Sure, the economy is just fine.
That's what the pundits on Bloomberg and CNBC would have you believe.
So, if everything is so darn good, why is Macy's - which has over 700 stores in the US - closing 40 stores and laying off 4,500 employees?
And why did the NASDAQ and the Dow close the day in correction territory (down 10% from high) today, with the S&P not far off?
People who host shows and are guests on TV want you to believe it's all China's fault. Over on mainland China, their stock markets closed early for the second time this year. That's twice in four days that circuit breakers have been triggered. A 7% selloff causes the market to shut down. Those are their rules. Or, rather, those were their rules.
Early in the US session, Chinese authorities announced that they were suspending the circuit-breaker rule, so their stock markets may fall a lot deeper tomorrow than a mere 7% before everything in the People's Republic goes down the drain.
It's not China's fault. It's the fault of the Fed, the government (for looking the other way and accepting bribes from corporations and banks), and the greed of Wall Street. It's also the fault of smart people taking their money out of the rigged casino, aka Wall Street, before it all vanishes, like it did in 2000, or 2008.
Also, Yahoo! is laying off 1000 employees as part of their reorganization plan. One employee that isn't being let go, but should, is CEO Marissa Mayer, of whom Money Daily said years ago was nothing but a wannabe, a poser, with no measurable skills for running a company.
Yes, the economy is not good, Wall Street and the government is run by a gang of crooks, and, incidentally, those highly-paid CEOs, like Ms. Mayer, should be in bread lines with the rest of the people being let go, because they're incompetent.
America, a once-great country, is going down the tubes, and in a big hurry. The culprit is not some foreign entity, terrorism, guns or aliens. The reasons can be found all over the country. Greedy lawyers, greedier bankers, corrupt government officials, incompetent business leaders, and, interwoven into the fabric of this country, placid, placated, ill-educated, preoccupied, self-engrossed people who vote (or don't) in elections and think they've done their part are all part of the problem, and not part of the solution.
But, people could be the solution. If people stopped making poor decisions, stopped listening to people in authority positions, and started taking responsibility for their own lives, rather than hoping for handouts from an uncle sugar government, people could solve their problems on their own.
The concept of self-reliance has been largely lost in America, but, herms hoping it's going to make a comeback when people wise up to the antics of politicians who don't deliver on their promises and kick them to the curb, where they belong.
There are lots of problems in this country that people could solve on their own if they took charge of their own lives. That, truthfully, may be asking for too much. We've wasted too much time in this country and waited too long for the governing class to do the right thing. Now, it may be too late, and we'll all just have to fend for ourselves.
Actually, that may not be too bad a thing.
The day on wall Street was not pretty, with major indices taking a third huge loss in four days. The Dow Industrials are down nearly 1000 points so far this year, putting 2016 already 6% in the red for even the safest stocks. Averages were lower all day, with no signs of rallies, and, perhaps more telling than anything, there was no snap-back at 3:30 on short covering, which has been the norm of late.
As noted by the quotes below, WTI crude oil finished with a 33 handle, a number not seen in the oil pits in 12 years. Gold and silver have broken out of moribund ranges, though holding and advancing from these levels may be difficult, as central banks collude to keep currency that may compete with the almighty dollar, euro or yen at undesirable levels.
What's undeniable about the gold and silver rigging is that it is unsustainable long-term, though central banks and their henchmen in the COMEX have managed to keep sending the prices of precious metals lower for nearly five full years. With stocks potentially falling out of favor, bonds, cash and PMs may appear to be the best bets with which to ride out a currency storm, a scenario that could be occurring in real time as the dollar/yen carry trade continues to unwind.
There is chaos everywhere, and, for the final trading day of the new year's first week, two important developments will be how the Chinese markets fare and US non-farm payroll data for December, due for release at 8:30 am ET.
Closing prices for Thursday, January 7, 2016
S&P 500: 1,943.09, -47.17 (2.37%)
Dow: 16,514.10, -392.41 (2.32%)
NASDAQ, 4,689.43, -146.34 (3.03%)
Crude Oil 33.21 -2.24% Gold 1,109.20 +1.58% EUR/USD 1.0929 +1.41% 10-Yr Bond 2.1530 -1.10% Corn 352.00 -0.35% Copper 2.02 -3.16% Silver 14.32 +2.50% Natural Gas 2.37 +4.46% Russell 2000 1,064.57 -2.72% VIX 24.99 +21.37% BATS 1000 20,761.26 -2.29% GBP/USD 1.4618 -0.05% USD/JPY 117.5480 -0.80%
Showing posts with label bear market. Show all posts
Showing posts with label bear market. Show all posts
Thursday, January 7, 2016
Monday, December 14, 2015
Is a Global Recession Just Ahead, or, A Global Depression?
Gas prices at the pump haven't been this low since 2009, though the prices back then maintained for a very brief time, as oil plummeted during the financial crisis (remember that?), but quickly rebounded as the Fed and other central banks added extreme amounts of liquidity to markets globally and before long, crude oil was back in the $90-100/barrel range.
Last year, the price of a barrel of crude - both Brent and WTI - began a precipitous decline, cutting in half the traded price. As 2014 turned to 2015 and many culprits were blamed (Saudi Arabia, US frackers, Russia(?), the price continued to hover in the $45-65 range. By late summer, all bets were off as the price of a barrel of crude fell into the low-$40 range, and then this month declined into the 30s.
While gas at $2/gallon and lower is a boon for drivers, especially in the US, where commuters and businesses were burdened with gas above $3.00 and sometimes over $4/gallon for years, it's not such a great deal for oil producers, especially the aforementioned frackers, whose marginal profitable price per barrel was estimated at somewhere between $45 and $75 per barrel.
Plenty of rigs have gone idle, but debt has to be serviced, and most of these drillers are on the hook for millions, borrowed from banks when the getting was good, now having to pay back the costs of exploration, drilling and extraction while operating at a loss.
The oil patch is just one element of the global liquidity crunch which may be about to enter a new, more dangerous phase, when, in two days time, the FOMC of the Federal Reserve is supposed to raise the federal funds rate for the first time in more than seven years.
The Fed plans to set the rate at 0.25% for money banks can borrow from the Fed, and, while that may not sound like a big deal to most, it certainly is to banks and corporations, which have been borrowing and spending at record paces since mid-2009.
With the FOMC rate policy decision now less than 48 hours away, there's a growing nervousness on Wall Street over this unprecedented move by the Fed. It's unprecedented because there's a vast amount of evidence that the bubble the Fed has blown is about to be not only pricked, but popped and blown wide open. Simply put, the party is about to end, and the drunks on the dance floor will be looking for a ride home, but nobody will be available for a safe trip, because not just the investment and corporate community, but the Fed itself, is staggering and woozy.
It may be a big, bad boogey man, like the 2000 scare, or the Mayan calendar, or those pesky asteroids which dare to come within 100,000 miles of dear planet earth. Or, it could be the real thing.
Nothing lasts forever, and, from the looks of the bond, commodity, and emerging markets, the long "recovery" and stock market rally seems to have run out of steam. Global trade is down, global GDP keeps being revised lower, US manufacturing is fading, China is becoming a basket case. It all points to reduced growth, or, in proper recession terms, negative growth.
If you're in the market, there's still a day and a half to get out, and probably more, if you can handle small losses. If you're not in the market, but still have to drive, eat, and breath, good news. In recessions and, especially, depressions, everything (except debt) is cheaper.
Hedge, buy, or sell accordingly.
--FR
Last year, the price of a barrel of crude - both Brent and WTI - began a precipitous decline, cutting in half the traded price. As 2014 turned to 2015 and many culprits were blamed (Saudi Arabia, US frackers, Russia(?), the price continued to hover in the $45-65 range. By late summer, all bets were off as the price of a barrel of crude fell into the low-$40 range, and then this month declined into the 30s.
While gas at $2/gallon and lower is a boon for drivers, especially in the US, where commuters and businesses were burdened with gas above $3.00 and sometimes over $4/gallon for years, it's not such a great deal for oil producers, especially the aforementioned frackers, whose marginal profitable price per barrel was estimated at somewhere between $45 and $75 per barrel.
Plenty of rigs have gone idle, but debt has to be serviced, and most of these drillers are on the hook for millions, borrowed from banks when the getting was good, now having to pay back the costs of exploration, drilling and extraction while operating at a loss.
The oil patch is just one element of the global liquidity crunch which may be about to enter a new, more dangerous phase, when, in two days time, the FOMC of the Federal Reserve is supposed to raise the federal funds rate for the first time in more than seven years.
The Fed plans to set the rate at 0.25% for money banks can borrow from the Fed, and, while that may not sound like a big deal to most, it certainly is to banks and corporations, which have been borrowing and spending at record paces since mid-2009.
With the FOMC rate policy decision now less than 48 hours away, there's a growing nervousness on Wall Street over this unprecedented move by the Fed. It's unprecedented because there's a vast amount of evidence that the bubble the Fed has blown is about to be not only pricked, but popped and blown wide open. Simply put, the party is about to end, and the drunks on the dance floor will be looking for a ride home, but nobody will be available for a safe trip, because not just the investment and corporate community, but the Fed itself, is staggering and woozy.
It may be a big, bad boogey man, like the 2000 scare, or the Mayan calendar, or those pesky asteroids which dare to come within 100,000 miles of dear planet earth. Or, it could be the real thing.
Nothing lasts forever, and, from the looks of the bond, commodity, and emerging markets, the long "recovery" and stock market rally seems to have run out of steam. Global trade is down, global GDP keeps being revised lower, US manufacturing is fading, China is becoming a basket case. It all points to reduced growth, or, in proper recession terms, negative growth.
If you're in the market, there's still a day and a half to get out, and probably more, if you can handle small losses. If you're not in the market, but still have to drive, eat, and breath, good news. In recessions and, especially, depressions, everything (except debt) is cheaper.
Hedge, buy, or sell accordingly.
--FR
Wednesday, October 23, 2013
Whoops. That's Why We Don't Offer Specific Investment Advice
What happened?
We thought the government was giving Wall Street the "all clear" signal to send the stock market upward and onward to all-time highs. That's why we - somewhat tongue-in-cheek - suggested buying stocks all the way through Christmas. Maybe we were getting a little ahead of ourselves.
Well, a few, not-so-funny things happened on the way to laughing all the way to the bank.
Momentum stocks are beginning to take on water as high-profile investors like Carl Icahn start cashing out of investments like Netflix. Speculative stocks like Chipolte Mexican Grill, Tesla, Facebook, LinkedIn and others have soared by more than 100% in the past year. Many came under heavy selling pressure yesterday and today.
China's largest banks tripled their debt write-offs, bracing for a full-blown implosion of their over-leveraged, over-inflated real estate market, much like the housing crash in the US from 2007 onward.
JP Morgan is close to settling another lawsuit over bad home loans (really? who cudda guessed?), this one for a mere $6 billion.
Late in the day, Bank of America was found liable for fraud on claims related to defective mortgages sold by its Countrywide unit.
Soooooooo, the major averages finished in the red. Of course, this is only one day, and it will take many more down days and confirmation of a failed rally for Money Daily to proclaim a bear market which will precipitate a crash, eventually. Timing is everything, and the final, fatal blow to the abhorrent US stock markets may not come for months or years, though 2014 is beginning to look pretty ugly.
One thing which is a positive, yet unexplained, is the collapse in the price of crude oil, which has dropped more than $10 in the past two months and about $7 in the past 10 days. With lower oil prices come - naturally - lower gas prices. It could be seasonal, though we're hoping the decline is more of a permanent one. Lord knows, car owners need a break at the pump.
Also, bonds have been rallying hard since the government got back to work, sending yields on the ten-year note down 25 bips in just the past week.
With Halloween rapidly approaching, it might be a good idea to begin getting scared in advance, thus, the frightful future of the US economy, according to John Williams of shadowstats.com in this revealing, startling interview by Greg Hunter:
BTW: We're still screwed.
Dow 15,413.33, -54.33 (0.35%)
Nasdaq 3,907.07, -22.49 (0.57%)
S&P 500 1,746.38, -8.29 (0.47%)
10-Yr Bond 2.49% 0.03
NYSE Volume 3,695,265,000
Nasdaq Volume 1,866,661,875
Combined NYSE & NASDAQ Advance - Decline: 2382-3210
Combined NYSE & NASDAQ New highs - New lows: 300-32
WTI crude oil: 96.86, -1.44
Gold: 1,334.00, -8.60
Silver: 22.62, -0.173
Corn: 442.75, +4.50
We thought the government was giving Wall Street the "all clear" signal to send the stock market upward and onward to all-time highs. That's why we - somewhat tongue-in-cheek - suggested buying stocks all the way through Christmas. Maybe we were getting a little ahead of ourselves.
Well, a few, not-so-funny things happened on the way to laughing all the way to the bank.
Momentum stocks are beginning to take on water as high-profile investors like Carl Icahn start cashing out of investments like Netflix. Speculative stocks like Chipolte Mexican Grill, Tesla, Facebook, LinkedIn and others have soared by more than 100% in the past year. Many came under heavy selling pressure yesterday and today.
China's largest banks tripled their debt write-offs, bracing for a full-blown implosion of their over-leveraged, over-inflated real estate market, much like the housing crash in the US from 2007 onward.
JP Morgan is close to settling another lawsuit over bad home loans (really? who cudda guessed?), this one for a mere $6 billion.
Late in the day, Bank of America was found liable for fraud on claims related to defective mortgages sold by its Countrywide unit.
Soooooooo, the major averages finished in the red. Of course, this is only one day, and it will take many more down days and confirmation of a failed rally for Money Daily to proclaim a bear market which will precipitate a crash, eventually. Timing is everything, and the final, fatal blow to the abhorrent US stock markets may not come for months or years, though 2014 is beginning to look pretty ugly.
One thing which is a positive, yet unexplained, is the collapse in the price of crude oil, which has dropped more than $10 in the past two months and about $7 in the past 10 days. With lower oil prices come - naturally - lower gas prices. It could be seasonal, though we're hoping the decline is more of a permanent one. Lord knows, car owners need a break at the pump.
Also, bonds have been rallying hard since the government got back to work, sending yields on the ten-year note down 25 bips in just the past week.
With Halloween rapidly approaching, it might be a good idea to begin getting scared in advance, thus, the frightful future of the US economy, according to John Williams of shadowstats.com in this revealing, startling interview by Greg Hunter:
BTW: We're still screwed.
Dow 15,413.33, -54.33 (0.35%)
Nasdaq 3,907.07, -22.49 (0.57%)
S&P 500 1,746.38, -8.29 (0.47%)
10-Yr Bond 2.49% 0.03
NYSE Volume 3,695,265,000
Nasdaq Volume 1,866,661,875
Combined NYSE & NASDAQ Advance - Decline: 2382-3210
Combined NYSE & NASDAQ New highs - New lows: 300-32
WTI crude oil: 96.86, -1.44
Gold: 1,334.00, -8.60
Silver: 22.62, -0.173
Corn: 442.75, +4.50
Wednesday, June 12, 2013
Stocks Erase Early Gains; Dow Down Three Straight for First Time in 2013
Equities took another shot to the ribs on Tuesday as bears took control of the trading.
After an initial gain of 119 points on the Dow, sentiment turned radically negative for really no apparent reason, as selling into strength became the preferred strategy after months of buying dips.
The Dow posted its first three-day losing streak of 2013, with the other major averages following suit. Today's closing numbers put the S&P and the Dow dangerously close to their 50-day moving averages: 1610 for the S&P; 14970 on the Dow, and, any troubling signs from Thursday's initial unemployment claims could shoot the averages right through support and into a proverbial no-man's land.
Trading volume was rather tepid, but losers outnumbered gainers again, by a roughly 3:1 margin. The major indices now have entered an area that is decisively below the midpoint between recent highs and lows, trending lower, as has been the mantra for most of the month of June.
The dark lining inside the silver cloud came in the form of WTI crude oil prices, which hit a three-week high.
Bias remains bearish short-term, as new lows outpaced new highs for the second straight session and are deteriorating.
Where this goes from here is anyone's guess, though most are placing their wagers toward continued weakness in stocks as interest rates bumped up slightly again today, the 10-year closing at 2.23%, but that's what makesgambling investing so interesting.
Dow 14,995.23, -126.79 (0.84%)
NASDAQ 3,400.43, -36.52 (1.06%)
S&P 500 1,612.52, -13.61 (0.84%)
NYSE Composite 9,189.42, -66.06 (0.71%)
NASDAQ Volume 1,501,521,500
NYSE Volume 3,677,878,750
Combined NYSE & NASDAQ Advance - Decline: 1675-4828
Combined NYSE & NASDAQ New highs - New lows: 129-428
WTI crude oil: 95.88, +0.50
Gold: 1,392.00, +15.00
Silver: 21.80, +0.15
After an initial gain of 119 points on the Dow, sentiment turned radically negative for really no apparent reason, as selling into strength became the preferred strategy after months of buying dips.
The Dow posted its first three-day losing streak of 2013, with the other major averages following suit. Today's closing numbers put the S&P and the Dow dangerously close to their 50-day moving averages: 1610 for the S&P; 14970 on the Dow, and, any troubling signs from Thursday's initial unemployment claims could shoot the averages right through support and into a proverbial no-man's land.
Trading volume was rather tepid, but losers outnumbered gainers again, by a roughly 3:1 margin. The major indices now have entered an area that is decisively below the midpoint between recent highs and lows, trending lower, as has been the mantra for most of the month of June.
The dark lining inside the silver cloud came in the form of WTI crude oil prices, which hit a three-week high.
Bias remains bearish short-term, as new lows outpaced new highs for the second straight session and are deteriorating.
Where this goes from here is anyone's guess, though most are placing their wagers toward continued weakness in stocks as interest rates bumped up slightly again today, the 10-year closing at 2.23%, but that's what makes
Dow 14,995.23, -126.79 (0.84%)
NASDAQ 3,400.43, -36.52 (1.06%)
S&P 500 1,612.52, -13.61 (0.84%)
NYSE Composite 9,189.42, -66.06 (0.71%)
NASDAQ Volume 1,501,521,500
NYSE Volume 3,677,878,750
Combined NYSE & NASDAQ Advance - Decline: 1675-4828
Combined NYSE & NASDAQ New highs - New lows: 129-428
WTI crude oil: 95.88, +0.50
Gold: 1,392.00, +15.00
Silver: 21.80, +0.15
Wednesday, June 5, 2013
Stocks Clipped; Maybe Bad News isn't So Good After All
This was a bit of a shakeout. There was no late rally to save the day, nor was there - oddly enough - any talk of tapering by Fed officials.
No, today was just one of those days that the market had a good look in the mirror and didn't like what it was seeing. Smart money is already out of the equity markets, but the dumb money will probably be looking to buy the dip, as has been the modus operandi for the past four-years.
It was mentioned here yesterday that this appeared to be an opportune time to go to cash or go short. That call could not have been more prescient as stocks fell out of bed and continued to roll on the floor, writhing in pain the rest of the session, having the worst two days since mid-April, which, considering where the market has traversed since then, could be only the beginning of a long, deep decline.
Marketeers will blame today's selloff on poor ADP numbers and maybe the ISM Services index, both coming in with disappointing reports, but data has been trending poorly for the past two months (some say four years) and the market is just now beginning to wake up to the reality of the depression being felt across the country and around the world. Business activity has slowed in almost every sector or has not grown at any kind of solid, sustained pace for most of the past six months, all the while equities were going through the roof.
If this is the beginning of a serious correction or the end of the bull and the beginning of a bear market, today and yesterday's action was just a warm-up.
Wall Street may be blind to poor economic data for a long time, but when the selling starts and there's real money to be lost, the traders all act like herd animals, rushing for the quickest way out.
Even though volume was not magnificent, the declines speak for themselves. The Dow Jones Industrials took a 1 1/2 percent hit today and are now three percent from the top, made on May 28.
The A-D line continues to deteriorate, with today's coming in a 4-1 for the losers; new lows exceeded new highs for the first time in months. Keep an eye on that metric for more clues to where this is going.
A June swoon or a hungry bear?
Dow 14,960.59, -216.95 (1.43%)
NASDAQ 3,401.48, -43.78 (1.27%)
S&P 500 1,608.90, -22.48 (1.38%)
NYSE Composite 9,189.21, -130.88 (1.40%)
NASDAQ Volume 1,728,689,625
NYSE Volume 3,620,423,750
Combined NYSE & NASDAQ Advance - Decline: 1369-5151
Combined NYSE & NASDAQ New highs - New lows: 69-108
WTI crude oil: 93.74, +0.43
Gold: 1,398.50, +1.30
Silver: 22.47, +0.063
No, today was just one of those days that the market had a good look in the mirror and didn't like what it was seeing. Smart money is already out of the equity markets, but the dumb money will probably be looking to buy the dip, as has been the modus operandi for the past four-years.
It was mentioned here yesterday that this appeared to be an opportune time to go to cash or go short. That call could not have been more prescient as stocks fell out of bed and continued to roll on the floor, writhing in pain the rest of the session, having the worst two days since mid-April, which, considering where the market has traversed since then, could be only the beginning of a long, deep decline.
Marketeers will blame today's selloff on poor ADP numbers and maybe the ISM Services index, both coming in with disappointing reports, but data has been trending poorly for the past two months (some say four years) and the market is just now beginning to wake up to the reality of the depression being felt across the country and around the world. Business activity has slowed in almost every sector or has not grown at any kind of solid, sustained pace for most of the past six months, all the while equities were going through the roof.
If this is the beginning of a serious correction or the end of the bull and the beginning of a bear market, today and yesterday's action was just a warm-up.
Wall Street may be blind to poor economic data for a long time, but when the selling starts and there's real money to be lost, the traders all act like herd animals, rushing for the quickest way out.
Even though volume was not magnificent, the declines speak for themselves. The Dow Jones Industrials took a 1 1/2 percent hit today and are now three percent from the top, made on May 28.
The A-D line continues to deteriorate, with today's coming in a 4-1 for the losers; new lows exceeded new highs for the first time in months. Keep an eye on that metric for more clues to where this is going.
A June swoon or a hungry bear?
Dow 14,960.59, -216.95 (1.43%)
NASDAQ 3,401.48, -43.78 (1.27%)
S&P 500 1,608.90, -22.48 (1.38%)
NYSE Composite 9,189.21, -130.88 (1.40%)
NASDAQ Volume 1,728,689,625
NYSE Volume 3,620,423,750
Combined NYSE & NASDAQ Advance - Decline: 1369-5151
Combined NYSE & NASDAQ New highs - New lows: 69-108
WTI crude oil: 93.74, +0.43
Gold: 1,398.50, +1.30
Silver: 22.47, +0.063
Wednesday, May 22, 2013
Market Reverses Following Fed Minutes Release
The markets opened with ebullience after NY Fed President Bill Dudley's comments suggested that the Federal Reserve was not considering any major policy changes, with the Dow reaching the highs of the day - the Dow gaining 155 points - between 10:00 and 11:00 am EDT.
All of a sudden, when Fed Chairman, speaking before the congressional Joint Economic Committee, didn't absolutely rule out that the Fed could begin tapering bond purchases before Labor Day, stocks took an abrupt U-turn, but stabilized in positive territory.
Upon the release of minutes from the Fed's April policy meeting, however, things began to get ugly. The minutes revealed that some members of the FOMC thought they should be tapering - or easing - right away or as early as their June meeting, considering the effects of the program and how the economy seemed to have been improving.
That had a chilling effect on the trading floor, as volume picked up, and stock prices headed south in one of the most volatile sessions in some time - a full 276-point round-trip on the Dow industrials. The other major indices followed suit and actually recorded worse losses, on a percentage basis.
Today's key reversal was a triple-engulfing variety, eclipsing the highs and lows of the three previous sessions, and that, to chartists everywhere, screams of directional bias, in this case, to the downside.
Whether or not traditional chart theory will hold water in this artificial liquidity environment is anybody's guess, because stocks have shown recently an uncanny ability to disregard any kind of bad news, though this kind of news - that the Fed might be pulling back the punch bowl from the drunken, leveraged party that is Wall Street - is of a different nature altogether.
As far as bull and bear markets are concerned, we're still a far cry from calling a turn, though tomorrow, the bull's reign will be entering its 51st month and stocks have just exhibited the kind of explosive move to the upside that is indicative of final tops. The coming days, weeks and months will be critical if only to ascertain whether this move is a one-day event, the beginning of a short-term correction or the start of a bear market.
Key factors to consider in today's movement were volume - one of the highest of the year - the advance-decline line and how meaningfully traders will take the mixed messages from various Fed officials.
Another insight is how fruitless the markets have become, when the only pertinent news concerns whether or not the Fed will keep accommodating the broken banks and brokerages with historical low interest rates, which incidentally, shot higher today, the 10-year breaking through the 2.0% yield mark.
Even more important is whether the Fed is actually planning to take its foot off the gas soon or is blowing more hot air, i.e., jawboning the market.
Considering the relative performance of the US economy (sluggish at best) and the consequences of tightening policy even a little bit from this unprecedentedly-accommodative posture it might be best to take a wait-and-see attitude toward the markets in general. Rather than an abrupt, decisive move to the downside (though it could very well happen), some sideways movements in the markets would seem to make more sense, at least until there is clarity on Fed policy, along with a host of other potential market-moving issues.
Dow 15,307.17, -80.41 (0.52%)
NASDAQ 3,463.30, -38.82 (1.11%)
S&P 500 1,655.35, -13.81 (0.83%)
NYSE Composite 9,501.99, -96.28 (1.00%)
NASDAQ Volume 2,058,095,625
NYSE Volume 4,350,662,000
Combined NYSE & NASDAQ Advance - Decline: 1555-4990
Combined NYSE & NASDAQ New highs - New lows: 753-35
WTI crude oil: 94.28, -1.90
Gold: 1,367.40, -10.20
Silver: 22.47, +0.017
All of a sudden, when Fed Chairman, speaking before the congressional Joint Economic Committee, didn't absolutely rule out that the Fed could begin tapering bond purchases before Labor Day, stocks took an abrupt U-turn, but stabilized in positive territory.
Upon the release of minutes from the Fed's April policy meeting, however, things began to get ugly. The minutes revealed that some members of the FOMC thought they should be tapering - or easing - right away or as early as their June meeting, considering the effects of the program and how the economy seemed to have been improving.
That had a chilling effect on the trading floor, as volume picked up, and stock prices headed south in one of the most volatile sessions in some time - a full 276-point round-trip on the Dow industrials. The other major indices followed suit and actually recorded worse losses, on a percentage basis.
Today's key reversal was a triple-engulfing variety, eclipsing the highs and lows of the three previous sessions, and that, to chartists everywhere, screams of directional bias, in this case, to the downside.
Whether or not traditional chart theory will hold water in this artificial liquidity environment is anybody's guess, because stocks have shown recently an uncanny ability to disregard any kind of bad news, though this kind of news - that the Fed might be pulling back the punch bowl from the drunken, leveraged party that is Wall Street - is of a different nature altogether.
As far as bull and bear markets are concerned, we're still a far cry from calling a turn, though tomorrow, the bull's reign will be entering its 51st month and stocks have just exhibited the kind of explosive move to the upside that is indicative of final tops. The coming days, weeks and months will be critical if only to ascertain whether this move is a one-day event, the beginning of a short-term correction or the start of a bear market.
Key factors to consider in today's movement were volume - one of the highest of the year - the advance-decline line and how meaningfully traders will take the mixed messages from various Fed officials.
Another insight is how fruitless the markets have become, when the only pertinent news concerns whether or not the Fed will keep accommodating the broken banks and brokerages with historical low interest rates, which incidentally, shot higher today, the 10-year breaking through the 2.0% yield mark.
Even more important is whether the Fed is actually planning to take its foot off the gas soon or is blowing more hot air, i.e., jawboning the market.
Considering the relative performance of the US economy (sluggish at best) and the consequences of tightening policy even a little bit from this unprecedentedly-accommodative posture it might be best to take a wait-and-see attitude toward the markets in general. Rather than an abrupt, decisive move to the downside (though it could very well happen), some sideways movements in the markets would seem to make more sense, at least until there is clarity on Fed policy, along with a host of other potential market-moving issues.
Dow 15,307.17, -80.41 (0.52%)
NASDAQ 3,463.30, -38.82 (1.11%)
S&P 500 1,655.35, -13.81 (0.83%)
NYSE Composite 9,501.99, -96.28 (1.00%)
NASDAQ Volume 2,058,095,625
NYSE Volume 4,350,662,000
Combined NYSE & NASDAQ Advance - Decline: 1555-4990
Combined NYSE & NASDAQ New highs - New lows: 753-35
WTI crude oil: 94.28, -1.90
Gold: 1,367.40, -10.20
Silver: 22.47, +0.017
Tuesday, July 10, 2012
Cacaphony of News Events Sends Stocks Lower
Tuesday was full of news items - most of them bad - which cumulatively took US stock markets down a few notches.
In classic bear market fashion, stocks opened higher, but quickly gave up their gains - the Dow managed to tack on 103 points at the high of the day, just before 10:00 am EDT - and turned negative, where they stayed the remainder of the session, the losses accelerating into the close.
Early in the day, Italy's Prime Minister, Mario Monti, expressed an interest for his country to tap into Eurozone bailout funds, for "bond support," an option previously not mentioned as Monti tries to turn around his country's flagging economy, but prescient, as Italy's banking system is one of the weakest of European nations.
Monti's suggestive remarks blunted a broad rally on European bourses, though most managed to finish with sizable gains, his comments coming late in the trading day.
Not so fortunate were US markets, which received the dispatch around 11:00 am EDT. The first news of the week from Europe that was not all roses and Perrier sent shivers through the exchanges as investors took heed and began selling in earnest.
Italy's woes were lumped on top of news that Patriot Coal, suffering from the lowest coal prices in 24 years, due to mild winters and increased use of natural gas, filed for bankruptcy protection in Manhattan, NY. The company's bonds are under severe pressure, selling for 26-34 cents on the dollar, depending on maturity. The stock (PCX) price ended Thursday at 0.61 cents and did not trade today, though some after hours quotes have it at 0.37 cents.
Adding to the day's malaise, the city of Scranton, PA, under severe financial pressure, cut municipal employees' pay to minimum wage, $7.25 per hour, citing a need to keep costs down and raise capital.
The woes of Scranton, mythical home to the hit series, "The Office," are notable, following the bankruptcy of Pennsylvania's state capitol, Harrisburg, and other municipal bankruptcies in Stockton, California and Jackson, Mississippi.
Just adding fuel to the raft of bad news was J.C. Penny, which announced 350 job cuts at their headquarters in Plano, Texas. The retailer is attempting a turnaround after years of sluggish sales and sputtering growth, though the economic climate hasn't been very cooperative. JCP finished down 1.27, at 20.76, a share price less than half what it was just five months ago.
All of these news items, which seem to be billowing up daily, sent stocks into a tailspin, though short-covering and the PPT managed to keep the major indices from closing at their lows.
There is little doubt that the US and global economies are facing stiff headwinds from an overabundance of debt, fraud and malfeasance, which won't be easily fixed.
The trend continues to be one of losing bets on stocks while legislators sit upon their collective hands - because it's an election year - and the global, criminal banking cartel continues to skim and chip away at the edges of everybody's wealth.
How long the crisis mentality will prevail is unknown, though one has to believe that all hell is about to break loose, both in the US and Europe - to say nothing about the hard landing in China - surely to fracture before the November elections.
It's a mess, and, if you're one of the sheeple who can't see the forest for the trees, it's time to start weeding and cutting some brush. The situation worsens by the day and financial authorities have nothing to offer but more debt, piled upon heaps and loads of the stuff.
On a personal note, it is with great regret that I note the passing of Helen Mittermeyer, mother of one of my two best friends, Paul Mittermeyer.
Helen left this earth on Monday afternoon, succumbing to complications from cancer after a short illness. She leaves behind her husband, Whitey, and four children, Paul, Ann, Daniel and Cris.
Helen was a noted writer of romance novels who wrote 30 books from 1983 through 1998. In her latter years, health issues prevented her from keeping to her craft. She also penned novels under the names Ann Cristy, Hayton Monteith, and Danielle Paul.
A warm, caring, generous, outgoing person with a permanent smile and a zest for life, Helen will be missed by all.
-- Rick Gagliano
Dow 12,653.12, -83.17 (0.65%)
NASDAQ 2,902.33, -29.44 (1.00%)
S&P 500 1,341.47, -10.99 (0.81%)
NYSE Composite, 7,667.56, -68.78 (0.89%)
NASDAQ Volume 1,697,232,250.00
NYSE Volume 3,439,462,750
Combined NYSE & NASDAQ Advance - Decline: 1859-3706
Combined NYSE & NASDAQ New highs - New lows: 299-74
WTI crude oil: 83.91, -2.08
Gold: 1,579.80, -9.30
Silver: 26.88, -0.56
In classic bear market fashion, stocks opened higher, but quickly gave up their gains - the Dow managed to tack on 103 points at the high of the day, just before 10:00 am EDT - and turned negative, where they stayed the remainder of the session, the losses accelerating into the close.
Early in the day, Italy's Prime Minister, Mario Monti, expressed an interest for his country to tap into Eurozone bailout funds, for "bond support," an option previously not mentioned as Monti tries to turn around his country's flagging economy, but prescient, as Italy's banking system is one of the weakest of European nations.
Monti's suggestive remarks blunted a broad rally on European bourses, though most managed to finish with sizable gains, his comments coming late in the trading day.
Not so fortunate were US markets, which received the dispatch around 11:00 am EDT. The first news of the week from Europe that was not all roses and Perrier sent shivers through the exchanges as investors took heed and began selling in earnest.
Italy's woes were lumped on top of news that Patriot Coal, suffering from the lowest coal prices in 24 years, due to mild winters and increased use of natural gas, filed for bankruptcy protection in Manhattan, NY. The company's bonds are under severe pressure, selling for 26-34 cents on the dollar, depending on maturity. The stock (PCX) price ended Thursday at 0.61 cents and did not trade today, though some after hours quotes have it at 0.37 cents.
Adding to the day's malaise, the city of Scranton, PA, under severe financial pressure, cut municipal employees' pay to minimum wage, $7.25 per hour, citing a need to keep costs down and raise capital.
The woes of Scranton, mythical home to the hit series, "The Office," are notable, following the bankruptcy of Pennsylvania's state capitol, Harrisburg, and other municipal bankruptcies in Stockton, California and Jackson, Mississippi.
Just adding fuel to the raft of bad news was J.C. Penny, which announced 350 job cuts at their headquarters in Plano, Texas. The retailer is attempting a turnaround after years of sluggish sales and sputtering growth, though the economic climate hasn't been very cooperative. JCP finished down 1.27, at 20.76, a share price less than half what it was just five months ago.
All of these news items, which seem to be billowing up daily, sent stocks into a tailspin, though short-covering and the PPT managed to keep the major indices from closing at their lows.
There is little doubt that the US and global economies are facing stiff headwinds from an overabundance of debt, fraud and malfeasance, which won't be easily fixed.
The trend continues to be one of losing bets on stocks while legislators sit upon their collective hands - because it's an election year - and the global, criminal banking cartel continues to skim and chip away at the edges of everybody's wealth.
How long the crisis mentality will prevail is unknown, though one has to believe that all hell is about to break loose, both in the US and Europe - to say nothing about the hard landing in China - surely to fracture before the November elections.
It's a mess, and, if you're one of the sheeple who can't see the forest for the trees, it's time to start weeding and cutting some brush. The situation worsens by the day and financial authorities have nothing to offer but more debt, piled upon heaps and loads of the stuff.
On a personal note, it is with great regret that I note the passing of Helen Mittermeyer, mother of one of my two best friends, Paul Mittermeyer.
Helen left this earth on Monday afternoon, succumbing to complications from cancer after a short illness. She leaves behind her husband, Whitey, and four children, Paul, Ann, Daniel and Cris.
Helen was a noted writer of romance novels who wrote 30 books from 1983 through 1998. In her latter years, health issues prevented her from keeping to her craft. She also penned novels under the names Ann Cristy, Hayton Monteith, and Danielle Paul.
A warm, caring, generous, outgoing person with a permanent smile and a zest for life, Helen will be missed by all.
-- Rick Gagliano
Dow 12,653.12, -83.17 (0.65%)
NASDAQ 2,902.33, -29.44 (1.00%)
S&P 500 1,341.47, -10.99 (0.81%)
NYSE Composite, 7,667.56, -68.78 (0.89%)
NASDAQ Volume 1,697,232,250.00
NYSE Volume 3,439,462,750
Combined NYSE & NASDAQ Advance - Decline: 1859-3706
Combined NYSE & NASDAQ New highs - New lows: 299-74
WTI crude oil: 83.91, -2.08
Gold: 1,579.80, -9.30
Silver: 26.88, -0.56
Wednesday, June 6, 2012
Short-covering, Algo Push, Promises of Free Money Boost Stocks
Stocks were boosted globally on a combination of an HFT algo push, technical bounce, short covering and something of an unveiled promise by the ECB's Mario Draghi, Germany's Queen Angela Merkel and US print primer-in-chief, president 0-blah-blah to create more money out of thin air until all the bad stuff goes away.
Good luck with that.
The sheeple will continue to follow their leaders, nothing will really be fixed, but the sugar high will be nice... until it's not.
If anyone is entertaining the impulse to buy into this rally, be reminded that the bankrupt US banks led the way back above the 200-day moving averages on the S&P, Dow and NYSE. There are more distortions and false tops in the current market than usual, and that's saying quite a lot.
Gold got a bit of a boost, but the day's real winner was silver, closing in fast on $30/ounce.
Nothing has really changed, except the big money on Wall Street placed some short term bets on what appear to be (they're not) cheap stocks. Moves such as today's usually result in tears and pain within a small time frame. However, if every central bank in the world is going to print until they run out of ink, there could be a bit of a lift. Events may change that.
Caution is strongly advised as the correction may or may not be over. Probably the worst time to buy stocks is during a snap-back rally, especially one like this, on no news, data or earnings.
Some of the biggest gains happen within bear markets, so, be advised that we are still in a cyclical bull market ensconced by a secular bear. Profit-taking should commence within the next three trading days. After that, anybody's guess is best, dependent largely upon what Chairman Ben says to the joint committee of congress tomorrow, though our hunch is that he's already let the cat out of the bag to his henchmen on the street.
Dow 12,414.79, +286.84 (2.37%)
NASDAQ 2,844.72, +66.61 (2.40%)
S&P 500 1,315.13, +29.63 (2.30%)
NYSE Composite 7,502.04, +163.41 (2.23%)
NASDAQ Volume 1,671,509,125
NYSE Volume 4,113,058,500
Combined NYSE & NASDAQ Advance - Decline: 4818-849
Combined NYSE & NASDAQ New highs - New lows: 93-33
WTI crude oil: 85.02, +0.73
Gold: 1,634.20, +17.30
Silver: 29.49, +1.08
Good luck with that.
The sheeple will continue to follow their leaders, nothing will really be fixed, but the sugar high will be nice... until it's not.
If anyone is entertaining the impulse to buy into this rally, be reminded that the bankrupt US banks led the way back above the 200-day moving averages on the S&P, Dow and NYSE. There are more distortions and false tops in the current market than usual, and that's saying quite a lot.
Gold got a bit of a boost, but the day's real winner was silver, closing in fast on $30/ounce.
Nothing has really changed, except the big money on Wall Street placed some short term bets on what appear to be (they're not) cheap stocks. Moves such as today's usually result in tears and pain within a small time frame. However, if every central bank in the world is going to print until they run out of ink, there could be a bit of a lift. Events may change that.
Caution is strongly advised as the correction may or may not be over. Probably the worst time to buy stocks is during a snap-back rally, especially one like this, on no news, data or earnings.
Some of the biggest gains happen within bear markets, so, be advised that we are still in a cyclical bull market ensconced by a secular bear. Profit-taking should commence within the next three trading days. After that, anybody's guess is best, dependent largely upon what Chairman Ben says to the joint committee of congress tomorrow, though our hunch is that he's already let the cat out of the bag to his henchmen on the street.
Dow 12,414.79, +286.84 (2.37%)
NASDAQ 2,844.72, +66.61 (2.40%)
S&P 500 1,315.13, +29.63 (2.30%)
NYSE Composite 7,502.04, +163.41 (2.23%)
NASDAQ Volume 1,671,509,125
NYSE Volume 4,113,058,500
Combined NYSE & NASDAQ Advance - Decline: 4818-849
Combined NYSE & NASDAQ New highs - New lows: 93-33
WTI crude oil: 85.02, +0.73
Gold: 1,634.20, +17.30
Silver: 29.49, +1.08
Wednesday, September 7, 2011
The Beginning of a Bear Market
Today was yet another example of the wickedness of having computer algorithms doing what humans used to do. The momentum play was on the upside after German court ruled that Germany's participation in the bailout of Greece and other cash-strapped European nations was constitutional, meaning, for the investing class, that the party of low interest rates, cheap money and free spending without responsibility would continue on the continent without interruption from annoying laws or moral hazard.
The rest of the day-long rally in equities was the work of machines, following the momentum flow of the day.
But what do these sharp rallies really mean? Are they signs of health in US equity markets and the global economy or are they false flag events designed only to be sold off minutes, hours or days later as a bear market commences?
The answer to those questions probably lies somewhere in the recent charts of the major indices, which all show the same pattern of a sharp drop-off at the end of July, followed by a series of volatile rallies and sell-offs, leaving the indices well below their 50 and 200-day moving averages (which have all already crossed over). The high bar for markets is to get back to those July levels, which seem like distant specs on the horizon from where the market now resides.
These high water marks are roughly 12750 for the Dow, 2875 for the NASDAQ, 1350 for the S&P and 8490 for the NYSE Composite. Just take a look below to see just how far stocks would have to rally to regain those levels and your thinking about whether or not this is a good time to invest in stocks might be changed radically because if they don't get there, technicians will call this environment a sustained correction - that is until the indices fall to 20% below their highs made back at the end of April, which would then confirm a bear market.
European indices are already in bear market territory, and the sharp rallies over there are nothing more than short-covering or knee-jerk rallies that belie the true nature of the environment, which has most of Europe falling into recession in the next quarter. If Europe goes, the US will not be far behind, and some say we're already there.
So, what will it be in the coming months? Recession and a bear market (and one which could be particularly brutal) or a sustained recovery, upon which the middle class of America has been waiting nearly three years? Choose wisely.
Bear in mind that today's rally, like so many before it, was punctuated by embarrassingly low volume.
Dow 11,414.86, +275.56 (2.47%)
NASDAQ 2,548.94, +75.11 (3.04%)
S&P 500 1,198.62, +33.38 (2.86%)
NYSE Composite 7,355.17, +207.04 (2.90%)
NASDAQ Volume 1,755,357,500
NYSE Volume 4,312,856,500
Combined NYSE & NASDAQ Advance - Decline: 5655-944
Combined NYSE & NASDAQ New highs - New lows: 35-46
WTI crude oil futures: 89.33, +3.31
Gold: 1817.00, -56.60
Silver: 41.64, -0.32
Idea: Buy Gold and Silver on eBay
Unless you've been living under a rock for the past decade, you know how gold and silver have outperformed stocks and bonds and just about all other asset classes (maybe all of them), but if you are reluctant to purchase some for your own portfolio, you might take a look at eBay's offerings and do a little bit of research into why gold and silver will continue to rise as fiat currencies devalue.
One fine site n which to do some research about pre-1965 silver coins is Coinflation.com, which offers a nice selection of metals-related news and some great charts and tools to determine present and future value of mostly 90% silver coins, which just happened to be the standard way back when the US was a net exporter and a strong, growing nation.
After 1964, coinage was dramatically changed, with the percentage of silver in dimes, quarters, halves and silver dollars substantially reduced. Once you check out the values, head over to ebay and buy a few Morgans or Walking Liberties or Washington Quarters. Prices are fair and right around spot, including shipping and the sellers are 99.99% honest and fair dealers.
The rest of the day-long rally in equities was the work of machines, following the momentum flow of the day.
But what do these sharp rallies really mean? Are they signs of health in US equity markets and the global economy or are they false flag events designed only to be sold off minutes, hours or days later as a bear market commences?
The answer to those questions probably lies somewhere in the recent charts of the major indices, which all show the same pattern of a sharp drop-off at the end of July, followed by a series of volatile rallies and sell-offs, leaving the indices well below their 50 and 200-day moving averages (which have all already crossed over). The high bar for markets is to get back to those July levels, which seem like distant specs on the horizon from where the market now resides.
These high water marks are roughly 12750 for the Dow, 2875 for the NASDAQ, 1350 for the S&P and 8490 for the NYSE Composite. Just take a look below to see just how far stocks would have to rally to regain those levels and your thinking about whether or not this is a good time to invest in stocks might be changed radically because if they don't get there, technicians will call this environment a sustained correction - that is until the indices fall to 20% below their highs made back at the end of April, which would then confirm a bear market.
European indices are already in bear market territory, and the sharp rallies over there are nothing more than short-covering or knee-jerk rallies that belie the true nature of the environment, which has most of Europe falling into recession in the next quarter. If Europe goes, the US will not be far behind, and some say we're already there.
So, what will it be in the coming months? Recession and a bear market (and one which could be particularly brutal) or a sustained recovery, upon which the middle class of America has been waiting nearly three years? Choose wisely.
Bear in mind that today's rally, like so many before it, was punctuated by embarrassingly low volume.
Dow 11,414.86, +275.56 (2.47%)
NASDAQ 2,548.94, +75.11 (3.04%)
S&P 500 1,198.62, +33.38 (2.86%)
NYSE Composite 7,355.17, +207.04 (2.90%)
NASDAQ Volume 1,755,357,500
NYSE Volume 4,312,856,500
Combined NYSE & NASDAQ Advance - Decline: 5655-944
Combined NYSE & NASDAQ New highs - New lows: 35-46
WTI crude oil futures: 89.33, +3.31
Gold: 1817.00, -56.60
Silver: 41.64, -0.32
Idea: Buy Gold and Silver on eBay
Unless you've been living under a rock for the past decade, you know how gold and silver have outperformed stocks and bonds and just about all other asset classes (maybe all of them), but if you are reluctant to purchase some for your own portfolio, you might take a look at eBay's offerings and do a little bit of research into why gold and silver will continue to rise as fiat currencies devalue.
One fine site n which to do some research about pre-1965 silver coins is Coinflation.com, which offers a nice selection of metals-related news and some great charts and tools to determine present and future value of mostly 90% silver coins, which just happened to be the standard way back when the US was a net exporter and a strong, growing nation.
After 1964, coinage was dramatically changed, with the percentage of silver in dimes, quarters, halves and silver dollars substantially reduced. Once you check out the values, head over to ebay and buy a few Morgans or Walking Liberties or Washington Quarters. Prices are fair and right around spot, including shipping and the sellers are 99.99% honest and fair dealers.
Tuesday, June 7, 2011
Classic Bear Market Session Ends with Disappointment from the Chairman
There's nothing that makes a bear market more palatable than a recognizable chart pattern, and today's charts were the perfect examples.
To wit: up in the early going and down into the close, and that's exactly what the markets offered up today. There is no doubt that the bear market which began in August-October 2007 is alive and well and ready to take more money prisoner. Albeit the long interruption from March 2009 to May 2011, the long rally was nothing more than a cyclical upturn aided by trillions of dollars in free cash flow, courtesy the Federal Reserve.
Now that QE2 is coming to an abrupt end, the bears once again have their claws sharpened and are gnashing their teeth in anticipation of a tasty fete of equity fare.
Fittingly, the day ended with Fed Chairman Ben Bernanke droning on in his monotone about world economic conditions and how the Fed is powerless to do anything about the weather. Yes, he did mention the weather. In essence, his speech before the International Monetary Conference in Atlanta offered nothing to the market; there was no new policy, no mention of further stimulus. In show biz parlance, he bombed, mightily.
Stocks were up early but began selling off around 2:00 pm, wiping out all gains by the close, except in the broad NYSE composite.
It was the fifth straight decline for the Dow, S&P and NASDAQ and a sure sign of more trouble for the embattled US economy ahead.
Dow 12,070.81, -19.15 (0.16%)
NASDAQ 2,701.56, -1.00 (0.04%)
S&P 500 1,284.94, -1.23 (0.10%)
NYSE Composite 8,131.69, +15.82 (0.19%)
Advancers finished slightly ahead of losers, 3174-2454, but new highs succumbed to the downdraft of new lows. On the NASDAQ, 21 new highs, 112 new lows. The NYSE was witness to 37 new highs and 60 new lows, making to combined total 58 new highs and 172 new lows, the forth straight session in which the new lows have outnumbered new highs, and a sure sign that the market is in a correction, soon to become known as the resumption of the bear market.
Volume was scant, though that in and of itself is nothing of a surprise. It exemplifies the general weakness in equities.
NASDAQ Volume 1,861,762,125
NYSE Volume 3,681,650,000
NYMEX crude oil futures for WTI gained 8 cents, closing at $99.09. Gold lost 30 cents, to $1543.60, while silver picked up 39 cents on the bid, at $37.19.
It's a slow week, though it is only the beginning of what appears to be shaping up as one slow, hot summer of declines. There is no catalyst for buying stocks. It is, however, a great time to stock up on gold, silver and other necessary household items one might need in case of emergency, like banks closing or a false flag terror scare or the end of the Euro, which is almost a certainty. The only thing uncertain about the demise of the Euro as a currency is the timing, but rest assured, when it does happen, it will send the global economy into a tailspin.
To wit: up in the early going and down into the close, and that's exactly what the markets offered up today. There is no doubt that the bear market which began in August-October 2007 is alive and well and ready to take more money prisoner. Albeit the long interruption from March 2009 to May 2011, the long rally was nothing more than a cyclical upturn aided by trillions of dollars in free cash flow, courtesy the Federal Reserve.
Now that QE2 is coming to an abrupt end, the bears once again have their claws sharpened and are gnashing their teeth in anticipation of a tasty fete of equity fare.
Fittingly, the day ended with Fed Chairman Ben Bernanke droning on in his monotone about world economic conditions and how the Fed is powerless to do anything about the weather. Yes, he did mention the weather. In essence, his speech before the International Monetary Conference in Atlanta offered nothing to the market; there was no new policy, no mention of further stimulus. In show biz parlance, he bombed, mightily.
Stocks were up early but began selling off around 2:00 pm, wiping out all gains by the close, except in the broad NYSE composite.
It was the fifth straight decline for the Dow, S&P and NASDAQ and a sure sign of more trouble for the embattled US economy ahead.
Dow 12,070.81, -19.15 (0.16%)
NASDAQ 2,701.56, -1.00 (0.04%)
S&P 500 1,284.94, -1.23 (0.10%)
NYSE Composite 8,131.69, +15.82 (0.19%)
Advancers finished slightly ahead of losers, 3174-2454, but new highs succumbed to the downdraft of new lows. On the NASDAQ, 21 new highs, 112 new lows. The NYSE was witness to 37 new highs and 60 new lows, making to combined total 58 new highs and 172 new lows, the forth straight session in which the new lows have outnumbered new highs, and a sure sign that the market is in a correction, soon to become known as the resumption of the bear market.
Volume was scant, though that in and of itself is nothing of a surprise. It exemplifies the general weakness in equities.
NASDAQ Volume 1,861,762,125
NYSE Volume 3,681,650,000
NYMEX crude oil futures for WTI gained 8 cents, closing at $99.09. Gold lost 30 cents, to $1543.60, while silver picked up 39 cents on the bid, at $37.19.
It's a slow week, though it is only the beginning of what appears to be shaping up as one slow, hot summer of declines. There is no catalyst for buying stocks. It is, however, a great time to stock up on gold, silver and other necessary household items one might need in case of emergency, like banks closing or a false flag terror scare or the end of the Euro, which is almost a certainty. The only thing uncertain about the demise of the Euro as a currency is the timing, but rest assured, when it does happen, it will send the global economy into a tailspin.
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