -0.75 (0.10%)
NYSE Composite 4,924.54, -14.57 (0.29%)
Adding to the argument of the bears is the fact that only the Dow finished in positive territory, further evidence of insider trading in a concerted effort to finish above the now double bottom at 7552.29 (Nov. 20) and 7552.60 (Feb. 17). Their argument is hardly convincing when considering the various factors affecting market movement.
The internals were decidedly bearish, to a point at which one must question today's headline results. Advancing issues were buried under a deluge of losers, with decliners ahead, 4396-2120, a better-than 2-1 margin. Further, the gap between new lows and new highs expanded greatly, with 661 new lows to just 22 new highs. Those two indicators strongly suggest that today's finish on the Dow was a serious case of painting the tape so that the bullish cause can now call a bottom, right there at 7552 and change.
Nothing could be further from the truth. First, the Dow's gains were insignificant. Second, the other three indices finished lower and have not come close to retesting their respective lows. Third, the new highs/new lows and advance/decline lines were of a nature more like a day in which the Dow would have lost 100-200 points. Fourth, Most of the Dow stocks were lower, with the final tally at 12 up and 18 down, with the biggest volume stocks sharply lower.
NYSE Volume 1,433,404,000
NASDAQ Volume 2,060,209,000
Two largest volume movers by far - Citigroup (C) and Bank of America (BAC) were down substantially all day long with Bank of America suffering a 6.73% loss, down 0.33, to $4.57. Citigroup was down 4.90%, losing 0.15, to 2.91.
There is a growing acceptance that those two - the largest banks in America - will have to undergo some form of government receivership, or, "nationalization" in a controlled divestiture or bankruptcy proceeding with the likely assistance of the FDIC, Treasury and the Federal Reserve.
Once again, commodity prices were mixed, though similar to Tuesday's action. The metals were all higher, while foodstuffs were markedly lower, as was oil, losing 31 cents, to $34.62. Gold galloped ahead by $10.70, to $978.20, while the rally in silver continued unabated, up another 28 cents, to $14.29.
Adding to the bear case were the four economic indicators, all showing signs of stress by registering numbers for January that were down and lower than expected. Housing starts fell to 466,000, from 560,000 in December. Building permits fell to 521,000, from 547,000 in the prior month. Capacity utilization continued in free fall, down to 72% form 73.3% a month earlier. So too, industrial production, falling by 1.8% on the heels of a 2.4% fall in December.
As far as a double bottom is concerned, the charts will confirm it because they do not lie, even though the results of today's trading are highly suspect. In the end, this will be seen only as a support/resistance level as another move lower is clearly in the cards.
The manipulators in the marketplace may get a temporary boost on false hopes, though it's just as likely that the markets will continue to deteriorate and today was only an effort mixed in with Friday's options expiration. The Dow could easily lose (or gain) 300-500 points be the end of the week. It could also meander along in a meaningless pattern for some time, but eventually, this bottom will be taken out, because it is a false one.
Tuesday, February 17, 2009
What's in Your Wallet? Not Much, Says Capital One
I'm not sure, but probably more than 30% of all adult Americans have a Capital One credit card. I used to have two, before the company - kicking and screaming all the way - finally acceded to my demands to combine them into one.
While checking some financial sector stocks earlier today, I noticed that Capital One (COF) has taken a hellacious beating this year. Since closing at 31.05 on December 31, 2008, the stock has received a 67% haircut, down to 10.13. Capital One is the nation's largest purveyor of individual credit cards, but also dabbles in making new car loans, home equity loans and other, similarly risky endeavors.
The company is notably the subprime credit lender of nearly last resort to consumers who have tapped out their home equity and are now piling up credit card debt, typically at rates of 15% and higher, and now it appears that many are not paying back their lender, as Forbes reports:
Apparently, when it comes to paying their debt to Capital One, there really isn't much left in people's wallets, much to the displeasure of COF shareholders, as the company wiped out all of the year's gains in 2008 with a 4th quarter loss of $3.74 per share.
Much of Wall Street was sharing the pain with Capital One, as stocks took yet another drubbing, with the Dow falling to within a whisker of the November 20 low (7552.29), closing right at the lows of the day, 7552.60.
This sets the stage for an interesting remainder of the week, as today's close is undeniably a double bottom on the Dow. The other majors are close to their previous lows, but not quite there.
Dow 7,552.60, -297.81 (3.79%)
NASDAQ 1,470.66, -63.70 (4.15%)
S&P 500 789.17, -37.67 (4.56%)
NYSE Compos 4,939.12, -267.64 (5.14%)
The NASDAQ has another 154 points to go, the S&P would have to shed another 36 points and the NYSE Composite is still 288 above its November 20 close. Obviously, the bank and financial stocks of the Dow have weighed heavily of late.
Bank of America (BAC) crossed the $5 Rubicon again, closing at 4.90, down 67 cents. CitiGroup (C) continued down the rat hole, losing 43 cents, to 3.06. even venerable JP Morgan Chase (JPM) lost 3.04, to 21.65. Each of those company's shares were down by more than 12% on the session.
Market internals verified just how rough a day it was for US stocks. Declining issues absolutely slammed advancers, 5803-775. New lows expanded to 555, versus a paltry 18 new highs. Volume was outstanding, signaling more selling dead ahead. Only one issue of the Dow 30 closed with a gain: Wal-Mart (WMT). For more on that, see below.
NYSE Volume 1,590,783,000
NASDAQ Volume 2,395,914,000
Commodities were split down the middle. Anything consumable, from unleaded gas to pork bellies, was down, while the precious metals shot to short term highs. Crude oil for March delivery were down $2.58, to $34.93; natural gas was off 22 cents, to $4.22, and wholesale unleaded gas closed at $1.11, begging the question as to how most consumers are paying roughly $2.00 at the pump. Look for another record quarter for the oil companies.
Gold gained $25.30, to $967.50. Silver broke 39 cents higher, to $14.01. With deflation clearly the issue, one has to wonder how far the bulls will push the metals. They are, after all, investment hedges - primarily against inflation - but commodities at heart.
Investors find themselves at a critical crossroad at the open tomorrow. Considering that only the Dow has retraced its low, it should be a pretty safe bet that all indices are heading lower in the short term.
Want to know why Wal-Mart was the only Dow component to show a gain on the day? Watch the video below:
While checking some financial sector stocks earlier today, I noticed that Capital One (COF) has taken a hellacious beating this year. Since closing at 31.05 on December 31, 2008, the stock has received a 67% haircut, down to 10.13. Capital One is the nation's largest purveyor of individual credit cards, but also dabbles in making new car loans, home equity loans and other, similarly risky endeavors.
The company is notably the subprime credit lender of nearly last resort to consumers who have tapped out their home equity and are now piling up credit card debt, typically at rates of 15% and higher, and now it appears that many are not paying back their lender, as Forbes reports:
The company also reported its annual net charge-off rate a measure of credit default, for U.S. credit cards rose to 7.82% in January from 7.71% in December.
Apparently, when it comes to paying their debt to Capital One, there really isn't much left in people's wallets, much to the displeasure of COF shareholders, as the company wiped out all of the year's gains in 2008 with a 4th quarter loss of $3.74 per share.
Much of Wall Street was sharing the pain with Capital One, as stocks took yet another drubbing, with the Dow falling to within a whisker of the November 20 low (7552.29), closing right at the lows of the day, 7552.60.
This sets the stage for an interesting remainder of the week, as today's close is undeniably a double bottom on the Dow. The other majors are close to their previous lows, but not quite there.
Dow 7,552.60, -297.81 (3.79%)
NASDAQ 1,470.66, -63.70 (4.15%)
S&P 500 789.17, -37.67 (4.56%)
NYSE Compos 4,939.12, -267.64 (5.14%)
The NASDAQ has another 154 points to go, the S&P would have to shed another 36 points and the NYSE Composite is still 288 above its November 20 close. Obviously, the bank and financial stocks of the Dow have weighed heavily of late.
Bank of America (BAC) crossed the $5 Rubicon again, closing at 4.90, down 67 cents. CitiGroup (C) continued down the rat hole, losing 43 cents, to 3.06. even venerable JP Morgan Chase (JPM) lost 3.04, to 21.65. Each of those company's shares were down by more than 12% on the session.
Market internals verified just how rough a day it was for US stocks. Declining issues absolutely slammed advancers, 5803-775. New lows expanded to 555, versus a paltry 18 new highs. Volume was outstanding, signaling more selling dead ahead. Only one issue of the Dow 30 closed with a gain: Wal-Mart (WMT). For more on that, see below.
NYSE Volume 1,590,783,000
NASDAQ Volume 2,395,914,000
Commodities were split down the middle. Anything consumable, from unleaded gas to pork bellies, was down, while the precious metals shot to short term highs. Crude oil for March delivery were down $2.58, to $34.93; natural gas was off 22 cents, to $4.22, and wholesale unleaded gas closed at $1.11, begging the question as to how most consumers are paying roughly $2.00 at the pump. Look for another record quarter for the oil companies.
Gold gained $25.30, to $967.50. Silver broke 39 cents higher, to $14.01. With deflation clearly the issue, one has to wonder how far the bulls will push the metals. They are, after all, investment hedges - primarily against inflation - but commodities at heart.
Investors find themselves at a critical crossroad at the open tomorrow. Considering that only the Dow has retraced its low, it should be a pretty safe bet that all indices are heading lower in the short term.
Want to know why Wal-Mart was the only Dow component to show a gain on the day? Watch the video below:
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