Sell in May and go away?
Balderdash.
Summer slump?
Nonsense.
Stocks have had an amazing run through July and August, thanks to ultra-low bond yields driving money into stocks, momentum, and oodles of dollars going straight to Wall Street from the Federal Reserve.
As noted by countless economists, columnists, and stock enthusiasts, the backstops provided by the Fed have servd the interests of Wall Street in glorious ways, sending stocks soaring, the S&P and NASDAQ having made multiple record highs over the past eight weeks.
While the NYSE Composite Index and Dow Jones Industrial Average have not made it yet to new records, they're getting close and the Dow, specifically, will get a significant boost on Monday (the final trading day of August) when Exxon Mobil (XOM), Raytheon (RTX), and Pfizer (PFE) are replaced with Salesforce (CRM), Amgen (AMGN), and Honeywell (HON).
Already within 900 points of its all-time closing high (29,551.42, 2/12/20), it's within similar range of the intraday high of 29,568.57, which was also made on February 12. The added boost from the booting of three laggards with three high-fliers should send the industrials over the top, possibly this coming week.
Just how good the summer has been to investors is illustrated by the weekly closes for the past eight weeks, beginning July 6 and ending this past Friday, August 28. The slowpokes among the indices was the Dow and NYSE. The latter rose from a July 2 close of 11,991.52 to 13,170.96. It closed on the plus side seven of the eight past weeks for a 9.84% gain.
The Dow Industrials gained in five of the eight weeks, rising more than 2800 points from its July 2 close of 25,827.36, a gain of 10.94 percent.
The S&P closed at 3,130.01 on July 2, and added 378 points during the past eight weeks for a solid 12% upside, while the NASDAQ took home the top prize, vaulting from 10,207.63 eight weeks ago to its most recent record close of 11,695.63, a 14.6% gain. The S&P was up in seven of the past eight weeks while the NASDAQ finished in positive territory in six, including the last five straight.
So, whoever said the era of passive investing was over obviously hasn't taken account of the performance of index funds, which have sparkled recently, despite the narrative supplied to the market by the FAANMGs, the six tech stocks that have largely been responsible for the bulk of the gains in the NAZ and S&P. Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), Microsoft (MSFT) and Alphabet, parent of Google (GOOG) account for roughly 25% of the market capitalization of the entire S&P 500. Throw in Elon Musk's Tesla (TSLA) and one could make a very strong point about picking the right stocks over passive investing.
Apple, which recently announced a 4-for-1 stock split, was up 39% over the past eight weeks. Tesla gained a whopping 54%, while Amazon gained only 19%, though it and the other FAANMG components have been steady outperformers for years.
Warren Buffett, who turns 90 today, made news this week when it was revealed he was selling off some banking stocks while picking up shares of Barrick Gold. The information came from the latest 13F filing from Bershire Hathaway, the holding company for Buffett's global portfolio.
The punditry of the investment world made plenty of noise over the move, especially since Buffett had previously claimed to not think much of gold as an investment. One of the most-cited quotes attributed to Buffett's disdain for gold is "[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility."
While Buffett's purchase of some Barrick Gold shares (roughly $600 million) may look like a departure from the Oracle of Omaha's norm, the truth of the matter is that the shares account for a smidge more than 0.2 percent of Bershire's 250 billion stock portfolio. What's interesting about the move was that Berkshire closed its position in Goldman Sachs (GS), eliminating the Vampire Squid entirely from its holdings. It also trimmed positions in JPMorgan Chase (JPM) and Wells Fargo (WFC), but upped its position in Bank of America (BAC), which is now the second-largest holding, well behind #1, Apple.
It will be another three months before we'll know whether Berkshire intends to keep buying Barrick or even other gold-related stocks. For all anyone knows, Buffett could have a secret stash of gold and silver coins buried in his back yard, just in case.
Speaking of reasons to own gold and silver, the second estimate of second quarter GDP was released on Friday, and it was a slight improvement from the initial reading, but not enough of one to matter. The decline, which was estimated to be a record 32.9%, was revised to a 31.7% loss, still the largest on record by far. Making matters more concerning, it's been a fact for some time that the government spending portion of the GDP calculation has been inordinately high, and it now accounts for more than 50% of GDP. The other roughly one-half of GDP is largely consumer spending, people buying things they don't need with credit cards they can't afford to pay.
In the oil patch, the slow, relentless rise in the barrel price of oil continued apace with WTI crude peaking at $43.34 on the 26th - the highest price since March 3rd - before settling at $42.97 on Friday afternoon. Theprice of WTI crude has been below $40 just twice since July 2nd, with the recent prices nearing the top of the recent tight range. With the Labor Day holiday a week off, prices for crude and gas at the pump may begin to decline as the traditional end of summer normally results in lower prices, though these days have been anything but normal.
Treasury yields peaked on Friday, with the 10-year note ending at 0.74% and the 30-year at 1.52%, both the highest since June 16. Shorter-dated maturities were little affected by market noise nor Fed Chairman Jerome Powell's virtual keynote for the Jackson Hole symposium in which he promoted increasing inflationary policy incentives at the Federal Reserve. Powell's insistence that inflation of two percent or more somehow equates to the Fed's mandate of "stable prices" serves to point out what an abject liar he is and what a complete failure the Federal Reserve as a whole has been since its inception more than 100 years ago. The Fed has failed spectacularly in achieving both of its mandates as the dollar has lost 97% of purchasing power since 1913 and full employment - the other mandate - is about as far from the minds of the regional Fed presidents and governors of the FOMC as the Earth is from planet Jupiter.
Gold regained some respect on Friday, up $35 to close out the week at $1,964.83. Since peaking at $2,063.54 on August 6, the trend has been lower, but $1900 an ounce appears to be very strong support. With supply strained and demand still very high, recent dips look more like consolidation than manipulation, even though the spot price is subservient to the eminently exploitable futures market where daily claims on precious metals often exceed a year's production. Eventually, the futures market will face an untenable situation when the punters stand for delivery of real metal rather than a paper equivalent of dollars, yen, or euros. Once the COMEX fails to deliver physical in a timely manner - a possibility that's growing increasingly worrying - it's game over for the paper markets, where the rigging has kept the true price of gold to be discovered for decades.
In order to prevent such an occurrence, the CME has been and will continue to raise margin requirements for futures trading in precious metals until none but the biggest players - central banks, bullion banks, private banks, investment and commercial banks, insurance companies, and sovereign trusts - will be able to afford the buying and selling of futures contracts. Thus, the compression of prices could continue indefinitely while physical premiums soar beyond the rooftops.
Silver also appears to be in a consolidation phase, ranging between $26.45 and $27.67 the past two weeks. It finished up Friday near the top end, at $27.50. Considering the recent smackdown sent silver from a high of $29.13 to $24.79 in the course of one day, the recent close puts the loss at less than six percent, a complete nothing-burger in the highly volatile silver market. The inability of the futures' players to keep a lid on silver indicates that the riggers are losing control. Silver's market is much smaller than gold's, and the demand for physical has bordered on a mania recently due to its affordability and monetary and commercial value.
Here are the most recent prices on eBay (shipping - often free - included) for selected items (numismatics excluded):
Item: Low / High / Average / Median
1 oz silver coin: 31.90 / 48.95 / 39.05 / 37.98
1 oz silver bar: 32.95 / 42.00 / 36.75 / 35.98
1 oz gold coin: 1,985.00 / 2,178.90 / 2,090.41 / 2,107.55
1 oz gold bar: 2,006.16 / 2,114.59 / 2,078.62 / 2,081.75
An historical survey of prices from April, 2020 to the present is available here.
Concluding this edition of the WEEKEND WRAP, a reminder: There are just 65 days until Election Day and 117 days until Christmas. With any luck, we'll all know who the president is by the time we're unwrapping presents.
At the Close, Friday, August 28, 2020:
Dow: 28,653.87, +161.60 (+0.57%)
NASDAQ: 11,695.63, +70.30 (+0.60%)
S&P 500: 3,508.01, +23.46 (+0.67%)
NYSE: 13,170.96, +102.15 (+0.78%)
For the Week:
Dow: +723.54 (+2.59%)
NASDAQ: +383.83 (+3.39%)
S&P 500: +110.85 (+3.26%)
NYSE: +261.89 (+2.83%)
Showing posts with label Jackson Hole. Show all posts
Showing posts with label Jackson Hole. Show all posts
Sunday, August 30, 2020
Tuesday, August 29, 2017
Stocks Flat, Gold, Silver, Bonds Explode Higher
Editor's Note: Money Daily is eventually going to move to its own server at dtmagazine.com, but issues implementing the blogging platform while integrating ad serving has kept the blog from being fully integrated. Thus, for the time being, until these issues resolved, the blog will appear here.
Stocks were relatively unmoved as the world's central bankers wrapped up their annual economic symposium at Jackson Hole, Wyoming over the weekend.
What did move were precious metals and bonds, both boosted by ambiguous speeches by Fed Chair, Janet Yellen, and ECB president, Mario Draghi.
Both speakers failed to address the bubbling equity markets, and instead opted for a can-kicking, all is well, "stay the course" approach. Markets were effectively unimpressed, though fixed investments saw massive gains.
The benchmark 10-year note was bid, knocking the yield down to 2.16, and to levels not seen since before last year's November elections, at 2.09% just prior to the Tuesday open.
Gold has blown through resistance at the psychologically-important $1300 level, kicking up to $1325 in early Tuesday futures trading. Silver also advanced, blasting through $17, hovering in the $17.60 range at this time.
Stock futures are down massively, setting Tuesday up for a massive downdraft.
With congress coming back to debate the debt ceiling and federal budget and the FOMC meeting in September, the final days of August appear to be presaging the volatile days and weeks ahead.
Hang on to your hats. This looks to be a wild ride.
At the Close, August 28, 2017:
Dow: 21,808.40, -5.27 (-0.02%)
NASDAQ: 6,283.02, +17.37 (+0.28%)
S&P 500: 2,444.24, +1.19 (+0.05%)
NYSE Composite: 11,800.22, -11.81 (-0.10%)
Stocks were relatively unmoved as the world's central bankers wrapped up their annual economic symposium at Jackson Hole, Wyoming over the weekend.
What did move were precious metals and bonds, both boosted by ambiguous speeches by Fed Chair, Janet Yellen, and ECB president, Mario Draghi.
Both speakers failed to address the bubbling equity markets, and instead opted for a can-kicking, all is well, "stay the course" approach. Markets were effectively unimpressed, though fixed investments saw massive gains.
The benchmark 10-year note was bid, knocking the yield down to 2.16, and to levels not seen since before last year's November elections, at 2.09% just prior to the Tuesday open.
Gold has blown through resistance at the psychologically-important $1300 level, kicking up to $1325 in early Tuesday futures trading. Silver also advanced, blasting through $17, hovering in the $17.60 range at this time.
Stock futures are down massively, setting Tuesday up for a massive downdraft.
With congress coming back to debate the debt ceiling and federal budget and the FOMC meeting in September, the final days of August appear to be presaging the volatile days and weeks ahead.
Hang on to your hats. This looks to be a wild ride.
At the Close, August 28, 2017:
Dow: 21,808.40, -5.27 (-0.02%)
NASDAQ: 6,283.02, +17.37 (+0.28%)
S&P 500: 2,444.24, +1.19 (+0.05%)
NYSE Composite: 11,800.22, -11.81 (-0.10%)
Thursday, August 25, 2016
Continued Sluggishness In Equity Markets Awaiting Janet Yellen At Jackson Hole
Investors (if that's what they're being called these days) are largely on hold in advance of Fed Chair Janet Yellen's speech at Jackson Hole tomorrow and a return to what passes for normal conditions following the Labor Day holiday.
Essentially, stocks have been treading water for the past month, since setting new all-time highs mid-July and making a double top earlier this month.
For whatever it's worth, the one bid by the Fed and its central bank allies has produced a very dull market, if that's what we're calling it these days.
Of particular note is the current odds for a rate hike in September, currently hovering around 18%. For a December rate hike, it's basically a 50-50 proposition, though neither is actually very likely considering the fragility of the global economy.
Thursday's Closing Prices:
Dow Jones Industrial Average
18,448.41, -33.07 (-0.18%)
NASDAQ Composite
5,212.20, -5.49 (-0.11%)
S&P 500
2,172.47, -2.97 (-0.14%)
NYSE Composite
10,780.23, -10.95 (-0.10%)
Essentially, stocks have been treading water for the past month, since setting new all-time highs mid-July and making a double top earlier this month.
For whatever it's worth, the one bid by the Fed and its central bank allies has produced a very dull market, if that's what we're calling it these days.
Of particular note is the current odds for a rate hike in September, currently hovering around 18%. For a December rate hike, it's basically a 50-50 proposition, though neither is actually very likely considering the fragility of the global economy.
Thursday's Closing Prices:
Dow Jones Industrial Average
18,448.41, -33.07 (-0.18%)
NASDAQ Composite
5,212.20, -5.49 (-0.11%)
S&P 500
2,172.47, -2.97 (-0.14%)
NYSE Composite
10,780.23, -10.95 (-0.10%)
Wednesday, June 19, 2013
Fed Clarifies Position on Bond Purchases; Markets Hate It
The widely-anticipated June FOMC meeting was worth the wait, as Fed Chairman Ben Bernanke and his merry bank of economic soothsayers proved once and for all that they haven't got a clue what they're doing and that the market controls their actions, not the other way around.
Key take-aways from the policy decision (unchanged) and Bernanke's press conference were that the Fed saw downside risks to the economy "diminished," and that asset purchases - given improved economic conditions (pipe dream) - the Fed would begin to unwind, or, taper, those purchases from the current monthly level of $85 billion a month by the end of this year and end them completely by the middle of 2014.
This, of course, will never happen, as economic conditions are not improving, and, even if they are, are not improving quickly enough to warrant removal of the Fed's substantial monetary stimulus.
Market reaction was a bit slow to coalesce, but when it finally got the drift of what Bernanke was saying, sold off hard, with both stocks and bonds going into the tank. The Dow suffered one of its worst days of the year, off more than 200 points, while bond yields rose to 14-month highs on the ten-year note, at 2.33% and two-year highs on the five (1.26%).
What Bernanke didn't say was almost as intriguing as what he did, refusing to comment on why he is not going to attend the annual summit at Jackson Hole, sponsored by the Kansas City Fed, or whether or not he had plans to retire when his term expires early next year, though it appears, especially after President Obama's off-the-cuff remarks to Charlie Rose two nights ago, that the Chairman's tenure is at an end.
Bernanke did make one other clarification of note, that the Fed would hold its mortgage-backed securities to maturity, rather than sell them into the secondary market. Again, what he didn't say may be notable, as the decision to hold to maturity may be predicated on these securities (some of which are toxic to some degree or another) may not have the value at which the Fed is holding, or, since the Fed is pretty much 60% or more of the entire MBS market, maybe there is no secondary market of value.
Overall, it was a constructive session on the markets, but one which, unfortunately for bulls, appears to be in furtherance of the downward trend in equities.
With today's selloff, the bias has returned to the sell side and it seems as if the smart money is getting out while the getting is good.
Dow 15,112.19, -206.04 (1.35%)
NASDAQ 3,443.20, -38.98 (1.12%)
S&P 500 1,628.93, -22.88 (1.39%)
NYSE Composite 9,255.71, -143.93 (1.53%)
NASDAQ Volume 1,698,203,375
NYSE Volume 4,021,718,750
Combined NYSE & NASDAQ Advance - Decline: 1357-5161
Combined NYSE & NASDAQ New highs - New lows: 254-125
WTI crude oil: 97.97, -0.47
Gold: 1,350.20, -16.70
Silver: 21.25, -0.427
Key take-aways from the policy decision (unchanged) and Bernanke's press conference were that the Fed saw downside risks to the economy "diminished," and that asset purchases - given improved economic conditions (pipe dream) - the Fed would begin to unwind, or, taper, those purchases from the current monthly level of $85 billion a month by the end of this year and end them completely by the middle of 2014.
This, of course, will never happen, as economic conditions are not improving, and, even if they are, are not improving quickly enough to warrant removal of the Fed's substantial monetary stimulus.
Market reaction was a bit slow to coalesce, but when it finally got the drift of what Bernanke was saying, sold off hard, with both stocks and bonds going into the tank. The Dow suffered one of its worst days of the year, off more than 200 points, while bond yields rose to 14-month highs on the ten-year note, at 2.33% and two-year highs on the five (1.26%).
What Bernanke didn't say was almost as intriguing as what he did, refusing to comment on why he is not going to attend the annual summit at Jackson Hole, sponsored by the Kansas City Fed, or whether or not he had plans to retire when his term expires early next year, though it appears, especially after President Obama's off-the-cuff remarks to Charlie Rose two nights ago, that the Chairman's tenure is at an end.
Bernanke did make one other clarification of note, that the Fed would hold its mortgage-backed securities to maturity, rather than sell them into the secondary market. Again, what he didn't say may be notable, as the decision to hold to maturity may be predicated on these securities (some of which are toxic to some degree or another) may not have the value at which the Fed is holding, or, since the Fed is pretty much 60% or more of the entire MBS market, maybe there is no secondary market of value.
Overall, it was a constructive session on the markets, but one which, unfortunately for bulls, appears to be in furtherance of the downward trend in equities.
With today's selloff, the bias has returned to the sell side and it seems as if the smart money is getting out while the getting is good.
Dow 15,112.19, -206.04 (1.35%)
NASDAQ 3,443.20, -38.98 (1.12%)
S&P 500 1,628.93, -22.88 (1.39%)
NYSE Composite 9,255.71, -143.93 (1.53%)
NASDAQ Volume 1,698,203,375
NYSE Volume 4,021,718,750
Combined NYSE & NASDAQ Advance - Decline: 1357-5161
Combined NYSE & NASDAQ New highs - New lows: 254-125
WTI crude oil: 97.97, -0.47
Gold: 1,350.20, -16.70
Silver: 21.25, -0.427
Friday, August 31, 2012
Bernanke's Jackson Speech Self-Fulfilling for Wall Street
Well, was it worth the wait?
Fed Chairman Ben Bernake delivered his speech at Jackson Hole, much to the delight, it seems, to the hordes of hungry bankers and investors wallowing around the money trough from which their riches are made.
The Chairman didn't say much, except what he always says: that the Fed would be ready to add stimulus when needed. The Wall Street parasites took this as a sure sign that more easy money, in the form of QE3, would be forthcoming, likely as of the September FOMC meeting in about two weeks.
In the meantime, stocks jumped, slumped and humped back to highs of just over 13,150 on the Dow, just in case anybody's interested heading into the long weekend.
As usual, stocks have to go higher on Friday, as they have in just about every instance since the end of May.
Anecdotally, Wall Street exhibits all the traits of wild herds, following wherever they are led, this time toward all risk assets, including stocks and commodities. It's been reported that food prices have already risen some 10-20% in poorer nations, which will eventually foment riots, panic and revolution, thoughthat doesn't matter a whit to the wizards of Wall Street or their political counterparts, Al that matters is a rising stock market, even though it may lead to the eventual destruction of the currency and the global economy to boot.
It's a sick game, with seemingly no end in sight.
Labor Day. What an odd name for a holiday. It should be called slaver day, because other than a few sporadic holidays and a week or two of annual vacation, americans and workers in the "civilized" world are nothing more than slaves to debt.
Try not to ponder that fate much over the next few days of what should be a relaxing, peaceful weekend.
Free houses for Everyone!
Dow 13,090.76, +90.05 (0.69%)
Nasdaq 3,066.96, +18.25 (0.60%)
S&P 500 1,406.57, +7.09 (0.51%)
NYSE Composite 8,014.93 +48.69(0.61%)
Combined NYSE & NASDAQ Advance - Decline: 3658-1811
Combined NYSE & NASDAQ New highs - New lows: 184-37
WTI crude oil: 96.47, +1.85
Gold: 1,687.60, +30.50
Silver: 31.37, +1.00
Fed Chairman Ben Bernake delivered his speech at Jackson Hole, much to the delight, it seems, to the hordes of hungry bankers and investors wallowing around the money trough from which their riches are made.
The Chairman didn't say much, except what he always says: that the Fed would be ready to add stimulus when needed. The Wall Street parasites took this as a sure sign that more easy money, in the form of QE3, would be forthcoming, likely as of the September FOMC meeting in about two weeks.
In the meantime, stocks jumped, slumped and humped back to highs of just over 13,150 on the Dow, just in case anybody's interested heading into the long weekend.
As usual, stocks have to go higher on Friday, as they have in just about every instance since the end of May.
Anecdotally, Wall Street exhibits all the traits of wild herds, following wherever they are led, this time toward all risk assets, including stocks and commodities. It's been reported that food prices have already risen some 10-20% in poorer nations, which will eventually foment riots, panic and revolution, thoughthat doesn't matter a whit to the wizards of Wall Street or their political counterparts, Al that matters is a rising stock market, even though it may lead to the eventual destruction of the currency and the global economy to boot.
It's a sick game, with seemingly no end in sight.
Labor Day. What an odd name for a holiday. It should be called slaver day, because other than a few sporadic holidays and a week or two of annual vacation, americans and workers in the "civilized" world are nothing more than slaves to debt.
Try not to ponder that fate much over the next few days of what should be a relaxing, peaceful weekend.
Free houses for Everyone!
Dow 13,090.76, +90.05 (0.69%)
Nasdaq 3,066.96, +18.25 (0.60%)
S&P 500 1,406.57, +7.09 (0.51%)
NYSE Composite 8,014.93 +48.69(0.61%)
Combined NYSE & NASDAQ Advance - Decline: 3658-1811
Combined NYSE & NASDAQ New highs - New lows: 184-37
WTI crude oil: 96.47, +1.85
Gold: 1,687.60, +30.50
Silver: 31.37, +1.00
Thursday, August 30, 2012
Markets Edge Closer to Reality on Eve of Bernanke Speech
As has been ongoing for the whole week, markets took a decided turn negative today on strong sentiment and comments from a few Fed governors that Ben Bernanke's speech tomorrow at Jackson Hole will include no overt nor hidden message that the Fed is ready to commit to another round of QE, bond purchases or any kind of policy easing.
That's the current betting, and there's little more than that moving markets.
Here is a good summary of what Wall Street is expecting in advance of the speech, from the Wall Street Journal, along with excerpts from analysts from leading financial institutions.
Scheduled for 10:00 am EDT, the Fed Chairman's speech, "Monetary Policy Since the Crisis" has had the markets gripped for weeks.
At the very least, by 11:00-11:30 tomorrow, everyone will have an inkling of what the Fed plans to do, if anything, and possibly when.
Then, everything can return to normal - whatever that is - after the Labor Day holiday.
Dow 13,000.71, -106.77 (0.81%)
NASDAQ 3,048.71, -32.47 (1.05%)
S&P 500 1,399.48, -11.01 (0.78%)
NYSE Composite 7,966.24, -65.41 (0.81%)
NASDAQ Volume 1,218,830,750
NYSE Volume 2,534,874,500
Combined NYSE & NASDAQ Advance - Decline: 1481-3987
Combined NYSE & NASDAQ New highs - New lows: 118-54
WTI crude oil: 94.62, -0.87
Gold: 1,657.10, -5.90
Silver: 30.37, -0.47
That's the current betting, and there's little more than that moving markets.
Here is a good summary of what Wall Street is expecting in advance of the speech, from the Wall Street Journal, along with excerpts from analysts from leading financial institutions.
Scheduled for 10:00 am EDT, the Fed Chairman's speech, "Monetary Policy Since the Crisis" has had the markets gripped for weeks.
At the very least, by 11:00-11:30 tomorrow, everyone will have an inkling of what the Fed plans to do, if anything, and possibly when.
Then, everything can return to normal - whatever that is - after the Labor Day holiday.
Dow 13,000.71, -106.77 (0.81%)
NASDAQ 3,048.71, -32.47 (1.05%)
S&P 500 1,399.48, -11.01 (0.78%)
NYSE Composite 7,966.24, -65.41 (0.81%)
NASDAQ Volume 1,218,830,750
NYSE Volume 2,534,874,500
Combined NYSE & NASDAQ Advance - Decline: 1481-3987
Combined NYSE & NASDAQ New highs - New lows: 118-54
WTI crude oil: 94.62, -0.87
Gold: 1,657.10, -5.90
Silver: 30.37, -0.47
Wednesday, August 29, 2012
Yuck. Stocks Stuck, Seek Direction from Fed. Good Luck.
News flash: Tail wags dog.
The markets continued their perverse game of chicken with the Chairman of the Federal Reserve over whether he'll offer any hints of a new round of QE, but sentiment seems to be shifting toward the argument that the chairman is not going to be very accommodative, either toward the stock market, interest rate policy or further bond purchases.
Whatever the assembled genii on Wall Street care to think, Mr. Bernanke is likely to be of the opinion that it's time for the congress to get up off their duffs and do something about the stagnating economy since the Fed - for all intents and purposes - has done what it can, albeit with limited success.
Any sane person (and we can safely assume that Bernanke hasn't gone completely off the deep end) would think that the US economy needs now to pick itself up, dust itself off and get on with business.
Were it all that simple, and, it should be, but the meddlers at the Federal Reserve and in the halls of congress have seen to it that the US - and by proxy the global - economy is largely a function of interest rates and government policy, not the vaunted free market that so many believe could work out of this malaise, if given a chance.
So, there's a chance that Bernanke will deliver what the mortal villains on Wall Street want so desperately, but the chance seems slim. Stocks would have likely risen in anticipation of golden words from the Chairman were there widespread belief that he was indeed planning on more easy money for his Wall Street buddies, because, as anyone who's ever played with stocks or options knows all too well, it's not a good idea to be late to the party.
By the time Mr. Bernanke finishes his speech at Jackson Hole, most of the major bets will already have been placed. Those who wait and see will likely suffer like the poor suckers who think investing is easy.
Stocks followed their familiar pattern again today: a stumble at the start, ramp up and sell off into the close, though the Dow managed - as all the majors did except the Comp. - to eke out a tiny gain of just over four points. Everything moved in slow motion, as volume has nearly dried up completely.
Whoopie!
Bernanke is not going to rescue Wall Street for the sake of a few hundred points on the Dow. He's done it three times already (QE1, QE2, Operation Twist) and the players keep coming back for more. It's time for the Chairman to do what's right and take the punch bowl away.
The party should have been over a while ago. Only the chutzpah of the "masters of the universe" has managed to keep it going for so long.
Dow 13,107.48, +4.49 (0.03%)
NASDAQ 3,081.19, +4.05 (0.13%)
S&P 500 1,410.49, +1.19 (0.08%)
NYSE Composite 8,031.61, -2.24 (0.03%)
NASDAQ Volume 1,253,324,130
NYSE Volume 2,534,702,500
Combined NYSE & NASDAQ Advance - Decline: 3287-2178
Combined NYSE & NASDAQ New highs - New lows: 181-45
WTI crude oil: 95.60, -0.73
Gold: 1,658.50, -11.20
Silver: 30.70, -0.17
The markets continued their perverse game of chicken with the Chairman of the Federal Reserve over whether he'll offer any hints of a new round of QE, but sentiment seems to be shifting toward the argument that the chairman is not going to be very accommodative, either toward the stock market, interest rate policy or further bond purchases.
Whatever the assembled genii on Wall Street care to think, Mr. Bernanke is likely to be of the opinion that it's time for the congress to get up off their duffs and do something about the stagnating economy since the Fed - for all intents and purposes - has done what it can, albeit with limited success.
Any sane person (and we can safely assume that Bernanke hasn't gone completely off the deep end) would think that the US economy needs now to pick itself up, dust itself off and get on with business.
Were it all that simple, and, it should be, but the meddlers at the Federal Reserve and in the halls of congress have seen to it that the US - and by proxy the global - economy is largely a function of interest rates and government policy, not the vaunted free market that so many believe could work out of this malaise, if given a chance.
So, there's a chance that Bernanke will deliver what the mortal villains on Wall Street want so desperately, but the chance seems slim. Stocks would have likely risen in anticipation of golden words from the Chairman were there widespread belief that he was indeed planning on more easy money for his Wall Street buddies, because, as anyone who's ever played with stocks or options knows all too well, it's not a good idea to be late to the party.
By the time Mr. Bernanke finishes his speech at Jackson Hole, most of the major bets will already have been placed. Those who wait and see will likely suffer like the poor suckers who think investing is easy.
Stocks followed their familiar pattern again today: a stumble at the start, ramp up and sell off into the close, though the Dow managed - as all the majors did except the Comp. - to eke out a tiny gain of just over four points. Everything moved in slow motion, as volume has nearly dried up completely.
Whoopie!
Bernanke is not going to rescue Wall Street for the sake of a few hundred points on the Dow. He's done it three times already (QE1, QE2, Operation Twist) and the players keep coming back for more. It's time for the Chairman to do what's right and take the punch bowl away.
The party should have been over a while ago. Only the chutzpah of the "masters of the universe" has managed to keep it going for so long.
Dow 13,107.48, +4.49 (0.03%)
NASDAQ 3,081.19, +4.05 (0.13%)
S&P 500 1,410.49, +1.19 (0.08%)
NYSE Composite 8,031.61, -2.24 (0.03%)
NASDAQ Volume 1,253,324,130
NYSE Volume 2,534,702,500
Combined NYSE & NASDAQ Advance - Decline: 3287-2178
Combined NYSE & NASDAQ New highs - New lows: 181-45
WTI crude oil: 95.60, -0.73
Gold: 1,658.50, -11.20
Silver: 30.70, -0.17
Tuesday, August 28, 2012
Drip... Drip... Drip... Dow Bleeds from Small Wound; NASDAQ at 11 1/2 Year High
It was the best of times, it was the worst of times...
-- Charles Dickens, A Tale of Two Cites
So it goeth... in the best Dickensian sense, the NASDAQ and Dow have diverged of late, forming an odd dichotomy, reprising the 2000-era old/new economies.
As the Dow suffered its sixth loss in the last seven sessions, the NASDAQ returned to the halcyon days of 2000, when, on its way through one of the worst crashes in market history it closed above 3100 for the last time, on November 15, 2000, on its eventual way to a bottom of 1419.23 on September 21, 2001.
So, for the NASDAQ, it is an 11-year, three month high, give or take a few days.
While the Dow is still within hailing distance of its own multi-year closing high (13279.32, May 1, 2012), it is down roughly two percent from there with losses mounting since the 68-point drop on the outside day last Tuesday.
The difference between the two indices is probably is risk assessment, or the mere fact that Apple (AAPL) is not a Dow stock. Had it been for, say, the last two years, the Dow Industrials might today be sporting a 15,000 handle, but, alas, the riggers of the Dow 30 apparently see Apple as unfit for inclusion, despite being the world's largest corporation by market cap.
The makers of the Dow components have a history of not being exactly of the genius character. For instance, Ford Motor Company has never been an elite member of the Dow club, despite a stellar record of accomplishments and great gains through the 20th century.
Whatever the case, the differences in how the averages are structured and weighted makes for interesting interplay as the stodgy Dow companies, what with their dividend-paying stocks and generally long track records, grind slowly in one direction or the other, the NASDAQ offers more high-fliers, jocular IPOs (like Facebook, Groupon and Zynga, to name just a few) and many small niche players, thus being the desired place for the sport of day-trading and point-splitting by the HFTs, hedgies and other mindless market cyborgs.
Once again, as has been the case through almost the entire month of August, there was little in the way of data or news to shake traders out of or into positions. The Case-Shiller 10-and-20-city index of home values showed another smallish year-over-year gain, though the August consumer confidence reading of 60.6 - down sharply from last month's 65.4 - did arouse some traders momentarily from their checker-playing, book-reading or whatever worthless activity keeps them in attendance these days.
After a few moments of excitement, however, they'd had enough and went back to the business of not trading, allowing the computers to do their dirty handiwork behind the scenes and away from the incessant snoring.
It was, again, quite the snooze-fest, and one has to wonder if traders will be back on their toes after the Labor Day recess or whether this kind of low-volume, low volatility regime is all part of a new normal that precludes individual investors.
There is a bit of tension over Friday's speech by Ben Bernanke at the Jackson Hole economic symposium (how anyone, and especially an army of seasoned traders, can get excited about one speech is yet another matter) and the news that ECB president Mario Draghi - citing a "heavy work load" - bowed out from attending.
We're happy that Mr Draghi is working hard at whatever he's doing, purportedly hammering out a deal with the German Bundesbank to save Europe from imminent collapse, though one might also assume attending important economic events such as Jackson Hole has come to be known, should be on his agenda.
At least Mr. Draghi has a job, something roughly 20% of Greeks, Italians and Spaniards do not. It is everyone's hope that he and other Eurocrat leaders concoct a suitable rescue plan for Europe and the rest of civilization before the world ends on December 21, according to wild-eyed gloom-and-doom types eyeing the Mayan calendar, because, if they don't, it will be too late.
Perhaps its for the best that the markets and traders take August off, like their politician friends in Washington almost always do. Wall Streeters can join congress with an approval rating of under 10%. Nearly everyone else - about 9.98% of the population - could care less.
Dow 13,102.99, -21.68 (0.17%)
NASDAQ 3,077.14, +3.95 (0.13%)
S&P 500 1,409.30, -1.14 (0.08%)
NYSE Composite 8,032.72, -3.53 (0.04%)
NASDAQ Volume 1,335,361,880
NYSE Volume 2,499,501,000
Combined NYSE & NASDAQ Advance - Decline: 3147-2303
Combined NYSE & NASDAQ New highs - New lows: 152-51
WTI crude oil: 96.33, +0.86
Gold: 1,669.70, -5.90
Silver: 30.88, -0.17
-- Charles Dickens, A Tale of Two Cites
So it goeth... in the best Dickensian sense, the NASDAQ and Dow have diverged of late, forming an odd dichotomy, reprising the 2000-era old/new economies.
As the Dow suffered its sixth loss in the last seven sessions, the NASDAQ returned to the halcyon days of 2000, when, on its way through one of the worst crashes in market history it closed above 3100 for the last time, on November 15, 2000, on its eventual way to a bottom of 1419.23 on September 21, 2001.
So, for the NASDAQ, it is an 11-year, three month high, give or take a few days.
While the Dow is still within hailing distance of its own multi-year closing high (13279.32, May 1, 2012), it is down roughly two percent from there with losses mounting since the 68-point drop on the outside day last Tuesday.
The difference between the two indices is probably is risk assessment, or the mere fact that Apple (AAPL) is not a Dow stock. Had it been for, say, the last two years, the Dow Industrials might today be sporting a 15,000 handle, but, alas, the riggers of the Dow 30 apparently see Apple as unfit for inclusion, despite being the world's largest corporation by market cap.
The makers of the Dow components have a history of not being exactly of the genius character. For instance, Ford Motor Company has never been an elite member of the Dow club, despite a stellar record of accomplishments and great gains through the 20th century.
Whatever the case, the differences in how the averages are structured and weighted makes for interesting interplay as the stodgy Dow companies, what with their dividend-paying stocks and generally long track records, grind slowly in one direction or the other, the NASDAQ offers more high-fliers, jocular IPOs (like Facebook, Groupon and Zynga, to name just a few) and many small niche players, thus being the desired place for the sport of day-trading and point-splitting by the HFTs, hedgies and other mindless market cyborgs.
Once again, as has been the case through almost the entire month of August, there was little in the way of data or news to shake traders out of or into positions. The Case-Shiller 10-and-20-city index of home values showed another smallish year-over-year gain, though the August consumer confidence reading of 60.6 - down sharply from last month's 65.4 - did arouse some traders momentarily from their checker-playing, book-reading or whatever worthless activity keeps them in attendance these days.
After a few moments of excitement, however, they'd had enough and went back to the business of not trading, allowing the computers to do their dirty handiwork behind the scenes and away from the incessant snoring.
It was, again, quite the snooze-fest, and one has to wonder if traders will be back on their toes after the Labor Day recess or whether this kind of low-volume, low volatility regime is all part of a new normal that precludes individual investors.
There is a bit of tension over Friday's speech by Ben Bernanke at the Jackson Hole economic symposium (how anyone, and especially an army of seasoned traders, can get excited about one speech is yet another matter) and the news that ECB president Mario Draghi - citing a "heavy work load" - bowed out from attending.
We're happy that Mr Draghi is working hard at whatever he's doing, purportedly hammering out a deal with the German Bundesbank to save Europe from imminent collapse, though one might also assume attending important economic events such as Jackson Hole has come to be known, should be on his agenda.
At least Mr. Draghi has a job, something roughly 20% of Greeks, Italians and Spaniards do not. It is everyone's hope that he and other Eurocrat leaders concoct a suitable rescue plan for Europe and the rest of civilization before the world ends on December 21, according to wild-eyed gloom-and-doom types eyeing the Mayan calendar, because, if they don't, it will be too late.
Perhaps its for the best that the markets and traders take August off, like their politician friends in Washington almost always do. Wall Streeters can join congress with an approval rating of under 10%. Nearly everyone else - about 9.98% of the population - could care less.
Dow 13,102.99, -21.68 (0.17%)
NASDAQ 3,077.14, +3.95 (0.13%)
S&P 500 1,409.30, -1.14 (0.08%)
NYSE Composite 8,032.72, -3.53 (0.04%)
NASDAQ Volume 1,335,361,880
NYSE Volume 2,499,501,000
Combined NYSE & NASDAQ Advance - Decline: 3147-2303
Combined NYSE & NASDAQ New highs - New lows: 152-51
WTI crude oil: 96.33, +0.86
Gold: 1,669.70, -5.90
Silver: 30.88, -0.17
Monday, August 27, 2012
Despite Big Move By Apple, Stocks Have No Monday Lift
As has been the case for many weeks (as noted in Friday's posting), stocks could simply not find any meaningful reasons to move to higher ground, even in the wake of a big move by Apple after a federal jury awarded Apple $1 billion in its patent infringement case over rival Samsung.
Apple stock hit an all-time high of 680.87 in early trading, but drifted lower throughout the session.
Veteran tape-watchers (we're fairly certain there are a few left out there) must have dozed off from another in a seemingly-endless stream of low-volume, noiseless, motion-defying trading. All but the first and last hours saw any significant action. The trading range on the Dow amounted to less than 80 points from top to bottom, with stocks selling off in the final hour and closing near the lows of the session.
Of the major averages, only the NASDAQ finished in positive territory, though it was green by only three points. The Dow was the biggest percentage loser, off 0.25% on the day.
Otherwise, there was little to no interest in equities on first day of the final unofficial week of summer, prior to the three-day Labor Day holiday.
Traders may be asleep at the switch and/or holding positions until after the holiday and Ben Bernanke's speech to the assembled central bankers and key economists at Jackson Hole on Friday.
Many on Wall Street are expecting Bernanke to signal another round of quantitative easing (QE), as he did in his 2010 speech, though skeptics of that theory abound, citing politics (the elections are nearly just two months away) and the muddled and murky economic picture as reasons the chairman of the world's largest central bank will not offer specificity in his remarks.
Additionally, ECB president Mario Draghi will present at the symposium, though his record for signaling specific policy actions are spotty at best. Draghi, as well as most European politicians, seems always to be long on rhetoric and short on delivery of specifics.
Outside of some M&A activity and Apple's move higher, the week began with a dolorous thud and will likely end that way unless Bernanke can be convinced that the time for the Fed to act - once again - is now. The high degree of uncertainty and doubt in the markets and general economy will likely keep a lid on what have to be viewed as excessively overpriced stocks and accompanying indices.
Dow 13,124.67, -33.30 (0.25%)
NASDAQ 3,073.19, +3.40 (0.11%)
S&P 500 1,410.44, -0.69 (0.05%)
NYSE Composite 8,033.93, -13.94 (0.17%)
NASDAQ Volume 1,363,789,875
NYSE Volume 2,439,756,500
Combined NYSE & NASDAQ Advance - Decline: 2676-2833
Combined NYSE & NASDAQ New highs - New lows: 162-45
WTI crude oil: 95.47, -0.68
Gold: 1,675.60, +2.70
Silver: 31.05, +0.43
Apple stock hit an all-time high of 680.87 in early trading, but drifted lower throughout the session.
Veteran tape-watchers (we're fairly certain there are a few left out there) must have dozed off from another in a seemingly-endless stream of low-volume, noiseless, motion-defying trading. All but the first and last hours saw any significant action. The trading range on the Dow amounted to less than 80 points from top to bottom, with stocks selling off in the final hour and closing near the lows of the session.
Of the major averages, only the NASDAQ finished in positive territory, though it was green by only three points. The Dow was the biggest percentage loser, off 0.25% on the day.
Otherwise, there was little to no interest in equities on first day of the final unofficial week of summer, prior to the three-day Labor Day holiday.
Traders may be asleep at the switch and/or holding positions until after the holiday and Ben Bernanke's speech to the assembled central bankers and key economists at Jackson Hole on Friday.
Many on Wall Street are expecting Bernanke to signal another round of quantitative easing (QE), as he did in his 2010 speech, though skeptics of that theory abound, citing politics (the elections are nearly just two months away) and the muddled and murky economic picture as reasons the chairman of the world's largest central bank will not offer specificity in his remarks.
Additionally, ECB president Mario Draghi will present at the symposium, though his record for signaling specific policy actions are spotty at best. Draghi, as well as most European politicians, seems always to be long on rhetoric and short on delivery of specifics.
Outside of some M&A activity and Apple's move higher, the week began with a dolorous thud and will likely end that way unless Bernanke can be convinced that the time for the Fed to act - once again - is now. The high degree of uncertainty and doubt in the markets and general economy will likely keep a lid on what have to be viewed as excessively overpriced stocks and accompanying indices.
Dow 13,124.67, -33.30 (0.25%)
NASDAQ 3,073.19, +3.40 (0.11%)
S&P 500 1,410.44, -0.69 (0.05%)
NYSE Composite 8,033.93, -13.94 (0.17%)
NASDAQ Volume 1,363,789,875
NYSE Volume 2,439,756,500
Combined NYSE & NASDAQ Advance - Decline: 2676-2833
Combined NYSE & NASDAQ New highs - New lows: 162-45
WTI crude oil: 95.47, -0.68
Gold: 1,675.60, +2.70
Silver: 31.05, +0.43
Wednesday, August 22, 2012
Stocks Split in Another Lackluster Session
There were heaps of indecision and disbelief after yesterday's rise and fall led to a stumbling session for US stocks on Wednesday, with the major indices split after a midday rally pushed the S&P and NASDAQ modestly into positive territory, but left the Dow and Composite with marginal losses.
With literally no data points on which to trade, investors were mostly in a defensive posture until FOMC minutes were released at 2:00 pm EDT. The idea that the Fed might still be considering some easing before the November elections lit a fire under some traders, though the size of the move was unconvincing.
It's unlikely that the Fed would move decisively soon unless there are overt signs of weakness in the economy to a greater degree than has already been proven. Fed Chairman Ben Bernanke and the rest of the world's elite traders, economists and analysts will gather at Jackson Hole, Wyoming, next week for an annual economic symposium, though skepticism over whether the Chairman will make any earth-shattering announcements abounds.
That is primarily what has the the bulls running for cover, because the economy has been sullen and without forward momentum, even while stocks have recorded strong gains through the summer. The entire June-August rally may have been built on false hopes and pipe dreams of another round of quantitative easing.
Without a monetary boost, stocks could suffer anything from a mild to severe correction within the next two weeks, and the charts are beginning to show signs that Tuesday's double top was something to actually be concerned about.
With little in the way of economic data this week (New and existing home sales, initial unemployment claims and durable orders), traders have little upon which to trade, so the late summer doldrums should continue, at least into the early portion of next week and possibly through Labor Day.
After that, the experts will be back on the street with new strategies or old ones, based entirely on best guesses as to the outcome of the elections and how long European leaders can keep their juggling act going without dropping all of the balls.
It's a strange state for the markets, full of uncertainty and doubt, though very close to 52-week highs. It's ripe for something - either a breakout to the upside or a 5-15% slide. And, while everyone has opinions, nobody is really putting out convincing arguments on either side.
The market bears close scrutiny at this juncture, as the next move may be decisive and worth playing, but only if one has guts and conviction to stick with trades over the next couple of months, because, as has been shown all year long, this market likes to gyrate like a lithe belly dancer without giving off any signs of where it's headed next.
Our money is on the downside, but we've been in that posture for a long time and have been in cash or equivalents for the better part of the past four years. If the precious metals continue to gather momentum, that could convince us to take a flier on some puts or shorts in selected stocks or indices. If new highs - new lows continue to compress tomorrow and the A-D line opens negative, we could be all in on Diamond (DIA) and/or Spider (SPY) October puts.
Both gold and silver have broken out of their recent ranges and could put in a long, strong run through the end of the year, so the buying opportunity window may be closing quickly on the metals, a favorable trade the past twelve years, despite persistent meddling and price fixing by major and central banks.
Dow 13,172.76, -30.82 (0.23%)
NASDAQ 3,073.67, +6.41 (0.21%)
S&P 500 1,413.49, +0.32 (0.02%)
NYSE Composite 8,079.02, -3.66 (0.05%)
NASDAQ Volume 1,426,827,000
NYSE Volume 2,809,365,750
Combined NYSE & NASDAQ Advance - Decline: 2122-3396
Combined NYSE & NASDAQ New highs - New lows: 93-53 (compression)
WTI crude oil: 97.26, +0.42
Gold: 1,656.80, +16.30
Silver: 29.84, +0.28
With literally no data points on which to trade, investors were mostly in a defensive posture until FOMC minutes were released at 2:00 pm EDT. The idea that the Fed might still be considering some easing before the November elections lit a fire under some traders, though the size of the move was unconvincing.
It's unlikely that the Fed would move decisively soon unless there are overt signs of weakness in the economy to a greater degree than has already been proven. Fed Chairman Ben Bernanke and the rest of the world's elite traders, economists and analysts will gather at Jackson Hole, Wyoming, next week for an annual economic symposium, though skepticism over whether the Chairman will make any earth-shattering announcements abounds.
That is primarily what has the the bulls running for cover, because the economy has been sullen and without forward momentum, even while stocks have recorded strong gains through the summer. The entire June-August rally may have been built on false hopes and pipe dreams of another round of quantitative easing.
Without a monetary boost, stocks could suffer anything from a mild to severe correction within the next two weeks, and the charts are beginning to show signs that Tuesday's double top was something to actually be concerned about.
With little in the way of economic data this week (New and existing home sales, initial unemployment claims and durable orders), traders have little upon which to trade, so the late summer doldrums should continue, at least into the early portion of next week and possibly through Labor Day.
After that, the experts will be back on the street with new strategies or old ones, based entirely on best guesses as to the outcome of the elections and how long European leaders can keep their juggling act going without dropping all of the balls.
It's a strange state for the markets, full of uncertainty and doubt, though very close to 52-week highs. It's ripe for something - either a breakout to the upside or a 5-15% slide. And, while everyone has opinions, nobody is really putting out convincing arguments on either side.
The market bears close scrutiny at this juncture, as the next move may be decisive and worth playing, but only if one has guts and conviction to stick with trades over the next couple of months, because, as has been shown all year long, this market likes to gyrate like a lithe belly dancer without giving off any signs of where it's headed next.
Our money is on the downside, but we've been in that posture for a long time and have been in cash or equivalents for the better part of the past four years. If the precious metals continue to gather momentum, that could convince us to take a flier on some puts or shorts in selected stocks or indices. If new highs - new lows continue to compress tomorrow and the A-D line opens negative, we could be all in on Diamond (DIA) and/or Spider (SPY) October puts.
Both gold and silver have broken out of their recent ranges and could put in a long, strong run through the end of the year, so the buying opportunity window may be closing quickly on the metals, a favorable trade the past twelve years, despite persistent meddling and price fixing by major and central banks.
Dow 13,172.76, -30.82 (0.23%)
NASDAQ 3,073.67, +6.41 (0.21%)
S&P 500 1,413.49, +0.32 (0.02%)
NYSE Composite 8,079.02, -3.66 (0.05%)
NASDAQ Volume 1,426,827,000
NYSE Volume 2,809,365,750
Combined NYSE & NASDAQ Advance - Decline: 2122-3396
Combined NYSE & NASDAQ New highs - New lows: 93-53 (compression)
WTI crude oil: 97.26, +0.42
Gold: 1,656.80, +16.30
Silver: 29.84, +0.28
Friday, August 26, 2011
Bernanke Speaks, But Who's Buying the Rally?
As expected, Fed Chairman Ben Bernanke gave his highly-anticipated speech at Jackson Hole, Wyoming this morning and did not outline any further Federal Reserve policies - specifically another round of quantitative easing (QE) - that would have signaled not only a weak, struggling economy, but more easy money for bankers, stock traders and the like.
Not that money isn't easy already. The Fed, in its last policy statement earlier this month, specifically stated that they would keep federal funds rates at close to zero until the middle of 2013. In the simplest of terms, the cost of money can't get any lower than zero, so any other stimulative motions would have - as have the last two rounds of QE - essentially been throwing good money after bad.
Wall Street's reaction to the Chairman's relaxed posture on monetary policy was not unexpected, but still a bit obtuse. After falling off precipitously in early trading (the Dow registered a 200+ point loss), stocks gathered momentum, went positive and ended the day - and the week - with broad gains. The only factor missing from the upside move was volume. Today's rally, like many which preceded it during the days of QE2, was rather muffled.
Two events, an ocean apart, will likely have major impacts moving forward into Monday. The Greece rescue plan has run into some turbulence, as Greece has set terms for the level of private participation and Euro nations spar and debate collateral obligations from the Greeks, now that Finland and Austria have secured such from the Greek government.
Along the Eastern coast of the United States, shorelines were being evacuated as Hurricane Irene meanders toward the Mid-Atlantic states of South and North Carolina, Virginia, Maryland and Delaware. The sizable storm is expected to make landfall on Saturday at North Carolina's Outer Banks and proceed with a bee-line path toward the major metropolitan areas of Philadelphia, Northern New Jersey, New York and Boston.
Expected to raise water levels with a storm surge of as much as 20 feet, Irene has the potential to bring devastation to some of the most populated areas of the country.
Traders didn't seem to make much of such turbulent conditions in both the weather and the global economy. They also shrugged off the decline in the second estimate of GDP, from 1.3% to 1.0%, which was announced prior to the opening bell. The University of Michigan's consumer confidence index also rose slightly, from 54.9 to 55.7, but, like Bernanke's speech, the news seemed unimportant.
As it turned out, the major indices put in their first winning week in the last five, a hopeful sign that the averages have encountered only a correction and have not fallen back into bear market territory, even though there's quite a bit of chatter about a resumption of the recession, muted growth prospects and a subtle notion that the FOMC will announce some policy directions at their September meeting, possibly to include some form of monetary easing.
Dow 11,284.54, +134.72 (1.21%)
NASDAQ 2,479.85, +60.22 (2.49%)
S&P 500 1,176.80, +17.53 (1.51%)
NYSE Composite 7,245.82, +96.15 (1.34%)
Despite the exceedingly low volume, advancers slaughtered decliners, 5258-1302. NASDAQ new highs numbered just nine (9), with 106 making new lows. On the NYSE, there were 13 new highs, but 101 new lows. The combined totals of 22 new highs and 207 new lows continue to suggest further downside developments.
NASDAQ Volume 1,860,127,125
NYSE Volume 4,936,341,500
Oil was relatively unchanged for the second straight day, with WTI crude futures posting a gain of just seven cents, closing out the week at $85.37.
Gold roared back against the margin hikes and central bank shorting, posting a wicked gain of $56.20, boosting the price per ounce back to $1827.50. Silver continued its bounce, up 22 cents, to $41.34.
With stocks and precious metals both rising on the day, one questions which group of speculators has the market sentiment measured correctly as the two asset groups are usually polar opposites.
As long as there's more debt being created to pay back already soured debt, you can bet the gold bugs and silver eagles have it right.
Not that money isn't easy already. The Fed, in its last policy statement earlier this month, specifically stated that they would keep federal funds rates at close to zero until the middle of 2013. In the simplest of terms, the cost of money can't get any lower than zero, so any other stimulative motions would have - as have the last two rounds of QE - essentially been throwing good money after bad.
Wall Street's reaction to the Chairman's relaxed posture on monetary policy was not unexpected, but still a bit obtuse. After falling off precipitously in early trading (the Dow registered a 200+ point loss), stocks gathered momentum, went positive and ended the day - and the week - with broad gains. The only factor missing from the upside move was volume. Today's rally, like many which preceded it during the days of QE2, was rather muffled.
Two events, an ocean apart, will likely have major impacts moving forward into Monday. The Greece rescue plan has run into some turbulence, as Greece has set terms for the level of private participation and Euro nations spar and debate collateral obligations from the Greeks, now that Finland and Austria have secured such from the Greek government.
Along the Eastern coast of the United States, shorelines were being evacuated as Hurricane Irene meanders toward the Mid-Atlantic states of South and North Carolina, Virginia, Maryland and Delaware. The sizable storm is expected to make landfall on Saturday at North Carolina's Outer Banks and proceed with a bee-line path toward the major metropolitan areas of Philadelphia, Northern New Jersey, New York and Boston.
Expected to raise water levels with a storm surge of as much as 20 feet, Irene has the potential to bring devastation to some of the most populated areas of the country.
Traders didn't seem to make much of such turbulent conditions in both the weather and the global economy. They also shrugged off the decline in the second estimate of GDP, from 1.3% to 1.0%, which was announced prior to the opening bell. The University of Michigan's consumer confidence index also rose slightly, from 54.9 to 55.7, but, like Bernanke's speech, the news seemed unimportant.
As it turned out, the major indices put in their first winning week in the last five, a hopeful sign that the averages have encountered only a correction and have not fallen back into bear market territory, even though there's quite a bit of chatter about a resumption of the recession, muted growth prospects and a subtle notion that the FOMC will announce some policy directions at their September meeting, possibly to include some form of monetary easing.
Dow 11,284.54, +134.72 (1.21%)
NASDAQ 2,479.85, +60.22 (2.49%)
S&P 500 1,176.80, +17.53 (1.51%)
NYSE Composite 7,245.82, +96.15 (1.34%)
Despite the exceedingly low volume, advancers slaughtered decliners, 5258-1302. NASDAQ new highs numbered just nine (9), with 106 making new lows. On the NYSE, there were 13 new highs, but 101 new lows. The combined totals of 22 new highs and 207 new lows continue to suggest further downside developments.
NASDAQ Volume 1,860,127,125
NYSE Volume 4,936,341,500
Oil was relatively unchanged for the second straight day, with WTI crude futures posting a gain of just seven cents, closing out the week at $85.37.
Gold roared back against the margin hikes and central bank shorting, posting a wicked gain of $56.20, boosting the price per ounce back to $1827.50. Silver continued its bounce, up 22 cents, to $41.34.
With stocks and precious metals both rising on the day, one questions which group of speculators has the market sentiment measured correctly as the two asset groups are usually polar opposites.
As long as there's more debt being created to pay back already soured debt, you can bet the gold bugs and silver eagles have it right.
Thursday, August 25, 2011
Uncle Warren to the Rescue of Bank of America; Jobs Steps Down at Apple
Two luminaries of the corporate world made moves that affected the overall markets, but a couple of stocks in particular.
Late Wednesday, Apple (AAPL) founder and CEO, Steve Jobs, announced that he was, effective immediately stepping down as CEO of the company due to health reasons and will now take up duties as Chairman of the Board.
Jobs' contributions to computing and high tech in general are the stuff of legend. Not since the heyday of Thomas Edison has the world been so influenced by one man's innovations. Jobs was a pioneer in personal computing and communications, first, with the Apple I and II, then the Macintosh, and more recently, the creation of the iPod, iPhone and iPad.
While Jobs will still have a hand in the operation of the company he founded in Cupertino, California (where it is still headquartered today) in 1976, most of the day-to-day operations will be left to newly-named CEO, Tim Cook and his staff.
Today, amid a firestorm of controversy concerning the fiscal health of Bank of America, billionaire Warren Buffett stepped up and injected $5 billion into the bank via a private offering which will net one of the world's richest men a 6% dividend over five years.
Buffett's holding company, Berkshire Hathaway, also received warrants to buy 700 million shares of common stock at just over $7.14 per share, with an unusually long 10-year exercise period.
The deal answers the question of whether Bank of America (BAC) was indeed in need of additional liquidity with a resounding "yes." Otherwise, Buffett's offer would have been turned down, as it is somewhat expensive for the bank.
The deal really solves none of BofA's liquidity and solvency issues. They are highly-levered, beset on all sides by the mortgage mess that has evolved since their purchase of Countrywide Financial in 2008, and in need of funds to meet new capital requirements. A paltry $5 billion from a rich uncle isn't going to cut it, and Buffett's bold maneuver may turn out to be another bad bet. Buffett made similar deals at the height of the financial crisis, taking out stakes in Goldman Sachs (GS) and General Electric (GE).
Inital reactions to both events were highly-charged. Apple stock fell nearly 7% in after hours trading on Wednesday, but, by the market close on Thursday, the stock was only down 2.46, or less than 1%.
On the news of Buffett's investment, Bank of America stock spiked as high as 8.80, after closing Wednesday at 6.99. At the end of the Thursday session, most of the froth had been sold off, with the nation's largest bank by deposits closing at 7.65, nearly a 10% gain.
The broader market fared less well, putting an end to the three-day winning streak which began on Monday. Uncertainty over just what Fed Chairman Ben Bernanke will say in his Friday morning speech at Jackson Hole had traders on the edge of their seats, with many deciding to take a wait-and-see position.
Bernanke is scheduled to give his keynote address at 10:00 am EDT.
On Friday morning, prior to the Chairman's speech, the government will announce its second estimate of second quarter GDP, which is expected to be revised down to 1.0% after the initial reading of 1.3%.
Most analysts are not expecting Bernanke to make any great policy pronouncements, though some are still clinging to hopes that he will announce another round of quantitative easing.
For the most part, traders were selling off positions in advance of the speech.
Dow 11,149.82, -170.89 (1.51%)
NASDAQ 2,419.63, -48.06 (1.95%)
S&P 500 1,159.27, -18.33 (1.56%)
NYSE Composite 7,149.67, -123.46 (1.70%)
In a broad retreat, declining issues outpaced advancers, 5044-1552. The NASDAQ had just eight (8) stocks making new highs, with 65 hitting new lows. Over at the NYSE, there were 14 new highs and 53 new lows. The combined total of 22 new highs and 118 new lows continues to signal risk to the downside. Volume was light.
NASDAQ Volume 1,812,493,625
NYSE Volume 5,741,944,000
Oil gained 14 cents, to $85.30. Gold, in a dramatic reversal, picked up $22.20, to $1773.50, but silver was the big winner, adding $1.39, to $41.08.
Despite Buffett's "calming effect" markets are still very shaky, as none of the issues which ignited the volatility of the past two weeks have been resolved. Bernanke's speech will likely only add some fuel to the fire, especially if, as many believe, he will not open the door to QE3. On top of all that, Wall Street is bracing for a water-logged Monday, as Hurricane Irene races along the US Eastern seaboard.
The outlook for days and weeks ahead is still quite uncertain.
Late Wednesday, Apple (AAPL) founder and CEO, Steve Jobs, announced that he was, effective immediately stepping down as CEO of the company due to health reasons and will now take up duties as Chairman of the Board.
Jobs' contributions to computing and high tech in general are the stuff of legend. Not since the heyday of Thomas Edison has the world been so influenced by one man's innovations. Jobs was a pioneer in personal computing and communications, first, with the Apple I and II, then the Macintosh, and more recently, the creation of the iPod, iPhone and iPad.
While Jobs will still have a hand in the operation of the company he founded in Cupertino, California (where it is still headquartered today) in 1976, most of the day-to-day operations will be left to newly-named CEO, Tim Cook and his staff.
Today, amid a firestorm of controversy concerning the fiscal health of Bank of America, billionaire Warren Buffett stepped up and injected $5 billion into the bank via a private offering which will net one of the world's richest men a 6% dividend over five years.
Buffett's holding company, Berkshire Hathaway, also received warrants to buy 700 million shares of common stock at just over $7.14 per share, with an unusually long 10-year exercise period.
The deal answers the question of whether Bank of America (BAC) was indeed in need of additional liquidity with a resounding "yes." Otherwise, Buffett's offer would have been turned down, as it is somewhat expensive for the bank.
The deal really solves none of BofA's liquidity and solvency issues. They are highly-levered, beset on all sides by the mortgage mess that has evolved since their purchase of Countrywide Financial in 2008, and in need of funds to meet new capital requirements. A paltry $5 billion from a rich uncle isn't going to cut it, and Buffett's bold maneuver may turn out to be another bad bet. Buffett made similar deals at the height of the financial crisis, taking out stakes in Goldman Sachs (GS) and General Electric (GE).
Inital reactions to both events were highly-charged. Apple stock fell nearly 7% in after hours trading on Wednesday, but, by the market close on Thursday, the stock was only down 2.46, or less than 1%.
On the news of Buffett's investment, Bank of America stock spiked as high as 8.80, after closing Wednesday at 6.99. At the end of the Thursday session, most of the froth had been sold off, with the nation's largest bank by deposits closing at 7.65, nearly a 10% gain.
The broader market fared less well, putting an end to the three-day winning streak which began on Monday. Uncertainty over just what Fed Chairman Ben Bernanke will say in his Friday morning speech at Jackson Hole had traders on the edge of their seats, with many deciding to take a wait-and-see position.
Bernanke is scheduled to give his keynote address at 10:00 am EDT.
On Friday morning, prior to the Chairman's speech, the government will announce its second estimate of second quarter GDP, which is expected to be revised down to 1.0% after the initial reading of 1.3%.
Most analysts are not expecting Bernanke to make any great policy pronouncements, though some are still clinging to hopes that he will announce another round of quantitative easing.
For the most part, traders were selling off positions in advance of the speech.
Dow 11,149.82, -170.89 (1.51%)
NASDAQ 2,419.63, -48.06 (1.95%)
S&P 500 1,159.27, -18.33 (1.56%)
NYSE Composite 7,149.67, -123.46 (1.70%)
In a broad retreat, declining issues outpaced advancers, 5044-1552. The NASDAQ had just eight (8) stocks making new highs, with 65 hitting new lows. Over at the NYSE, there were 14 new highs and 53 new lows. The combined total of 22 new highs and 118 new lows continues to signal risk to the downside. Volume was light.
NASDAQ Volume 1,812,493,625
NYSE Volume 5,741,944,000
Oil gained 14 cents, to $85.30. Gold, in a dramatic reversal, picked up $22.20, to $1773.50, but silver was the big winner, adding $1.39, to $41.08.
Despite Buffett's "calming effect" markets are still very shaky, as none of the issues which ignited the volatility of the past two weeks have been resolved. Bernanke's speech will likely only add some fuel to the fire, especially if, as many believe, he will not open the door to QE3. On top of all that, Wall Street is bracing for a water-logged Monday, as Hurricane Irene races along the US Eastern seaboard.
The outlook for days and weeks ahead is still quite uncertain.
Wednesday, August 24, 2011
The Chairman and His Golden Stick
Stocks took the path of least resistance on a lazy Wednesday afternoon, rising gently most of the day as investors, traders and analysts await the all-important speech from Fed Chairman Ben Bernanke at the Jackson Hole confab on Friday.
Last year, Jackson Hole was the scene for the chairman's announcement of QE2, and many in the financial community are expecting a repeat performance, though considering how the markets have behaved this week - gaining in a somewhat orderly fashion - those who believe Bernanke will embark on further money printing may, in fact, be disappointed.
Since QE2 didn't work very well and created a rash of inflation in many commodities, and while most banks have pretty much stabilized their balance sheets over the past two-and-a-half years, there may not be a need for further stimulus. Besides, QE1, 2, and all the rest of the Fed-inspired fixes didn't put Americans back to work, nor solve the housing decline.
So, this little ramp up on the prospects of more easy money (isn't money easy enough already, with the 10-year note below 2.5%?) may be a serious head fake.
Dow 11,320.71, +143.95 (1.29%)
NASDAQ 2,467.69, +21.63 (0.88%)
S&P 500 1,177.60, +15.25 (1.31%)
NYSE Composite 7,273.13, +63.54 (0.88%)
Advancing issues smothered decliners, 4272-2269. There were 7 new highs and 54 new lows on the NASDAQ, and 16 new highs with 31 new lows on the NYSE, making the combined total 23 new highs and 85 new lows, still a slightly negative bias. Volume was lame, back to mid-summer levels.
NASDAQ Volume 1,859,268,750.00
NYSE Volume 5,275,260,000
WTI crude oil dropped 28 cents, to $85.16.
The only major development of the day was the wipe-out in the price of precious metals, another signal that Bernanke may not be plotting the further destruction of the dollar with more quantitative easing.
Gold was pounded down with incredible speed, losing $67.90, to $1761.30. Silver got whacked as well, dropping $2.10, to $39.70. Margin hikes and the departure of hot money (profit-taking) caused the steep sell-off.
One commentator put it into perspective, saying, "gold should go back to being a store of value, instead of a risk asset played for quick profit."
Following yesterday's late afternoon exchange over the future prospects of the Bank of America, I actually laid out a strategy on a message thread over at another financial blog. Here, in all it's simple glory, is my strategy for the next six to eight weeks:
Last year, Jackson Hole was the scene for the chairman's announcement of QE2, and many in the financial community are expecting a repeat performance, though considering how the markets have behaved this week - gaining in a somewhat orderly fashion - those who believe Bernanke will embark on further money printing may, in fact, be disappointed.
Since QE2 didn't work very well and created a rash of inflation in many commodities, and while most banks have pretty much stabilized their balance sheets over the past two-and-a-half years, there may not be a need for further stimulus. Besides, QE1, 2, and all the rest of the Fed-inspired fixes didn't put Americans back to work, nor solve the housing decline.
So, this little ramp up on the prospects of more easy money (isn't money easy enough already, with the 10-year note below 2.5%?) may be a serious head fake.
Dow 11,320.71, +143.95 (1.29%)
NASDAQ 2,467.69, +21.63 (0.88%)
S&P 500 1,177.60, +15.25 (1.31%)
NYSE Composite 7,273.13, +63.54 (0.88%)
Advancing issues smothered decliners, 4272-2269. There were 7 new highs and 54 new lows on the NASDAQ, and 16 new highs with 31 new lows on the NYSE, making the combined total 23 new highs and 85 new lows, still a slightly negative bias. Volume was lame, back to mid-summer levels.
NASDAQ Volume 1,859,268,750.00
NYSE Volume 5,275,260,000
WTI crude oil dropped 28 cents, to $85.16.
The only major development of the day was the wipe-out in the price of precious metals, another signal that Bernanke may not be plotting the further destruction of the dollar with more quantitative easing.
Gold was pounded down with incredible speed, losing $67.90, to $1761.30. Silver got whacked as well, dropping $2.10, to $39.70. Margin hikes and the departure of hot money (profit-taking) caused the steep sell-off.
One commentator put it into perspective, saying, "gold should go back to being a store of value, instead of a risk asset played for quick profit."
Following yesterday's late afternoon exchange over the future prospects of the Bank of America, I actually laid out a strategy on a message thread over at another financial blog. Here, in all it's simple glory, is my strategy for the next six to eight weeks:
While not exactly ludicrous, a JPM takeover of BAC is a long shot. I would be more inclined to see a Latin American or Far East involvement in a forced sale, liquidation or major buyout. Gotta figure that there's real money out there in less-developed nations who might see a move into BAC as a nice grab, maybe even China, as a hedge against their ugly UST position.
Since the rumor mill is so strong and the denials even more pronounced than ever, it looks like a matter of less than a month we'll see BAC taken out. It's been in the plans for a long time. Everybody from Bernanke on down knew CW was crap, Merrill was another boatload of shit and they'd throw money into it until it no longer made economic sense.
That said, look for major volatility (the VIX is still around 40 last I checked) beginning with Bernanke's non-eventful Jackson Hole speech and continuing through October.
The timeline goes something like:
Friday, Aug. 26 - Bernanke offers no QE, markets sell off, Dow down 300.
Monday, Aug. 29 - More fear, but some stability into end of day.
Friday. Sept. 2 - With a three-day weekend ahead and another poor jobs report behind (range: -25K - +35K NFP) nobody wants to hold, sell off, Dow -200-400 points.
After that it just gets worse as BAC is destroyed, Europe goes through another round of crisis, sending markets lower.
My personal positions haven't changed in four years. I'm out of everything except cash, silver and tools of trades. However, I am strongly considering a short market position, my favorite trade being the DIA, which tracks the Dow.
I see Dow 10,200 by October 5 at the latest, confirming a bear market. So, I'm seriously considering putting on some OCT DIA 102 and/or 98 puts before Friday. May even consider SPY puts on more volatility.
I seldom make calls, but this one is lining up nicely for late summer - early fall carnage.
Friday, August 27, 2010
Did Bernanke Speech Spark a Rally?
Fed Chair Ben Bernanke delivered a keynote address to the attendees at Jackson Hole, Wyoming, the annual con-fab of economic and political elitists who have gathered to discuss and dissect the global economy.
Stocks were up in the first half hour of trading as the revision to second quarter GDP had come in a little better than some had expected, down to only 1.6% growth, lopping off nearly a full percentage point from the initial 2.4% figure. Immediately upon reaching the podium, however, Bernanke's mere presence sent stocks into a tailspin, right at 10:00 am, odd, in that no words had left the chairman's lips, though text of the speech had been widely distributed by then.
Were insiders shocked at what was contained in the speech? Probably not. The dramatic move to the downside was probably the work of a few well-timed large sellers working in concert, which they have been known to do. Within minutes, stocks began thrusting forward, sparking a sizable rally that lasted the length of the session.
As to whether the move was a response to what Ben Bernanke told the assemblage of high muckety-mucks in the wilderness will probably be the story of the day, though it probably had about as much to do with stock movement as whether Drew Barrymore and Justin Long will remain a couple (odds say they're split up by the third week in September).
No, today's outstanding rally in equities was once again nothing more than pure unbridled market manipulation by large firms seeking quick turnaround profits. One can note with ease the smashing decline and quick rebound off the morning's V-shaped bottom as a sign that adept traders sent indices hard lower, loaded up and then bought incrementally, stringing along the sheepish followers.
In a day to two the same shrewd buyers at the bottom will be sellers at or near the top. Once their round-trip trade has concluded, it will be back to the usual down-up-down pattern that has persisted for the better part of the year. Bernanke said little in his speech to assuage fears and nothing to tip the hand for future Federal Reserve policy decisions.
The entire text of the chairman's mind-numbingly boring riposte can be found here.
Dow 10,150.65, +164.84 (1.65%)
NASDAQ 2,153.63, +34.94 (1.65%)
S&P 500 1,064.59, +17.37 (1.66%)
NYSE Composite 6,794.91, +129.65 (1.95%)
The result of the Wall Street's one-day wonder was for advancers to eclipse declining issues by a wide margin, 4876-877 and new highs to vault past new lows, 247-156, once more. Again on the light side, volume spoke loudest.
NASDAQ Volume 2,169,648,250
NYSE Volume 4,295,823,500
This is absolutely the most rigorous of trader's markets, or, putting it more succinctly, Wall Street has completely devolved into a casino in which the house (represented by the major insider brokerages and trading firms) makes up rules on the fly, the dice are loaded, decks stacked and the roulette wheel is built on an adjustable ramp.
Small investors and those outside the loop are certain to become fodder for the big feeders.
While stocks were soaring the precious metals were left to linger. Gold gained only 60 cents, closing at $1,236.00, while silver added 6 cents, to $19.04. As one might expect, crude oil was the big winner, ramping up $1.81, to $75.17, its highest price of the week.
One makes choices in his or her life, of whether to believe in systems which have proven to be easily manipulated and difficult to comprehend, or to trust what one sees and hears and judge for oneself. Anybody believing today's rally was significant and a sign of better days ahead surely belongs in that former camp.
The rest of us still aren't buying into the "happy days" argument.
Stocks were up in the first half hour of trading as the revision to second quarter GDP had come in a little better than some had expected, down to only 1.6% growth, lopping off nearly a full percentage point from the initial 2.4% figure. Immediately upon reaching the podium, however, Bernanke's mere presence sent stocks into a tailspin, right at 10:00 am, odd, in that no words had left the chairman's lips, though text of the speech had been widely distributed by then.
Were insiders shocked at what was contained in the speech? Probably not. The dramatic move to the downside was probably the work of a few well-timed large sellers working in concert, which they have been known to do. Within minutes, stocks began thrusting forward, sparking a sizable rally that lasted the length of the session.
As to whether the move was a response to what Ben Bernanke told the assemblage of high muckety-mucks in the wilderness will probably be the story of the day, though it probably had about as much to do with stock movement as whether Drew Barrymore and Justin Long will remain a couple (odds say they're split up by the third week in September).
No, today's outstanding rally in equities was once again nothing more than pure unbridled market manipulation by large firms seeking quick turnaround profits. One can note with ease the smashing decline and quick rebound off the morning's V-shaped bottom as a sign that adept traders sent indices hard lower, loaded up and then bought incrementally, stringing along the sheepish followers.
In a day to two the same shrewd buyers at the bottom will be sellers at or near the top. Once their round-trip trade has concluded, it will be back to the usual down-up-down pattern that has persisted for the better part of the year. Bernanke said little in his speech to assuage fears and nothing to tip the hand for future Federal Reserve policy decisions.
The entire text of the chairman's mind-numbingly boring riposte can be found here.
Dow 10,150.65, +164.84 (1.65%)
NASDAQ 2,153.63, +34.94 (1.65%)
S&P 500 1,064.59, +17.37 (1.66%)
NYSE Composite 6,794.91, +129.65 (1.95%)
The result of the Wall Street's one-day wonder was for advancers to eclipse declining issues by a wide margin, 4876-877 and new highs to vault past new lows, 247-156, once more. Again on the light side, volume spoke loudest.
NASDAQ Volume 2,169,648,250
NYSE Volume 4,295,823,500
This is absolutely the most rigorous of trader's markets, or, putting it more succinctly, Wall Street has completely devolved into a casino in which the house (represented by the major insider brokerages and trading firms) makes up rules on the fly, the dice are loaded, decks stacked and the roulette wheel is built on an adjustable ramp.
Small investors and those outside the loop are certain to become fodder for the big feeders.
While stocks were soaring the precious metals were left to linger. Gold gained only 60 cents, closing at $1,236.00, while silver added 6 cents, to $19.04. As one might expect, crude oil was the big winner, ramping up $1.81, to $75.17, its highest price of the week.
One makes choices in his or her life, of whether to believe in systems which have proven to be easily manipulated and difficult to comprehend, or to trust what one sees and hears and judge for oneself. Anybody believing today's rally was significant and a sign of better days ahead surely belongs in that former camp.
The rest of us still aren't buying into the "happy days" argument.
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