Well, somebody's making money, but there aren't very many people trading. Volume today was among the lowest of the year, and it's supposed to be busy.
Call it what you like, but a 166-point move on the Dow on near-record-low volume, to most experts, is absolutely meaningless and not likely to retain value for long. This market is so full of hope, desperation and inside dealings one could easily assume the only traders left will soon be gnashing at each other's flesh over the few bones left to be picked over.
Of course, this continuing ramp-up on the major averages come just days before the major banks release third quarter earnings next week, among them Citi, Bank of America, Goldman Sachs, Wells Fargo, PNC and Morgan Stanley. JP Morgan Chase already released their third quarter results and they were nothing if not laughable, so full of accounting gimmickry and false statements it's amazing anybody would hold even one share of this global disaster.
Sure, let's buy Apple at over $400 per share, or Google at $600. Most of us would rather stuff it in a mattress, which is the thought around the current war being waged on SAVERS, by SPECULATORS. There is no opportunity to actually earn interest in a savings plan, whether it be in treasuries, money markets, CDs or any other, so-called "safe" strategic asset. And the pundits, like the Reverend Jim Cramer, who say to buy high-yielding industrials, are whistling past the grave, because a stock like Coca-Cola (KO) sporting a 2.8% dividend and trading currently in the mid-to-high 60s, only has to lose two to three points in order to wipe out all of that dividend income. When the eventual market crash comes, the dividend checks cashed over the years will look truly pathetic to the lost value in the stock itself, and thus, your capital has been wasted, your savings destroyed.
Since the global banking cartel, in association with the spendthrift governments of the world, now control just about all major markets, including commodities such as oil, gold and silver, there is literally nowhere to invest safely except in unknown penny stocks or completely local. That's right, you're probably better off loaning the kid down the street $5000 to get his computer repair business off the ground than sinking your hard-earned-and-eventually-taxed-out-of-existence money into any Wall Street-related stock or scheme, and today's absurdly low volume on top of many previous ridiculously low volume days over the past year proves that people have not only lost money with Wall Street, but are rapidly losing their patience - see the Occupy Wall Street movement - and their interest in the future of big business in America.
As has been said before on this blog, the current economic climate is ripe for collapse, and the only investments should be in tools of trades and basic survival equipment. There's probably a good opportunity in firewood upcoming this winter, as the control fraud in heating oil and natural gas will bury even more families this winter under unbearable expense.
It is distressing, to say the least, to watch the European leaders lie about having a plan, making a plan, preparing a plan to save the continent when in reality all they can do is what the Federal Reserve is so expert at: printing more money and devaluing the currency.
And one final word, on this Herman Cain and his idiotic 9-9-9 plan which includes a 9% income tax, a 9% corporate tax and a 9% national sales tax. To put it into the words of somebody I know and love well, "this plan is another way for the rich to get richer and the poor poorer. Most of the people in the higher tax brackets love it because they're paying something North of 35% presently in income tax, and many of them have businesses paying a 35% corporate income tax. On the other end, the people who will be most damaged by this stupid gimmick of a plan will be the poor and middle class, who already pay no tax because they don't make enough money and would have to pay an additional 9% sales tax on top of the state sales tax they're already having ripped from their hands by incompetent state governments.
What is truly amazing about Herman Cain is that he is a front-runner for the Republicans on the basis of this plan. A Herman Cain presidency would plunge 2/3rds of the nation into abject poverty, and maybe that's part of the plan, to turn America into another stinking third world backwater. They're doing a pretty good job on it so far. Mr. Cain is about as fit to be president as Charlie Sheen. Actually, Charlie might not do such a bad job. At least his press conferences would be #winning events.
What a country, full of liars and thieves at the very pinnacle of business and politics.
Dow 11,644.49, +166.36 (1.45%)
NASDAQ 2,667.85, +47.61 (1.82%)
S&P 500 1,224.58, +20.92 (1.74%)
NYSE Composite 7,350.46, +121.38 (1.68%)
NASDAQ Volume 1,687,163,000
NYSE Volume 4,057,578,000
Combined NYSE & NASDAQ Advance - Decline: 5103-1362
Combined NYSE & NASDAQ New highs - New lows: 52-32
WTI crude oil: 86.80, +2.57 (Why?)
Gold: 1,683.00, +14.50
Silver: 32.17, +0.51
Showing posts with label volume. Show all posts
Showing posts with label volume. Show all posts
Friday, October 14, 2011
Thursday, August 11, 2011
Markets in Stupid Mode
Sorry, but nobody can accurately analyze four consecutive days of 400+ point moves on the Dow.
It's just not normal, but this is what we get when there are no regulators, lax controls and machines doing 90% of the trading.
The only thing one can possibly take away from this is that markets, and most traders, have no idea what to expect from day-to-day and the entire equity complex is more than likely rigged to benefit high frequency traders and the TBTF banks.
Fundamental analysis more or less died in 2008, and now we are seeing the effects of a completely broken price discovery mechanism.
It's tough to get excited about a 400-point move higher when the day before was a 500-point move to the downside. Any attempt to justify this kind of activity should be met with blank stares and an excessive amount of skepticism because, over the past four days, nothing has fundamentally changed except the price people - or machines - are willing to pay for stocks, options, ETFs and mutual funds.
Seriously, it's not even worth attempting to analyze today's movements because tomorrow's are likely to be something completely different, rendering any judgments incorrect.
Dow 11,143.31, +423.37 (3.95%)
NASDAQ 2,492.68, +111.63 (4.69%)
S&P 500 1,172.64, +51.88 (4.63%)
NYSE Composite 7,257.57, +319.34 (4.60%)
Advancers beat decliners, 5816-965. On the NASDAQ, there were five (5) new highs and 131 new lows; the NYSE saw seven (7) stocks reach new highs, but 127 make new lows. It should be of some benefit to keep a close eye on the new highs-new lows indicator. Even on a massive upside day like today, very few stocks made new highs, though an inordinate number made new lows. That's a definitely bearish trend which has remained in place throughout the market turmoil.
Volume was on the high side again, though not nearly as robust as on the days when the markets turned lower. One gets the feeling that most of the trades are very short-term, and once the money's been made, the traders will exit and go looking for fresh meat. This isn't a stock market any more. It's close to being a casino, though that would give casinos a bad name.
NASDAQ Volume 3,091,521,750
NYSE Volume 7,798,956,500
Oil priced higher again, gaining $2.83, to close the NYMEX session at $85.72. Would it surprise anyone to see oil back above $90 shortly, with no change at all in prices for gasoline at the pump? It's all part of the elitists' plan to destroy the middle class.
Gold was slapped down after the CME announced it would raise margin requirements by 22%, losing $32.80, to $1,751.50. Silver nose-dived 66 cents, to $38.67.
A couple of things are for certain. The powers that be don't like gold and silver rising in price and the general direction of the market is down. We're still in correction territory, down more than 10% on the major indices, and these powerful rallies are fueled, in part, by short covering, the machine-driven trading and the allocations required by ETFs, one of the worst financial innovations of the last fifty years.
If ETFs are going to continue to be part of the market, they need to be excluded from making up part of the averages. In other words, spill them out into their own exchange, which would eliminate a lot of the volatility in markets today.
Of course, that will never happen.
Thank goodness tomorrow is Friday.
It's just not normal, but this is what we get when there are no regulators, lax controls and machines doing 90% of the trading.
The only thing one can possibly take away from this is that markets, and most traders, have no idea what to expect from day-to-day and the entire equity complex is more than likely rigged to benefit high frequency traders and the TBTF banks.
Fundamental analysis more or less died in 2008, and now we are seeing the effects of a completely broken price discovery mechanism.
It's tough to get excited about a 400-point move higher when the day before was a 500-point move to the downside. Any attempt to justify this kind of activity should be met with blank stares and an excessive amount of skepticism because, over the past four days, nothing has fundamentally changed except the price people - or machines - are willing to pay for stocks, options, ETFs and mutual funds.
Seriously, it's not even worth attempting to analyze today's movements because tomorrow's are likely to be something completely different, rendering any judgments incorrect.
Dow 11,143.31, +423.37 (3.95%)
NASDAQ 2,492.68, +111.63 (4.69%)
S&P 500 1,172.64, +51.88 (4.63%)
NYSE Composite 7,257.57, +319.34 (4.60%)
Advancers beat decliners, 5816-965. On the NASDAQ, there were five (5) new highs and 131 new lows; the NYSE saw seven (7) stocks reach new highs, but 127 make new lows. It should be of some benefit to keep a close eye on the new highs-new lows indicator. Even on a massive upside day like today, very few stocks made new highs, though an inordinate number made new lows. That's a definitely bearish trend which has remained in place throughout the market turmoil.
Volume was on the high side again, though not nearly as robust as on the days when the markets turned lower. One gets the feeling that most of the trades are very short-term, and once the money's been made, the traders will exit and go looking for fresh meat. This isn't a stock market any more. It's close to being a casino, though that would give casinos a bad name.
NASDAQ Volume 3,091,521,750
NYSE Volume 7,798,956,500
Oil priced higher again, gaining $2.83, to close the NYMEX session at $85.72. Would it surprise anyone to see oil back above $90 shortly, with no change at all in prices for gasoline at the pump? It's all part of the elitists' plan to destroy the middle class.
Gold was slapped down after the CME announced it would raise margin requirements by 22%, losing $32.80, to $1,751.50. Silver nose-dived 66 cents, to $38.67.
A couple of things are for certain. The powers that be don't like gold and silver rising in price and the general direction of the market is down. We're still in correction territory, down more than 10% on the major indices, and these powerful rallies are fueled, in part, by short covering, the machine-driven trading and the allocations required by ETFs, one of the worst financial innovations of the last fifty years.
If ETFs are going to continue to be part of the market, they need to be excluded from making up part of the averages. In other words, spill them out into their own exchange, which would eliminate a lot of the volatility in markets today.
Of course, that will never happen.
Thank goodness tomorrow is Friday.
Tuesday, July 5, 2011
Stocks Stall While Precious Metals Soar
Well, that week-long, pre-holiday buying rush seems to have come and gone now that the three-day weekend has passed, which really isn't surprising, considering how vaporous and baseless the entire five days rally was.
Low volume, as usual, was the telling factor in the melt-up last week and now it's gone, maybe for good. There are no more suckers in the market, or at least not as many as there were a few years ago. One look at today's volume numbers will stamp that as fact. Today might go down as the lowest volume trading day of the year, though there have been so many, it may not, and besides, nobody's keeping score.
One the other hand, precious metals did astonishingly well. There seems to be another shift to safety underway and nothing is safer than gold, and maybe silver, if the price manipulation would ever cease.
Other than the obvious, there was little to report from the exchanges. One wonders how the CNBC anchors manage to stay awake on days like this.
Dow 12,569.87, -12.90 (0.10%)
NASDAQ 2,825.77, +9.74 (0.35%)
S&P 500 1,337.88, -1.79 (0.13%)
NYSE Composite 8,404.63, -20.85 (0.25%)
Advancing issues had a slim advantage over decliners, 3278-3231. On the NASDAQ, there were 149 new highs and 27 new lows. The NYSE new highs beat new lows, 173-7. Combined new highs: 322-34. As mentioned, volume was dismal.
NASDAQ Volume 1,569,571,875.00
NYSE Volume 3,676,082,750
The real action was in commodities. Oil surged again, gaining $1.95, to close the day at $96.89. Gold was boosted $30.10, to $1,512.70, while silver gained an inordinate $1.70, to finish at $35.41.
The world still waits for the congress and president to decide on whether or not to raise the debt ceiling. Both houses remain in session, even though the week is usually reserved for yet another undeserved week-long vacation. With any luck, congress will allow the government to borrow to its heart's content before the NFL settles their issues.
Truthfully, more people are concerned about the NFL season than the debt limit. Obviously, one can live without a functioning currency, but Sundays without pro football is an unthinkabel reality that nobody seriously wants to consider.
Low volume, as usual, was the telling factor in the melt-up last week and now it's gone, maybe for good. There are no more suckers in the market, or at least not as many as there were a few years ago. One look at today's volume numbers will stamp that as fact. Today might go down as the lowest volume trading day of the year, though there have been so many, it may not, and besides, nobody's keeping score.
One the other hand, precious metals did astonishingly well. There seems to be another shift to safety underway and nothing is safer than gold, and maybe silver, if the price manipulation would ever cease.
Other than the obvious, there was little to report from the exchanges. One wonders how the CNBC anchors manage to stay awake on days like this.
Dow 12,569.87, -12.90 (0.10%)
NASDAQ 2,825.77, +9.74 (0.35%)
S&P 500 1,337.88, -1.79 (0.13%)
NYSE Composite 8,404.63, -20.85 (0.25%)
Advancing issues had a slim advantage over decliners, 3278-3231. On the NASDAQ, there were 149 new highs and 27 new lows. The NYSE new highs beat new lows, 173-7. Combined new highs: 322-34. As mentioned, volume was dismal.
NASDAQ Volume 1,569,571,875.00
NYSE Volume 3,676,082,750
The real action was in commodities. Oil surged again, gaining $1.95, to close the day at $96.89. Gold was boosted $30.10, to $1,512.70, while silver gained an inordinate $1.70, to finish at $35.41.
The world still waits for the congress and president to decide on whether or not to raise the debt ceiling. Both houses remain in session, even though the week is usually reserved for yet another undeserved week-long vacation. With any luck, congress will allow the government to borrow to its heart's content before the NFL settles their issues.
Truthfully, more people are concerned about the NFL season than the debt limit. Obviously, one can live without a functioning currency, but Sundays without pro football is an unthinkabel reality that nobody seriously wants to consider.
Monday, April 25, 2011
Slowest Trading Day of 2011 Marks Beginning of End
Just when you thought trading volume could not possibly get any lower, along comes the Easter Bunny, leaving along his trail melted chocolate and some mysterious objects that look like little raisins.
And he littered these all over Wall Street, apparently, because on the day after the holy holiday, traders were seemingly not in much of a mood for anything. The range on the Dow was disturbing - a mere 60 points from top to bottom, and the most-widely-watched index in the world registered another loss, breaking a string of four straight session gains.
The NASDAQ was the only index to finish on a positive note, though the gains were negligible.
The stark reality of a dormant US and global economy and the coming end to the Fed's generosity, with QE2 supposedly finished sometime in June, may have marked a final turning point for the markets. Stock values are stretched thin, all of the indices are at or near two-year highs and there's little catalyst besides momentum stocks like Apple and Netflix. It's almost impossible to predict anything other than a sullen summer downturn ahead, driven largely by the fiasco in Washington over raising the debt ceiling and the upcoming 2012 budget battle.
With that, investors and traders left the floor today on the low volume point of 2011. Trading could likely have been handled by three accountants with pencils, abacus and ledgers rather than the monstrous computer banks allocated to handle what used to be "the usual" flow.
Dow 12,479.88, -26.11 (0.21%)
NASDAQ 2,825.88, +5.72 (0.20%)
S&P 500 1,335.25, -2.13 (0.16%)
NYSE Composite 8,485.25, -19.11 (0.22%)
Decliners outweighed advancing issues, 3556-2998. On the NASDAQ, new highs topped new lows, 122-21, while on the NYSE, there were 212 new highs and a mere 20 new lows recorded. As mentioned above, there simply was no volume.
NASDAQ Volume 1,486,734,000.00
NYSE Volume 3,223,292,250
Energy traders shared the disinterest with their equity brethren, pushing the price of crude oil down a whole penny, to $112.28. Precious metals were an entirely different story, though, as gold reached a high of $1519.30, before being smashed down, but still finishing with a win, up $5.30, to $1,509.10 at the close. Silver followed a similar flight path, nearly braking the $50 barrier, at $49.85 before pulling back to close at $47.15, still a gain of $1.09 over Friday's close.
That the metals are about to run away from the rest of the commodity picture should come as no surprise as the current state of affairs in all things concerning fiat money are looking mighty suspect, as they have for the past two years. There will certainly be another blow-up crisis of some kind, though the "experts" in charge of killing the middle class hope against reality that this one will not be as severe as 2008, because the system - and the people - will not contend with it.
We are closing in quickly on what may be the last days of the great nations and their experiments in fiat money not backed by anything, centralized planning and their dual Ponzi schemes of finance and pension funding. The stage has been set by the Fed bingeing at the free money tap; all that's needed to tip the entire global system over is a nudge from some disgruntled citizens in France, the UK, Germany or the US, maybe even China. That nudge may be in the form of gas prices over $4.00 a gallon, though it would seem that $5.00 is the tipping point at which people abandon their vehicles and head for the nearest bastion of government authority, torches and pitchforks in hands.
It's coming, and very well-deserved.
And he littered these all over Wall Street, apparently, because on the day after the holy holiday, traders were seemingly not in much of a mood for anything. The range on the Dow was disturbing - a mere 60 points from top to bottom, and the most-widely-watched index in the world registered another loss, breaking a string of four straight session gains.
The NASDAQ was the only index to finish on a positive note, though the gains were negligible.
The stark reality of a dormant US and global economy and the coming end to the Fed's generosity, with QE2 supposedly finished sometime in June, may have marked a final turning point for the markets. Stock values are stretched thin, all of the indices are at or near two-year highs and there's little catalyst besides momentum stocks like Apple and Netflix. It's almost impossible to predict anything other than a sullen summer downturn ahead, driven largely by the fiasco in Washington over raising the debt ceiling and the upcoming 2012 budget battle.
With that, investors and traders left the floor today on the low volume point of 2011. Trading could likely have been handled by three accountants with pencils, abacus and ledgers rather than the monstrous computer banks allocated to handle what used to be "the usual" flow.
Dow 12,479.88, -26.11 (0.21%)
NASDAQ 2,825.88, +5.72 (0.20%)
S&P 500 1,335.25, -2.13 (0.16%)
NYSE Composite 8,485.25, -19.11 (0.22%)
Decliners outweighed advancing issues, 3556-2998. On the NASDAQ, new highs topped new lows, 122-21, while on the NYSE, there were 212 new highs and a mere 20 new lows recorded. As mentioned above, there simply was no volume.
NASDAQ Volume 1,486,734,000.00
NYSE Volume 3,223,292,250
Energy traders shared the disinterest with their equity brethren, pushing the price of crude oil down a whole penny, to $112.28. Precious metals were an entirely different story, though, as gold reached a high of $1519.30, before being smashed down, but still finishing with a win, up $5.30, to $1,509.10 at the close. Silver followed a similar flight path, nearly braking the $50 barrier, at $49.85 before pulling back to close at $47.15, still a gain of $1.09 over Friday's close.
That the metals are about to run away from the rest of the commodity picture should come as no surprise as the current state of affairs in all things concerning fiat money are looking mighty suspect, as they have for the past two years. There will certainly be another blow-up crisis of some kind, though the "experts" in charge of killing the middle class hope against reality that this one will not be as severe as 2008, because the system - and the people - will not contend with it.
We are closing in quickly on what may be the last days of the great nations and their experiments in fiat money not backed by anything, centralized planning and their dual Ponzi schemes of finance and pension funding. The stage has been set by the Fed bingeing at the free money tap; all that's needed to tip the entire global system over is a nudge from some disgruntled citizens in France, the UK, Germany or the US, maybe even China. That nudge may be in the form of gas prices over $4.00 a gallon, though it would seem that $5.00 is the tipping point at which people abandon their vehicles and head for the nearest bastion of government authority, torches and pitchforks in hands.
It's coming, and very well-deserved.
Wednesday, December 22, 2010
Year-End Melt-Up Continues on Low Volume Trading
The monotony of the Fed's POMO-induced stock market rally must be, by now, be putting some investors into a zombie-like coma, wherein they go to their computers and mindlessly punch in more stocks to buy, at market prices. None of them perform any due diligence, glance at fundamentals or look for patterns in the technical charts.
Stock. Buy. Done. Rinse, repeat. Simple as that. There's no other explanation for the unprecedented rise in equities since the beginning of September, but more pronounced in the final month of the year, one which is normally not very volatile.
There are, of course, very few doing this zombie trading. Volume has backed off to some of the lowest levels of the year, in a year that has been branded as one of extremely low volume and interest. Yet, stocks still rise, and, as we mentioned yesterday, some of the biggest gainers are the financial stocks, for reasons still unexplained. The movement in the financial sector is truly from theatre of the absurd. Bank of America, for no apparent reason, gain a full 3% today, putting its December gain at a whopping 18%. That's extraordinary for a company which still has loads of non-performing mortgage loans on its books (somewhere, we're sure of it) and needed $45 billion in TARP money from the government just to stay alive just a year-and-a-half ago.
Dow 11,559.49, +26.33 (0.23%)
NASDAQ 2,671.48, +3.87 (0.15%)
S&P 500 1,258.84, +4.24 (0.34%)
NYSE Composite 7,931.76, +25.66 (0.32%)
Advancing issues led decliners by a wide margin for the second straight session, 3777-2739. NASDAQ new highs stood at 210, to a mere 25 new lows. On the NYSE, there were 215 new highs, 15 new lows. Those daily new high-low figures have been remarkably similar for the better part of the month, and for good reason. Traders (or computers running arb algos) have ramped in and out of the same stocks for the past few weeks and they have been primary contributors to the upside, which also explains how the indices rise on such paltry volume.
NASDAQ Volume 1,627,216,375.00
NYSE Volume 3,900,822,250
Commodity markets were moribund, with the exception of oil, rolling into the February contract up another 66 cents on the day, to $90.48. The pricing in oil is absolutely sick, running $20-30 over normalized pricing due to rampant, unchecked speculation. The attendant rise in the price of home heating oil and gasoline are nothing other than outright theft of American dollars by the oil cartel, comprised not of OPEC nations, but rather gigantic conglomerates, BP, ExxonMobil, Chevron and Royal Dutch Shell.
Gold spent most of the day straddling the flat line, currently down 60 cents, to $1384.90. So too, silver, 15 cents lower, at $29.22.
With just six trading days remaining in 2010 (Markets are closed December 24, but open for a full session on December 31), it appears certain that all of the major indices will end with sizable upside of at least 10% (Dow) and closer to 15% or more on the NASDAQ and S&P 500.
Stock. Buy. Done. Rinse, repeat. Simple as that. There's no other explanation for the unprecedented rise in equities since the beginning of September, but more pronounced in the final month of the year, one which is normally not very volatile.
There are, of course, very few doing this zombie trading. Volume has backed off to some of the lowest levels of the year, in a year that has been branded as one of extremely low volume and interest. Yet, stocks still rise, and, as we mentioned yesterday, some of the biggest gainers are the financial stocks, for reasons still unexplained. The movement in the financial sector is truly from theatre of the absurd. Bank of America, for no apparent reason, gain a full 3% today, putting its December gain at a whopping 18%. That's extraordinary for a company which still has loads of non-performing mortgage loans on its books (somewhere, we're sure of it) and needed $45 billion in TARP money from the government just to stay alive just a year-and-a-half ago.
Dow 11,559.49, +26.33 (0.23%)
NASDAQ 2,671.48, +3.87 (0.15%)
S&P 500 1,258.84, +4.24 (0.34%)
NYSE Composite 7,931.76, +25.66 (0.32%)
Advancing issues led decliners by a wide margin for the second straight session, 3777-2739. NASDAQ new highs stood at 210, to a mere 25 new lows. On the NYSE, there were 215 new highs, 15 new lows. Those daily new high-low figures have been remarkably similar for the better part of the month, and for good reason. Traders (or computers running arb algos) have ramped in and out of the same stocks for the past few weeks and they have been primary contributors to the upside, which also explains how the indices rise on such paltry volume.
NASDAQ Volume 1,627,216,375.00
NYSE Volume 3,900,822,250
Commodity markets were moribund, with the exception of oil, rolling into the February contract up another 66 cents on the day, to $90.48. The pricing in oil is absolutely sick, running $20-30 over normalized pricing due to rampant, unchecked speculation. The attendant rise in the price of home heating oil and gasoline are nothing other than outright theft of American dollars by the oil cartel, comprised not of OPEC nations, but rather gigantic conglomerates, BP, ExxonMobil, Chevron and Royal Dutch Shell.
Gold spent most of the day straddling the flat line, currently down 60 cents, to $1384.90. So too, silver, 15 cents lower, at $29.22.
With just six trading days remaining in 2010 (Markets are closed December 24, but open for a full session on December 31), it appears certain that all of the major indices will end with sizable upside of at least 10% (Dow) and closer to 15% or more on the NASDAQ and S&P 500.
Wednesday, December 15, 2010
Dead Money
Dow 11,457.47, -19.07 (0.17%)
NASDAQ 2,617.22, -10.50 (0.40%)
S&P 500 1,235.23, -6.36 (0.51%)
NYSE Composite 7,798.78, -56.44 (0.72%)
NASDAQ Volume 1,876,932,000
NYSE Volume 5,043,671,500
The numbers tell just about the whole story of today's uneventful trading. With just two weeks left in the year and Christmas now just ten days off, traders seem reluctant to take on new positions. Stocks are trading in a narrow range and for the third consecutive day, have sold off into the close, not a very encouraging sign.
Declining issues outpaced advancers, 4197-2299. On the NASDAQ, new highs bettered new lows, 167-32 and on the NYSE, 156-89, as convergence continues, especially on the NYSE. Volume was actually a little better than the low, low normal, and, with options expiring on Friday, the suspicion is that the smart money has already exited the trading area.
There simply is no catalyst for stocks besides the Fed's relentless pumping (another $6.8 billion today) and even that isn't enough to keep stocks positive. It raises the question of extending the Bush tax cuts and adding further stimulus by the congress. If conditions were so rosy, why the need for more easing on the fiscal side. Obviously, something is amiss.
One guess will be that the Christmas shopping season will be a minor disappointment, as will December jobs numbers, revealed the first week of January. Then there's the issue of corporate profits nearing the middle to end of the month. If they're not perfectly great, selling could become de rigeur.
Even commodities weren't moving today. Oil made a modest gain, up 34 cents, to $88.62. Gold fell sharply, losing $18.40, to $1,386.20. Silver slipped back another 54 cents, to $29.25.
It all looks very much like locking in year-end profits.
NASDAQ 2,617.22, -10.50 (0.40%)
S&P 500 1,235.23, -6.36 (0.51%)
NYSE Composite 7,798.78, -56.44 (0.72%)
NASDAQ Volume 1,876,932,000
NYSE Volume 5,043,671,500
The numbers tell just about the whole story of today's uneventful trading. With just two weeks left in the year and Christmas now just ten days off, traders seem reluctant to take on new positions. Stocks are trading in a narrow range and for the third consecutive day, have sold off into the close, not a very encouraging sign.
Declining issues outpaced advancers, 4197-2299. On the NASDAQ, new highs bettered new lows, 167-32 and on the NYSE, 156-89, as convergence continues, especially on the NYSE. Volume was actually a little better than the low, low normal, and, with options expiring on Friday, the suspicion is that the smart money has already exited the trading area.
There simply is no catalyst for stocks besides the Fed's relentless pumping (another $6.8 billion today) and even that isn't enough to keep stocks positive. It raises the question of extending the Bush tax cuts and adding further stimulus by the congress. If conditions were so rosy, why the need for more easing on the fiscal side. Obviously, something is amiss.
One guess will be that the Christmas shopping season will be a minor disappointment, as will December jobs numbers, revealed the first week of January. Then there's the issue of corporate profits nearing the middle to end of the month. If they're not perfectly great, selling could become de rigeur.
Even commodities weren't moving today. Oil made a modest gain, up 34 cents, to $88.62. Gold fell sharply, losing $18.40, to $1,386.20. Silver slipped back another 54 cents, to $29.25.
It all looks very much like locking in year-end profits.
Wednesday, December 8, 2010
Bullet Points (no, not real bullets, yet) on the Mid-Week Menage
The noise out in finance-land is becoming deafening. So much, that one can barely keep up with events as they occur. Whether that is the plan of the criminal oligarchs or not, things are sure getting interesting. we present bullet points for today's mass screwing:
Dow 11,372.48, +13.32 (0.12%)
NASDAQ 2,609.16, +10.67 (0.41%)
S&P 500 1,228.28, +4.53 (0.37%)
NYSE Composite 7,750.32, +10.68 (0.14%)
In opposition to the smallish headline numbers, declining issues outnumbered gainers on the day, 2829-3641. NASDAQ New Highs: 165, Lows: 25; NYSE New Highs: 125, Lows: 28. While the gap between the new highs and new lows is still quite large, the shrinkage today from the advantage the past few weeks is substantial. This indicator has been threatening to roll over for some weeks now, but has yet to do so. When it does - and it eventually will - it will delineate a new down-trend for stocks, one that is very long overdue. Even Bernanke's QE efforts cannot keep a market permanently on an upward bias.
Volume was back to sick, anemic levels once again as nobody wants to trade US stocks, or, at least the number of players in the market has diminished and will probably remain at low levels at least through the new year. Trades of size have only another seven or eight sessions remaining in the year to be made, as the Christmas and New Year's holidays blunt all trades and are normally among the slowest trading days of the year. A run on equities for year end is assumed, as prices are abnormally high and being held in space. Options expiration is still a week away, and could be the day (next Friday, Dec. 17) for capitulation, though today serves as a hint of what's coming.
NASDAQ Volume 1,783,785,000
NYSE Volume 5,241,274,000
Crude oil backed off a little more, losing 41 cents, to $88.28. The damage done in the precious metals markets, however, was more severe, likely the effort of highly-leveraged manipulators (JP Morgan), dropping gold $18.20, to $1382.20 and silver losing another 27 cents, to $28.38. Both gold and silver had made new multi-year highs on Tuesday and the powers that be could not stomach losing so badly on their short positions, thus, the coordinated attack.
For gold and silver bugs, who buy and hold the PMs as hedges against currency risk, the moves were meaningless, actually presenting a buying proposition as global currencies continue their race to the bottom. CNBC hosts asked if the moves were indicative of a bubble, especially in gold, the best contrarian indicator we've seen in some time.
- Overnight, gold and silver are sucker-punched, supposedly by JP Morgan, which is trying to suppress prices of what are now competing currencies. The assault continues into the day (see below).
- Certain members of the House of Representative express doubts about whether they will vote for the "tax deal" that President Obama and the Republican leadership worked out on Monday.
- 10-year note yield hits 3.37 midday, backs off to close around 3.24, but is up a full 100 basis points (1%) from just a month ago.
- Julian Assange, founder and head of WikiLeaks is still being held without bail in UK; lawyer seeks to fight extradition to Sweden where he faces trumped-up charges of "sex crimes."
- In response to Visa and Mastercard shutting off Assange's access to his money, hackers shut down credit card web sites.
- Planned bank run in Europe turns into a colossal failure, hardly worth mention.
- More criticism of Fed's Bernanke interview surfaces, most claiming he lied about "not printing money" and laughable commentary about being 100% sure he can handle his job.
- China ready to hike interest rates 50 basis points on Friday or Saturday, in direct opposition to Fed's QE2
- Stocks flounder all day as Fed only monetizes $2.1 billion, smallest POMO in weeks.
- Market spooked by alleged huge FBI raids on hedge funds, though no arrests occur.
Dow 11,372.48, +13.32 (0.12%)
NASDAQ 2,609.16, +10.67 (0.41%)
S&P 500 1,228.28, +4.53 (0.37%)
NYSE Composite 7,750.32, +10.68 (0.14%)
In opposition to the smallish headline numbers, declining issues outnumbered gainers on the day, 2829-3641. NASDAQ New Highs: 165, Lows: 25; NYSE New Highs: 125, Lows: 28. While the gap between the new highs and new lows is still quite large, the shrinkage today from the advantage the past few weeks is substantial. This indicator has been threatening to roll over for some weeks now, but has yet to do so. When it does - and it eventually will - it will delineate a new down-trend for stocks, one that is very long overdue. Even Bernanke's QE efforts cannot keep a market permanently on an upward bias.
Volume was back to sick, anemic levels once again as nobody wants to trade US stocks, or, at least the number of players in the market has diminished and will probably remain at low levels at least through the new year. Trades of size have only another seven or eight sessions remaining in the year to be made, as the Christmas and New Year's holidays blunt all trades and are normally among the slowest trading days of the year. A run on equities for year end is assumed, as prices are abnormally high and being held in space. Options expiration is still a week away, and could be the day (next Friday, Dec. 17) for capitulation, though today serves as a hint of what's coming.
NASDAQ Volume 1,783,785,000
NYSE Volume 5,241,274,000
Crude oil backed off a little more, losing 41 cents, to $88.28. The damage done in the precious metals markets, however, was more severe, likely the effort of highly-leveraged manipulators (JP Morgan), dropping gold $18.20, to $1382.20 and silver losing another 27 cents, to $28.38. Both gold and silver had made new multi-year highs on Tuesday and the powers that be could not stomach losing so badly on their short positions, thus, the coordinated attack.
For gold and silver bugs, who buy and hold the PMs as hedges against currency risk, the moves were meaningless, actually presenting a buying proposition as global currencies continue their race to the bottom. CNBC hosts asked if the moves were indicative of a bubble, especially in gold, the best contrarian indicator we've seen in some time.
Friday, September 17, 2010
Quotes for a Friday Afternoon
Before getting to the important part of this posting, a quick recap of the day on Wall Street is the usual requisite, so...
Here's what happened:
Dow 10,607.85. +13.02 (0.12%)
NASDAQ 2,315.61, +12.36 (0.54%)
S&P 500 1,125.59, +0.93 (0.08%)
NYSE Composite 7,154.64, -14.84 (0.21%)
NASDAQ Volume 2,174,708,250
NYSE Volume 4,437,062,000
Not much, even for a quad-witching options day, which is supposed to be "volatile." US markets are, if anything, operating on borrowed money and borrowed time. The money's been borrowed from the Fed and the time is just a matter of when somebody with a large enough stake says, "good-bye." It's a game of chicken and nobody wants to be the last one in the room.
Note that the NYSE, the broadest measure of equities, was the only one down, and also the only index usually not quoted by the major news services.
Advancing issues beat decliners, 3321-2395, but it's mostly just churning. New highs maintained their daily edge over new lows, 413-58, another meaningless metric, due to the large, unannounced number of issues de-listed in the past six to nine months. Volume was higher than normal, but still not of any degree anyone would get excited about. Most of the additional trading was due to the aforementioned quadruple-witching in options.
There was probably more action at Belmont Park than on the floor of the NYSE, and it was certainly more fun to watch.
Oil was hammered down another 91 cents lower, to $73.66, but remains stuck in a trading range, emblematic of the global economic condition. Gold closed up $3.70, at $1,275.60, another all-time high. Silver gathered only a nickel higher, to $20.79.
Then there was word on the housing market, from a number of economists, including the widely-quoted Mark Zandi of Moody's, who's been proven wrong so many times that most people have stopped counting.
Zandi believes housing prices will drop another 5% by 2013, and then says, "After reaching bottom, prices will gain at the historic annual pace of 3 percent..." He's probably wrong on the magnitude by a measure of three or four times. Residential real estate likely has 15-20% more to decline. As to his predicted annual growth pace of 3%, it's already well-established that home prices normally rise by about one per cent, not triple that.
Somebody ought to hand Zandi a golden parachute and shove him off a skyscraper so he can stop deluding himself that he's making sense. After all, he does work for one of the rating agencies which said all that toxic, sub-prime, re-packaged, securitized mortgage garbage was AAA-rated. The guy ought to be in jail rather than on CNBC.
The upshot is that the banks have such a monster of a problem on their hands that they and the courts cannot handle it in a reasonably timely manner. The absolute implosion of the US housing market has left a crater in the economy the size of Rush Limbaugh's ego, and that's enormous. The basic paradigm for buying a house these days is to offer 30% below the asking price, and see how badly the owners - either a bank or a homeowner or a combination of both - want out of it.
Then try and get a mortgage. A million more laughs.
The glut of homes - unoccupied, unrented, in need of repair, under-water financially - is mammoth and everywhere. Count on a minimum of three and probably more like five more years of pain, price declines and associated nonsense about finding "the bottom," which will only be reached when the banks realize that it's not worth their time or expense to pursue further exposure and foreclosures and they become the party which "walks away." When the banks no longer want the properties, no longer feel there's any gain in bleeding consumers dry with fees and interest, and the property taxes, maintenance and insurance exceed what they can hope to recover on unsold inventory, there will be a bottom, and it's going to be one heck of a lot lower and a heck of a lot further out than most people anticipate.
Too many houses at prices too many people can't afford. Simple math.
Following are the promised quotes. Have a lovely weekend.
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
-- Thomas Jefferson, (Attributed)
3rd president of US (1743 - 1826)
"Permit me to issue and control the money of a nation, and I care not who makes its laws."
-- Mayer Amschel Rothschild
"Income tax is nothing but wage slavery. If you have payroll deductions, you are a slave. Only way to fix it is for everyone to quit, or, as in Europe, the whole nation goes on strike. It won't happen here. Americans are too stupid and too frightened by their own government. I am not. I could care less. Let them come and take my house and my belongings. I will start over, stronger. I love this country, but I hate the people who run it."
-- Ed.
Here's what happened:
Dow 10,607.85. +13.02 (0.12%)
NASDAQ 2,315.61, +12.36 (0.54%)
S&P 500 1,125.59, +0.93 (0.08%)
NYSE Composite 7,154.64, -14.84 (0.21%)
NASDAQ Volume 2,174,708,250
NYSE Volume 4,437,062,000
Not much, even for a quad-witching options day, which is supposed to be "volatile." US markets are, if anything, operating on borrowed money and borrowed time. The money's been borrowed from the Fed and the time is just a matter of when somebody with a large enough stake says, "good-bye." It's a game of chicken and nobody wants to be the last one in the room.
Note that the NYSE, the broadest measure of equities, was the only one down, and also the only index usually not quoted by the major news services.
Advancing issues beat decliners, 3321-2395, but it's mostly just churning. New highs maintained their daily edge over new lows, 413-58, another meaningless metric, due to the large, unannounced number of issues de-listed in the past six to nine months. Volume was higher than normal, but still not of any degree anyone would get excited about. Most of the additional trading was due to the aforementioned quadruple-witching in options.
There was probably more action at Belmont Park than on the floor of the NYSE, and it was certainly more fun to watch.
Oil was hammered down another 91 cents lower, to $73.66, but remains stuck in a trading range, emblematic of the global economic condition. Gold closed up $3.70, at $1,275.60, another all-time high. Silver gathered only a nickel higher, to $20.79.
Then there was word on the housing market, from a number of economists, including the widely-quoted Mark Zandi of Moody's, who's been proven wrong so many times that most people have stopped counting.
Zandi believes housing prices will drop another 5% by 2013, and then says, "After reaching bottom, prices will gain at the historic annual pace of 3 percent..." He's probably wrong on the magnitude by a measure of three or four times. Residential real estate likely has 15-20% more to decline. As to his predicted annual growth pace of 3%, it's already well-established that home prices normally rise by about one per cent, not triple that.
Somebody ought to hand Zandi a golden parachute and shove him off a skyscraper so he can stop deluding himself that he's making sense. After all, he does work for one of the rating agencies which said all that toxic, sub-prime, re-packaged, securitized mortgage garbage was AAA-rated. The guy ought to be in jail rather than on CNBC.
The upshot is that the banks have such a monster of a problem on their hands that they and the courts cannot handle it in a reasonably timely manner. The absolute implosion of the US housing market has left a crater in the economy the size of Rush Limbaugh's ego, and that's enormous. The basic paradigm for buying a house these days is to offer 30% below the asking price, and see how badly the owners - either a bank or a homeowner or a combination of both - want out of it.
Then try and get a mortgage. A million more laughs.
The glut of homes - unoccupied, unrented, in need of repair, under-water financially - is mammoth and everywhere. Count on a minimum of three and probably more like five more years of pain, price declines and associated nonsense about finding "the bottom," which will only be reached when the banks realize that it's not worth their time or expense to pursue further exposure and foreclosures and they become the party which "walks away." When the banks no longer want the properties, no longer feel there's any gain in bleeding consumers dry with fees and interest, and the property taxes, maintenance and insurance exceed what they can hope to recover on unsold inventory, there will be a bottom, and it's going to be one heck of a lot lower and a heck of a lot further out than most people anticipate.
Too many houses at prices too many people can't afford. Simple math.
Following are the promised quotes. Have a lovely weekend.
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
-- Thomas Jefferson, (Attributed)
3rd president of US (1743 - 1826)
"Permit me to issue and control the money of a nation, and I care not who makes its laws."
-- Mayer Amschel Rothschild
"Income tax is nothing but wage slavery. If you have payroll deductions, you are a slave. Only way to fix it is for everyone to quit, or, as in Europe, the whole nation goes on strike. It won't happen here. Americans are too stupid and too frightened by their own government. I am not. I could care less. Let them come and take my house and my belongings. I will start over, stronger. I love this country, but I hate the people who run it."
-- Ed.
Friday, September 10, 2010
Stocks Higher Six of Seven Days in September
Even though stocks seem to have shaken off the summer blahs, two issues continue to dog the market for equities.
First, the major averages are still stuck below their 200-day moving averages. Just today, the Dow reached that level, and a breakout above 10,500 could drag the other indices along with it. That's for next week, however, when a number of key economic reports are due out, including Capacity Utilization, Industrial Production, CPI, PPI, Retail Sales and the Michigan Consumer Sentiment gauge for September.
Seeing as how these data sets have been playing an increasingly larger role in the direction of stocks, next week's movement should be tied directly to those various readings.
The second - and probably more worrisome - facet of the current range-bound movement is the continuing saga of slack volume. Like seemingly everything else in the US economy, there's an overabundance of equities but a serious lack of demand. We have commented on the low volume data ad nauseam, but the issue keeps dogging the market like a bad rash.
Until there's some semblance of confidence in stocks from individual investors, no rally will be trusted, no quoted price believed.
On the topics of trust and confidence, the SEC investigation of the May "flash crash" surely isn't instilling any of either into the hearts and minds of investors. In typical bureaucratic fashion, the SEC has performed an admirable job of foot-dragging, jaw-boning and bush-beating around the actual causes of the sudden drop which sent the Dow plummeting more than 700 points and quickly recovering, all in the span of 20 minutes.
The agency has ruled out some causes, including quote stuffing (the process of flooding an exchange with orders, along the lines of an internet "denial of service" attack), which actually seem to be at the heart of what happened. The agency expects to issue a final report - which will, no doubt, come to no conclusion - by the end of September, a full four months after an event which took less than half an hour from start to finish.
Regardless, the flash crash and overwhelming suspicion that the market is rigged by insiders has kept investors away for months. Average daily volume is off by more than 30% from previous "normal" levels.
Still, investors seemed content to push prices a little higher each day this week after Monday's selloff, the net result having the indices closing marginally higher than last week's finish.
Dow 10,462.77, +47.53 (0.46%)
NASDAQ 2,242.48, +6.28 (0.28%)
S&P 500 1,109.55, +5.37 (0.49%)
NYSE Composite 7,067.51, +33.14 (0.47%)
For the third straight session, winners topped losers, though again by a diminishing margin, 3405-2232. New highs: 297; New lows: 55. Volume: Pathetic.
NASDAQ Volume 1,630,413,750
NYSE Volume 3,165,025,000
Oil got a significant boost on news of a Canadian pipeline leak, gaining $2.20, to $76.45. The metals continued to stall out, with gold losing $4.40, to $1,244.50, and silver off a penny, at $19.80
First, the major averages are still stuck below their 200-day moving averages. Just today, the Dow reached that level, and a breakout above 10,500 could drag the other indices along with it. That's for next week, however, when a number of key economic reports are due out, including Capacity Utilization, Industrial Production, CPI, PPI, Retail Sales and the Michigan Consumer Sentiment gauge for September.
Seeing as how these data sets have been playing an increasingly larger role in the direction of stocks, next week's movement should be tied directly to those various readings.
The second - and probably more worrisome - facet of the current range-bound movement is the continuing saga of slack volume. Like seemingly everything else in the US economy, there's an overabundance of equities but a serious lack of demand. We have commented on the low volume data ad nauseam, but the issue keeps dogging the market like a bad rash.
Until there's some semblance of confidence in stocks from individual investors, no rally will be trusted, no quoted price believed.
On the topics of trust and confidence, the SEC investigation of the May "flash crash" surely isn't instilling any of either into the hearts and minds of investors. In typical bureaucratic fashion, the SEC has performed an admirable job of foot-dragging, jaw-boning and bush-beating around the actual causes of the sudden drop which sent the Dow plummeting more than 700 points and quickly recovering, all in the span of 20 minutes.
The agency has ruled out some causes, including quote stuffing (the process of flooding an exchange with orders, along the lines of an internet "denial of service" attack), which actually seem to be at the heart of what happened. The agency expects to issue a final report - which will, no doubt, come to no conclusion - by the end of September, a full four months after an event which took less than half an hour from start to finish.
Regardless, the flash crash and overwhelming suspicion that the market is rigged by insiders has kept investors away for months. Average daily volume is off by more than 30% from previous "normal" levels.
Still, investors seemed content to push prices a little higher each day this week after Monday's selloff, the net result having the indices closing marginally higher than last week's finish.
Dow 10,462.77, +47.53 (0.46%)
NASDAQ 2,242.48, +6.28 (0.28%)
S&P 500 1,109.55, +5.37 (0.49%)
NYSE Composite 7,067.51, +33.14 (0.47%)
For the third straight session, winners topped losers, though again by a diminishing margin, 3405-2232. New highs: 297; New lows: 55. Volume: Pathetic.
NASDAQ Volume 1,630,413,750
NYSE Volume 3,165,025,000
Oil got a significant boost on news of a Canadian pipeline leak, gaining $2.20, to $76.45. The metals continued to stall out, with gold losing $4.40, to $1,244.50, and silver off a penny, at $19.80
Tuesday, September 7, 2010
Markets Slump on Abysmal Volume; Politics Plays the Market
Let's face it. The financial meltdown that occurred in the Fall of 2008 damaged Wall Street far beyond anyone's imagination. Whether the crisis was real, contrived or a true panic, the number of participants since then - and the fruitless bailouts that followed - have diminished greatly. While everyone wanted to believe that more players would show up after the Labor Day holiday, the expected rush of traders simply failed to materialize this Tuesday, a stark reminder of the lack of confidence spreading across US markets.
The continuing low-volume regime should surprise nobody. After shrinking from 4-6 per cent in August, the "marketeers" last week managed a roughly 4% rebound in just the first three days of September. Investors are not foolish people generally, and they can sense when something is not right. The consensus among individual investors is that the market is completely rigged in favor of the big brokerages, hedge funds and other not-so-visible participants and have thus departed, some for good.
There's also the question of overall liquidity which has affected the velocity or volume of trade. Smaller firms and individuals are strapped for cash, in addition to being wary of the market, and simply cannot play. This has been the resounding theme since mid-summer, and appears to be actually getting worse as the November elections near.
Indices and averages are being hoisted and levered down by the same parties in an attempt to lure in more suckers (investors), but nobody seems to want to play this game any more. It's pretty obvious that politics are going to play a huge role in the direction of stocks over the next few months, so, despite the market being an unsound place for money, there are two definite directional plays that could be made rather simply.
First, the powers that be are nearly certain to desire an end to the reign of Democrats. President Obama and his cohorts in congress haven't made many friends on Wall Street, so the big money is courting Republicans in the Fall. The first trade is to go short from now until the elections, with the best time to get out right at the end of October. After that, go long, presaging Republican victories in the House and maybe even taking a majority in the senate.
These moves have nothing to do with fundamentals, only with the perception Wall Street wishes to make. They and their Republican lackeys want the economy on its knees heading into November, showing the Democrats to be weak and ineffective, and they have the perfect vehicle with which to accomplish their goal, the thinly-traded, but highly-watched stock market. The Dow should fall below 9500 at some point in the next two months (should be there already), and then immediately after Republican wins on November 2, rally back above the magical 10,000 mark, probably going as high as 10,700 or thereabout.
Sad but probably true, the stock market is no longer a secure platform for trading stocks, but more a political vehicle of the controlling elite. Today's sorry volume figures - and all those of the past four weeks - give credence to this approach.
Stocks spent the entire day trading in a narrow range in the red, finishing at the lows of the day, indicating not only a lack of participation, but a lack of confidence. Not surprising, since the best the Obama administration can do these days to spur the economy is suggest another $50 billion be spent on roads, bridges and airport runways. While that's great for the concrete makers and construction workers, it has no meaning in the lives of average Americans who don't shovel, grind or gird.
Obama also outlined an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment and a $100 billion extension of business tax credits for R&D and, as usual, absolutely nothing for small businesses, those with between one and ten employees, which are the backbone of the economy and entrepreneurship. The federal government would better serve the people by just handing out checks to everyone or doing nothing rather than trotting out the old "infrastructure" canard. It's been done and accomplished nothing already, so another crack at it is merely more grandstanding by a president and advisors without clues. Tax breaks for big business also won't serve to stimulate growth in the economy or create jobs.
Dow 10,340.69, -107.24 (1.03%)
NASDAQ 2,208.89, -24.86 (1.11%)
S&P 500 1,091.84, -12.67 (1.15%)
NYSE Composite 6,959.94, -95.09 (1.35%)
Declining issues took the measure of advancers, 4366-1388, though new highs remained to the high side of new lows, 259-50, though these figures are likely being influenced significantly to the upside by the number of stocks recently delisted (a big secret) and the usual pumping up of otherwise losing issues. As explained earlier, volume continued to be absurdly low, to a point that is increasingly difficult to describe.
NASDAQ Volume 1,566,149,625
NYSE Volume 3,036,956,000
Oil was down again, losing 51 cents, to $74.09. Gold traded in record territory, up $8.10, to $1,257.30 at the close, while silver slipped a little after an impressive weeks-long run, dropping just three cents, to $19.88.
Trading was so thin and reaction to Obama's new proposals so negative, it left many wondering just how long the economy can hold on without another significant decline in not only stocks, but in the overall quality of life. Being that we're only in the second or third inning of this particular baseball analogy, there are sure to be more foul balls than home runs in coming months and years. The market could spin out of control at any time, though the small number of players left on the field might prevent a real slide from happening with the ferocity witnessed in 2008 and 2009.
The continuing low-volume regime should surprise nobody. After shrinking from 4-6 per cent in August, the "marketeers" last week managed a roughly 4% rebound in just the first three days of September. Investors are not foolish people generally, and they can sense when something is not right. The consensus among individual investors is that the market is completely rigged in favor of the big brokerages, hedge funds and other not-so-visible participants and have thus departed, some for good.
There's also the question of overall liquidity which has affected the velocity or volume of trade. Smaller firms and individuals are strapped for cash, in addition to being wary of the market, and simply cannot play. This has been the resounding theme since mid-summer, and appears to be actually getting worse as the November elections near.
Indices and averages are being hoisted and levered down by the same parties in an attempt to lure in more suckers (investors), but nobody seems to want to play this game any more. It's pretty obvious that politics are going to play a huge role in the direction of stocks over the next few months, so, despite the market being an unsound place for money, there are two definite directional plays that could be made rather simply.
First, the powers that be are nearly certain to desire an end to the reign of Democrats. President Obama and his cohorts in congress haven't made many friends on Wall Street, so the big money is courting Republicans in the Fall. The first trade is to go short from now until the elections, with the best time to get out right at the end of October. After that, go long, presaging Republican victories in the House and maybe even taking a majority in the senate.
These moves have nothing to do with fundamentals, only with the perception Wall Street wishes to make. They and their Republican lackeys want the economy on its knees heading into November, showing the Democrats to be weak and ineffective, and they have the perfect vehicle with which to accomplish their goal, the thinly-traded, but highly-watched stock market. The Dow should fall below 9500 at some point in the next two months (should be there already), and then immediately after Republican wins on November 2, rally back above the magical 10,000 mark, probably going as high as 10,700 or thereabout.
Sad but probably true, the stock market is no longer a secure platform for trading stocks, but more a political vehicle of the controlling elite. Today's sorry volume figures - and all those of the past four weeks - give credence to this approach.
Stocks spent the entire day trading in a narrow range in the red, finishing at the lows of the day, indicating not only a lack of participation, but a lack of confidence. Not surprising, since the best the Obama administration can do these days to spur the economy is suggest another $50 billion be spent on roads, bridges and airport runways. While that's great for the concrete makers and construction workers, it has no meaning in the lives of average Americans who don't shovel, grind or gird.
Obama also outlined an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment and a $100 billion extension of business tax credits for R&D and, as usual, absolutely nothing for small businesses, those with between one and ten employees, which are the backbone of the economy and entrepreneurship. The federal government would better serve the people by just handing out checks to everyone or doing nothing rather than trotting out the old "infrastructure" canard. It's been done and accomplished nothing already, so another crack at it is merely more grandstanding by a president and advisors without clues. Tax breaks for big business also won't serve to stimulate growth in the economy or create jobs.
Dow 10,340.69, -107.24 (1.03%)
NASDAQ 2,208.89, -24.86 (1.11%)
S&P 500 1,091.84, -12.67 (1.15%)
NYSE Composite 6,959.94, -95.09 (1.35%)
Declining issues took the measure of advancers, 4366-1388, though new highs remained to the high side of new lows, 259-50, though these figures are likely being influenced significantly to the upside by the number of stocks recently delisted (a big secret) and the usual pumping up of otherwise losing issues. As explained earlier, volume continued to be absurdly low, to a point that is increasingly difficult to describe.
NASDAQ Volume 1,566,149,625
NYSE Volume 3,036,956,000
Oil was down again, losing 51 cents, to $74.09. Gold traded in record territory, up $8.10, to $1,257.30 at the close, while silver slipped a little after an impressive weeks-long run, dropping just three cents, to $19.88.
Trading was so thin and reaction to Obama's new proposals so negative, it left many wondering just how long the economy can hold on without another significant decline in not only stocks, but in the overall quality of life. Being that we're only in the second or third inning of this particular baseball analogy, there are sure to be more foul balls than home runs in coming months and years. The market could spin out of control at any time, though the small number of players left on the field might prevent a real slide from happening with the ferocity witnessed in 2008 and 2009.
Tuesday, August 24, 2010
More Stumbling Along for Stocks as US Economy Slowly Crumbles
Anyone under the age of 60 as of this date (you'd have to be born on or after August 24, 1950) who believes that they'll be getting all of their promised Social Security benefits when they reach the age of 65... what's that? President Clinton and the Republican-led congress raised the retirement age to 67? Oh, that's right, I completely forgot that the government changes the rules as they go along...
So, where was I? Right. If you are under the age of 60 and actually believe that Social Security (already paying out more than it takes in) will pay you, beginning at age 67, what they say you're actually due, you need a reality check, not a government check. The federal government is technically insolvent, has been for years and the situation continues to worsen every day politicians dance around the issues of unfunded liabilities such as Social Security and Medicare. The future obligations of those two entitlements alone amount to something in the range of $53 to $85 trillion, completely dwarfing the more-readily recognized national debt, which itself is an abomination at over $12 trillion.
These debts and obligations are a large part of the problem causing individuals, businesses and investors to stop cold in their tracks when attempting to make buying decisions. The overburden of these debts, brought about by a congress - and a public that allowed it - which binged on debt and the former surpluses in the programs (at least in the case of Social Security) are just one issue facing the US economy. There are many others, but these are the big ones, and they will absolutely kill the US economy, the only question being when.
I don't purport to have an answer to that, though it would be prudent to not rely on any future income promised by the US government, and to a lesser degree, any state or municipality simply because the money just isn't there. Baby Boomers are heading directly into the Social Security pool and the burden on current earners will be unbearable unless remedies are found, and soon.
Unfortunately, nobody in Washington is willing to touch the issue until, at the very earliest, January of next year, when a new congress will be installed. Don't count on any meaningful reforms any time soon, however, as the candidates for federal offices - congressmen and senators - are not even as well-qualified as the ones currently holding office, and this bunch isn't very good at anything.
So, America continues to stumble through the worst recession since the 1930s a ship without a rudder, or a sail. We are just drifting along, nobody knowing exactly which direction we're going, when we'll arrive or what awaits us when we get there.
Consensus opinion is leaning toward believing that wherever we're going, the destination will be a bleak and desolate place, especially when we get economic data like that released by the NAR today, showing existing home sales falling to their lowest levels since the National Association of Realtors began tracking the numbers in 1999.
This kind of bleak economic picture is not welcome to investors of any stripe. People are scared, bordering on desperation from a housing and employment collapse which are symptoms of even bigger ills, debt and dwindling resources.
Dow 10,040.45, -133.96 (1.32%)
NASDAQ 2,123.76, -35.87 (1.66%)
S&P 500 1,051.87, -15.49 (1.45%)
NYSE Composite 6,681.03, -103.94 (1.53%)
Declining issues finished the session well ahead of advancers, 4439-1402. New lows shot past new highs, 416-190, marking a complete turnover in that indicator. Volume was a bit higher than previous slow sessions, though, on a down day, that has to be viewed as a negative.
NASDAQ Volume 1,885,569,250
NYSE Volume 4,631,528,500
Oil continued its relentless slide, which, during the month of August, is alarming. Crude usually improves price-wise during the summer, though this year has remained largely range-bound. Crude fell another $1.47, to $71.63 on the day.
Precious metals were the only safe haven. Gold gained 4.80, to $1,231.80, while silver ramped ahead by more than 2%, up 39 cents, to $18.37.
The litany of sour economic news continues apace, and though it would be welcome for a bit of good news on the economy, none seems forthcoming. The US and global economies are stumbling badly with no apparent end in sight.
So, where was I? Right. If you are under the age of 60 and actually believe that Social Security (already paying out more than it takes in) will pay you, beginning at age 67, what they say you're actually due, you need a reality check, not a government check. The federal government is technically insolvent, has been for years and the situation continues to worsen every day politicians dance around the issues of unfunded liabilities such as Social Security and Medicare. The future obligations of those two entitlements alone amount to something in the range of $53 to $85 trillion, completely dwarfing the more-readily recognized national debt, which itself is an abomination at over $12 trillion.
These debts and obligations are a large part of the problem causing individuals, businesses and investors to stop cold in their tracks when attempting to make buying decisions. The overburden of these debts, brought about by a congress - and a public that allowed it - which binged on debt and the former surpluses in the programs (at least in the case of Social Security) are just one issue facing the US economy. There are many others, but these are the big ones, and they will absolutely kill the US economy, the only question being when.
I don't purport to have an answer to that, though it would be prudent to not rely on any future income promised by the US government, and to a lesser degree, any state or municipality simply because the money just isn't there. Baby Boomers are heading directly into the Social Security pool and the burden on current earners will be unbearable unless remedies are found, and soon.
Unfortunately, nobody in Washington is willing to touch the issue until, at the very earliest, January of next year, when a new congress will be installed. Don't count on any meaningful reforms any time soon, however, as the candidates for federal offices - congressmen and senators - are not even as well-qualified as the ones currently holding office, and this bunch isn't very good at anything.
So, America continues to stumble through the worst recession since the 1930s a ship without a rudder, or a sail. We are just drifting along, nobody knowing exactly which direction we're going, when we'll arrive or what awaits us when we get there.
Consensus opinion is leaning toward believing that wherever we're going, the destination will be a bleak and desolate place, especially when we get economic data like that released by the NAR today, showing existing home sales falling to their lowest levels since the National Association of Realtors began tracking the numbers in 1999.
This kind of bleak economic picture is not welcome to investors of any stripe. People are scared, bordering on desperation from a housing and employment collapse which are symptoms of even bigger ills, debt and dwindling resources.
Dow 10,040.45, -133.96 (1.32%)
NASDAQ 2,123.76, -35.87 (1.66%)
S&P 500 1,051.87, -15.49 (1.45%)
NYSE Composite 6,681.03, -103.94 (1.53%)
Declining issues finished the session well ahead of advancers, 4439-1402. New lows shot past new highs, 416-190, marking a complete turnover in that indicator. Volume was a bit higher than previous slow sessions, though, on a down day, that has to be viewed as a negative.
NASDAQ Volume 1,885,569,250
NYSE Volume 4,631,528,500
Oil continued its relentless slide, which, during the month of August, is alarming. Crude usually improves price-wise during the summer, though this year has remained largely range-bound. Crude fell another $1.47, to $71.63 on the day.
Precious metals were the only safe haven. Gold gained 4.80, to $1,231.80, while silver ramped ahead by more than 2%, up 39 cents, to $18.37.
The litany of sour economic news continues apace, and though it would be welcome for a bit of good news on the economy, none seems forthcoming. The US and global economies are stumbling badly with no apparent end in sight.
Wednesday, August 4, 2010
A Thousand Points of (False) Hope
Stocks on the major indices closed near their highs of the day, pushing the averages ahead for the 14th time in the last 21 sessions - about a month's worth.
Most of the upside movement since the 4th of July holiday has been on lighter-than-normal volume, and today was certainly no exception. Out of a universe of over 3000 stocks, the top five most active on the NYSE accounted for 12.5% of the volume, a skewing to the degree of magnitude of nearly 100 times normal, proving that when analysts say that most people trade the same stocks, they surely aren't lying about it.
Those five stocks - Citigroup (C), Bank of America (BAC), Motorola (MOT), Pfizer (PFE) and Ford (F) all trade for under $20 per share and have since Autumn of 2008, when the systemic financial collapse made everyone rethink valuation models. It's patently clear that investors have gotten stuck in a routine, especially in the case of Citi and BofA, two stocks which, under better-managed conditions would have been bankrupted and de-listed long ago. The pair of zombie banks consistently lead the most actives, as gamblers attempt to profit from fairly large percentage moves in what have become, essentially, penny stocks.
Another interesting side note on those top five is that all but Bank of America posted a gain, though Citigroup's was only a slim penny advance. BofA dropped by 14 cents, making the two most actively traded stocks the worst of the bunch. One can only speculate as to why so many trades occur on these two dogs, but there are, almost without a doubt, plenty of sellers, long-term holders who a quietly slipping their money out of them.
The advances over the past three days have pushed the Dow to a 1000-point gain over the past month, putting them right at (for Fibonacci fans) a 67% retracement of the 1500-point decline which commenced from mid-April to the first days of July.
At what appears to be a key inflection point, stocks face an uphill battle to surpass the April high of 12,200 on the Dow. Since the latest move has been fueled largely by excellent second quarter results from a wide swath of companies (notably, neither BAC nor C among them), the propellant seems to be missing for the final push, replaced by two key data points: Thursday's unemployment claims figures and Friday's July non-farm payroll report.
There were an equal amount of groans and cheers this morning when ADP released its own private payroll report for July, showing 42,000 new jobs being created during the month. Since the report does not include government employment, it serves as a proxy for Friday's figures, which are likely to come in only slightly on the positive side or even negative, due to layoffs from expired census employment. Thursday morning's unemployment data will provide another clue.
It's probably safe to say, barring any outsize surprise on the upside, that stocks are ready for a reversal after a month in a fantasy zone, though those of the bearish camp will contend that the stock market does not represent the US economy, and thus will continue to climb on their own.
There is some degree of truth to that argument, but if US-based companies refuse to hire US citizens, as they have for the past two years (ad for some, much longer than that), there will be bottom-line damage eventually, unless the companies in question are doing 75% or more of their business outside the USA, in which case they should be listed on another, non-US exchange. The US market is still the largest and most important, and people without jobs cannot continue to buy good and services at a steadily-growing rate. Of course, should congress deem that unemployment benefits should continue indefinitely, beyond the currently-absurd 99 weeks, companies might as well just lay off all US employees and allow the government to pick up the tab.
ISM services index rose from 53.8 in June, to 54.3 in July, eliciting another big whoop from perma-bulls, various tea-partiers and clueless analysts, who seem to be everywhere at once this summer.
Dow 10,680.43, +44.05 (0.41%)
NASDAQ 2,303.57, +20.05 (0.88%)
S&P 500 1,127.24, +6.78 (0.61%)
NYSE Composite 7,182.14, +35.15 (0.49%)
Advancing issues dominated decliners on the day, 4577-1880; new highs soared past new lows, 408-68; but volume, as previously mentioned, was the real story, well below normal levels and embarrassingly below what used to serve as average prior to the 2008 meltdown.
NASDAQ Volume 1,881,489,125
NYSE Volume 4,293,061,500
Commodity traders seemed unable to gain traction. Oil paused, dropping 8 cents, to $82.47. Gold gained $8.50, to $1,193.70, though silver did not follow on, losing 14 cents to $18.26.
With new economic data on the horizon, there appears to be no new catalyst with which to lift equities near-term, and longer-term prospects, heading into 2011, also seem pinned to dim, or even false, hopes.
Most of the upside movement since the 4th of July holiday has been on lighter-than-normal volume, and today was certainly no exception. Out of a universe of over 3000 stocks, the top five most active on the NYSE accounted for 12.5% of the volume, a skewing to the degree of magnitude of nearly 100 times normal, proving that when analysts say that most people trade the same stocks, they surely aren't lying about it.
Those five stocks - Citigroup (C), Bank of America (BAC), Motorola (MOT), Pfizer (PFE) and Ford (F) all trade for under $20 per share and have since Autumn of 2008, when the systemic financial collapse made everyone rethink valuation models. It's patently clear that investors have gotten stuck in a routine, especially in the case of Citi and BofA, two stocks which, under better-managed conditions would have been bankrupted and de-listed long ago. The pair of zombie banks consistently lead the most actives, as gamblers attempt to profit from fairly large percentage moves in what have become, essentially, penny stocks.
Another interesting side note on those top five is that all but Bank of America posted a gain, though Citigroup's was only a slim penny advance. BofA dropped by 14 cents, making the two most actively traded stocks the worst of the bunch. One can only speculate as to why so many trades occur on these two dogs, but there are, almost without a doubt, plenty of sellers, long-term holders who a quietly slipping their money out of them.
The advances over the past three days have pushed the Dow to a 1000-point gain over the past month, putting them right at (for Fibonacci fans) a 67% retracement of the 1500-point decline which commenced from mid-April to the first days of July.
At what appears to be a key inflection point, stocks face an uphill battle to surpass the April high of 12,200 on the Dow. Since the latest move has been fueled largely by excellent second quarter results from a wide swath of companies (notably, neither BAC nor C among them), the propellant seems to be missing for the final push, replaced by two key data points: Thursday's unemployment claims figures and Friday's July non-farm payroll report.
There were an equal amount of groans and cheers this morning when ADP released its own private payroll report for July, showing 42,000 new jobs being created during the month. Since the report does not include government employment, it serves as a proxy for Friday's figures, which are likely to come in only slightly on the positive side or even negative, due to layoffs from expired census employment. Thursday morning's unemployment data will provide another clue.
It's probably safe to say, barring any outsize surprise on the upside, that stocks are ready for a reversal after a month in a fantasy zone, though those of the bearish camp will contend that the stock market does not represent the US economy, and thus will continue to climb on their own.
There is some degree of truth to that argument, but if US-based companies refuse to hire US citizens, as they have for the past two years (ad for some, much longer than that), there will be bottom-line damage eventually, unless the companies in question are doing 75% or more of their business outside the USA, in which case they should be listed on another, non-US exchange. The US market is still the largest and most important, and people without jobs cannot continue to buy good and services at a steadily-growing rate. Of course, should congress deem that unemployment benefits should continue indefinitely, beyond the currently-absurd 99 weeks, companies might as well just lay off all US employees and allow the government to pick up the tab.
ISM services index rose from 53.8 in June, to 54.3 in July, eliciting another big whoop from perma-bulls, various tea-partiers and clueless analysts, who seem to be everywhere at once this summer.
Dow 10,680.43, +44.05 (0.41%)
NASDAQ 2,303.57, +20.05 (0.88%)
S&P 500 1,127.24, +6.78 (0.61%)
NYSE Composite 7,182.14, +35.15 (0.49%)
Advancing issues dominated decliners on the day, 4577-1880; new highs soared past new lows, 408-68; but volume, as previously mentioned, was the real story, well below normal levels and embarrassingly below what used to serve as average prior to the 2008 meltdown.
NASDAQ Volume 1,881,489,125
NYSE Volume 4,293,061,500
Commodity traders seemed unable to gain traction. Oil paused, dropping 8 cents, to $82.47. Gold gained $8.50, to $1,193.70, though silver did not follow on, losing 14 cents to $18.26.
With new economic data on the horizon, there appears to be no new catalyst with which to lift equities near-term, and longer-term prospects, heading into 2011, also seem pinned to dim, or even false, hopes.
Thursday, May 13, 2010
All About Today's Reversal, And Why It Matters
The downturn in equity markets today should not have come as a surprise to anybody who understands charts and amrket dynamics.
A nice chart of the Dow covering the past six months reveals the condition. The market is sitting right on its 50-day moving average with no clear direction, though lower seems to be the most likely move as days progress.
Recall the events of the past 5 trading days: After the "flash crash" (thanks to the geniuses at CNBC for giving it a nickname) of last Thursday, the Dow sank on Friday, had a sharp opening gap up and maintained that stature on Monday, dipped a bit on Tuesday, rallied above the 50-day moving average on Wednesday, and today closed below that important measuring stick.
Now, there's an easier way to look at these events, especially if you're a cynical observer such as I. After scooping up shares at the bottom on Thursday and Friday, the power players behind the scenes made fast cash on Monday, sold a little more on Tuesday, sucked in more late-comers on Wednesday and now are selling in earnest. The moves are being made in conjunction with various and many stock option plays, the May variety which expire on Friday, the 21st, being the most active.
Depending on how badly these power players - the same group likely behind the flash crash and other recent organized selling - want to hit the little guys on the other end of trades - and how soon - this little episode could take on some very interesting dimensions. They might be over-weighted on the long end, or they could be itching for another downdraft. The latter would make more sense from a chartist's perspective. Once a market breaks through a key level - like the 50-day MA - the corresponding next moves are usually more of the same, and this move was one of significantly violent quality, so the downside appears to be the more obvious choice.
Of course, these insiders are a savvy bunch and they've likely already discounted the idea that the market should behave in patterned ways, so they just might keep stocks chugging along, mirroring the 50-day until options expire. The cynical view is that they bought close to the bottom and are slowly selling at fat profits presently, though, and that patten should continue.
At the end of today's trading, there was a rush for the exits. Stocks closed at their lows of the session, which is one of the more profound daily indicators one can find. It indicates a real reluctance to maintain positions and even less commitment to any new purchases.
Dow 10,782.95, -113.96 (1.05%)
NASDAQ 2,394.36, -30.66 (1.26%)
S&P 500 1,157.43, -14.24 (1.22%)
NYSE Composite 7,234.37, -81.99 (1.12%)
On the day, decliners took the advantage over advancing issues, 4193-2349. There were 192 new highs to a paltry 53 new lows. This is an interesting development. The market is holding judgement in abeyance, perhaps awaiting some catalyst, or just marking time until the next move lower. Volume was down for the third consecutive day, another indication that the markets are poised to head even lower, likely back to test the Friday intra-day low of 10,221.50.
NYSE Volume 5,477,719,500.00
NASDAQ Volume 2,321,865,500.00
Commodity prices continued to cool. Crude oil maintained its relentless slide, losing another $1.25 per barrel, to $74.40. Even gold bugs were either spooked or taking profits, sending the price down by $13.90 per ounce, to $1,228.80. Silver also ran down 16 cents, to $19.48.
Much of today's selling was blamed on some interesting and disturbing comments from mainstream retailer Kohl's, which issued 2nd quarter fiscal 2010 guidance that fell short of expectations and noted that the average amount per transaction was down in the most recent quarter. Macy's also cited the same metric, days ago. With retailers cautious about consumer spending, they are acting as the canaries in the coal mine, warning that the current recovery - if one exists at all - may not be sustained. If they're right, stocks will find no bottom in the near term and the remainder of the year may be a wipeout for many corporations.
It's interesting to note that the January indicator predicted that 2010 would be a down year for stocks and maintains a solid record of correctly predicting the future economy, somewhere in the range of 85% accurate. Since the major indices are right about where they began the year, that long-ago (4 months) indicator overhangs the market like the sword of Damocles.
While Wall Street pondered its own fate, oil continues to surge from beneath the ocean into the Gulf of Mexico. With the disaster now entering its 4th week without resolution, the slick continues to grow and the oil continues to flow. That oil will go somewhere, eventually, but the drama is playing out in what appears to be a slow-motion nightmare on Bourbon Street.
At the end of it all, expect to see the end of the rig company, Transocean, drowned in a sea of lawsuits. The CEO of BP, Tony Hayward, almost certainly will be sacked, if the company even survives. As for Halliburton, the love-child of former US VP, that company seems to be born under a lucky star. The damage to the Gulf waters, the shorelands and the wetlands may be unbearable and unresolved for years to come.
A nice chart of the Dow covering the past six months reveals the condition. The market is sitting right on its 50-day moving average with no clear direction, though lower seems to be the most likely move as days progress.
Recall the events of the past 5 trading days: After the "flash crash" (thanks to the geniuses at CNBC for giving it a nickname) of last Thursday, the Dow sank on Friday, had a sharp opening gap up and maintained that stature on Monday, dipped a bit on Tuesday, rallied above the 50-day moving average on Wednesday, and today closed below that important measuring stick.
Now, there's an easier way to look at these events, especially if you're a cynical observer such as I. After scooping up shares at the bottom on Thursday and Friday, the power players behind the scenes made fast cash on Monday, sold a little more on Tuesday, sucked in more late-comers on Wednesday and now are selling in earnest. The moves are being made in conjunction with various and many stock option plays, the May variety which expire on Friday, the 21st, being the most active.
Depending on how badly these power players - the same group likely behind the flash crash and other recent organized selling - want to hit the little guys on the other end of trades - and how soon - this little episode could take on some very interesting dimensions. They might be over-weighted on the long end, or they could be itching for another downdraft. The latter would make more sense from a chartist's perspective. Once a market breaks through a key level - like the 50-day MA - the corresponding next moves are usually more of the same, and this move was one of significantly violent quality, so the downside appears to be the more obvious choice.
Of course, these insiders are a savvy bunch and they've likely already discounted the idea that the market should behave in patterned ways, so they just might keep stocks chugging along, mirroring the 50-day until options expire. The cynical view is that they bought close to the bottom and are slowly selling at fat profits presently, though, and that patten should continue.
At the end of today's trading, there was a rush for the exits. Stocks closed at their lows of the session, which is one of the more profound daily indicators one can find. It indicates a real reluctance to maintain positions and even less commitment to any new purchases.
Dow 10,782.95, -113.96 (1.05%)
NASDAQ 2,394.36, -30.66 (1.26%)
S&P 500 1,157.43, -14.24 (1.22%)
NYSE Composite 7,234.37, -81.99 (1.12%)
On the day, decliners took the advantage over advancing issues, 4193-2349. There were 192 new highs to a paltry 53 new lows. This is an interesting development. The market is holding judgement in abeyance, perhaps awaiting some catalyst, or just marking time until the next move lower. Volume was down for the third consecutive day, another indication that the markets are poised to head even lower, likely back to test the Friday intra-day low of 10,221.50.
NYSE Volume 5,477,719,500.00
NASDAQ Volume 2,321,865,500.00
Commodity prices continued to cool. Crude oil maintained its relentless slide, losing another $1.25 per barrel, to $74.40. Even gold bugs were either spooked or taking profits, sending the price down by $13.90 per ounce, to $1,228.80. Silver also ran down 16 cents, to $19.48.
Much of today's selling was blamed on some interesting and disturbing comments from mainstream retailer Kohl's, which issued 2nd quarter fiscal 2010 guidance that fell short of expectations and noted that the average amount per transaction was down in the most recent quarter. Macy's also cited the same metric, days ago. With retailers cautious about consumer spending, they are acting as the canaries in the coal mine, warning that the current recovery - if one exists at all - may not be sustained. If they're right, stocks will find no bottom in the near term and the remainder of the year may be a wipeout for many corporations.
It's interesting to note that the January indicator predicted that 2010 would be a down year for stocks and maintains a solid record of correctly predicting the future economy, somewhere in the range of 85% accurate. Since the major indices are right about where they began the year, that long-ago (4 months) indicator overhangs the market like the sword of Damocles.
While Wall Street pondered its own fate, oil continues to surge from beneath the ocean into the Gulf of Mexico. With the disaster now entering its 4th week without resolution, the slick continues to grow and the oil continues to flow. That oil will go somewhere, eventually, but the drama is playing out in what appears to be a slow-motion nightmare on Bourbon Street.
At the end of it all, expect to see the end of the rig company, Transocean, drowned in a sea of lawsuits. The CEO of BP, Tony Hayward, almost certainly will be sacked, if the company even survives. As for Halliburton, the love-child of former US VP, that company seems to be born under a lucky star. The damage to the Gulf waters, the shorelands and the wetlands may be unbearable and unresolved for years to come.
Wednesday, May 12, 2010
Bump and Grind and All is Golden
Monday was the bump higher, Tuesday and Wednesday turned out to be significant grinders as investors regained confidence and continued to scoop up stocks since there's nothing else to buy besides maybe gold and treasuries, and the latter isn't granting much of a return these days.
Speculation is back in vogue, now that the latest crisis has passed from public view, though there will certainly be issues going forward, as always.
Dow 10,896.91, +148.65 (1.38%)
NASDAQ 2,425.02, +49.71 (2.09%)
S&P 500 1,171.67, +15.88 (1.37%)
NYSE Composite 7,316.36, +94.70 (1.31%)
Once again, advancing issues finished far ahead of decliners, 5470-1122; 195 new highs outpaced just 58 new lows. As much as the rally seemed vibrant and flourishing, volume declined for the third straight day, reinforcing the notion that while all the attention was focused on stocks going higher, there were wise guys taking some slivers of profit while the herd pushed to the extremes.
NYSE Volume 5,929,432,500.00
NASDAQ Volume 2,308,404,000.00
Gold continued to dominate the commodity space, breaking through to fresh all-time highs, another sign that global economies aren't quite as fit as their leaders would have you believe. The shiny stuff was up another $22.80, to $1,242.70 on the day. Silver gained 37 cents, to finish at $19.64. The metals have parted ways with oil significantly this week, as crude fell 72 cents to $75.65, while motorists are still anxiously awaiting a similar price reduction at the pump.
Despite the coming arrival of summer, oil, if the price were not so ham-handedly manipulated, could reach even lower levels around the $60/barrel mark by mid-July, though the sheiks and barons probably won't allow that to occur, instead focusing on limiting supply and choking consumers. Gold will continue to rocket higher in coming months unless sovereign economies actually discover fiscal integrity - an unlikely occurrence.
Speculation is back in vogue, now that the latest crisis has passed from public view, though there will certainly be issues going forward, as always.
Dow 10,896.91, +148.65 (1.38%)
NASDAQ 2,425.02, +49.71 (2.09%)
S&P 500 1,171.67, +15.88 (1.37%)
NYSE Composite 7,316.36, +94.70 (1.31%)
Once again, advancing issues finished far ahead of decliners, 5470-1122; 195 new highs outpaced just 58 new lows. As much as the rally seemed vibrant and flourishing, volume declined for the third straight day, reinforcing the notion that while all the attention was focused on stocks going higher, there were wise guys taking some slivers of profit while the herd pushed to the extremes.
NYSE Volume 5,929,432,500.00
NASDAQ Volume 2,308,404,000.00
Gold continued to dominate the commodity space, breaking through to fresh all-time highs, another sign that global economies aren't quite as fit as their leaders would have you believe. The shiny stuff was up another $22.80, to $1,242.70 on the day. Silver gained 37 cents, to finish at $19.64. The metals have parted ways with oil significantly this week, as crude fell 72 cents to $75.65, while motorists are still anxiously awaiting a similar price reduction at the pump.
Despite the coming arrival of summer, oil, if the price were not so ham-handedly manipulated, could reach even lower levels around the $60/barrel mark by mid-July, though the sheiks and barons probably won't allow that to occur, instead focusing on limiting supply and choking consumers. Gold will continue to rocket higher in coming months unless sovereign economies actually discover fiscal integrity - an unlikely occurrence.
Wednesday, March 3, 2010
Stocks Sucking Wind; Oil Futures Out of Control
The persistent pattern of sideways trade held sway one more day on Wall Street, despite the ADP private employment report offering a glimpse of Friday's government non-farm payroll data. The ADP report showed employers shedding 20,000 jobs in February, which was better than most analysts were seeking. Still, those numbers - and a rise in ISM service index from 50.5 to 53.0 from January to February - hardly moved the needle.
Naturally, there were a good share of both winners and losers, but the overall markets are about as stagnant as a Louisiana swamp. The problem is that these stocks represent real money, currently not working very hard for anybody.
Dow 10,396.76, -9.22 (0.09%)
NASDAQ 2,280.68, -0.11 (0.00%)
S&P 500 1,118.79, +0.48 (0.04%)
NYSE Composite 7,164.66, +28.69 (0.40%)
Advancing issues beat back decliners once again, 3575-2890, though the margin was not nearly as large as in recent days. New highs led new lows, 555-45. Volume was led by the NASDAQ. The NYSE continues to exhibit signs of flagging interest with low volume a daily occurrence.
NYSE Volume 4,475,734,000
NASDAQ Volume 2,474,973,500
Meanwhile, commodities, especially those in the energy sector, were spinning out of control. Oil shot up another $1.27, to $80.95, with April wholesale gas futures at multi-month highs of $2.25/gallon. Gold gained $6.60, to $1,144.00. Silver was up 25 cents, to $17.31.
The outlook for the February non-farm payroll data due out Friday morning continues to be clouded by forecasts that snow storms during the month may have skewed the data significantly. Also in play is the hiring of workers for the 2010 census. That was supposed to boost employment significantly over 2nd and 3rd quarters of the year, though the effect probably won't be felt until the march data is released a month from now.
Naturally, there were a good share of both winners and losers, but the overall markets are about as stagnant as a Louisiana swamp. The problem is that these stocks represent real money, currently not working very hard for anybody.
Dow 10,396.76, -9.22 (0.09%)
NASDAQ 2,280.68, -0.11 (0.00%)
S&P 500 1,118.79, +0.48 (0.04%)
NYSE Composite 7,164.66, +28.69 (0.40%)
Advancing issues beat back decliners once again, 3575-2890, though the margin was not nearly as large as in recent days. New highs led new lows, 555-45. Volume was led by the NASDAQ. The NYSE continues to exhibit signs of flagging interest with low volume a daily occurrence.
NYSE Volume 4,475,734,000
NASDAQ Volume 2,474,973,500
Meanwhile, commodities, especially those in the energy sector, were spinning out of control. Oil shot up another $1.27, to $80.95, with April wholesale gas futures at multi-month highs of $2.25/gallon. Gold gained $6.60, to $1,144.00. Silver was up 25 cents, to $17.31.
The outlook for the February non-farm payroll data due out Friday morning continues to be clouded by forecasts that snow storms during the month may have skewed the data significantly. Also in play is the hiring of workers for the 2010 census. That was supposed to boost employment significantly over 2nd and 3rd quarters of the year, though the effect probably won't be felt until the march data is released a month from now.
Friday, July 10, 2009
China Exports, Fed Investigation Fuel US Stock Sell-Off
News from the People's Republic of China (the most Westernized Communist nation ever) that imports rose 13.2% while exports fell 21.4% in June underscored the sheer depth of worldwide trade contraction (a better word than depression, but along the same meaning). In the prior month, China's trade balance fell to a paltry $8.25 billion, a far cry from the enormous trade surplus during the mid-2000s.
Since the US economy has contracted at an alarming rate over the past year, China has suffered the consequences of being too-highly dependent upon one major trading partner. For its part, the Chinese will likely devote heavy sums of its manpower and money to infrastructure development and strengthening the domestic economy over the next two to three years, areas ripe for growth.
Compared to the US, China can outspend America for years on building new bridges, buildings, rail and highways, and not bat an economic eyelash, most of its development financed by domestic banks. To the contrary, the US has to borrow its way back to "prosperity" and doesn't have nearly the real need for new infrastructure the Chinese do, though repairing much of the existing stock is a tall order.
In the end, somewhere around 2013, China will rival the United States as the dominant economic power in the world, and they'll have done so without firing a shot - although waging a military war with the Chinese is surely a last-gasp scenario in secret DC boardrooms.
There's little doubt that China is the ascendant power of the 21st century, just as America was the powerhouse in the century prior. Now that we have shipped our manufacturing over to mainland China, there's no chance of retaining our dominant position. It will not happen overnight, or suddenly, but slowly and less painfully for US interests, but betting on America's future is a fool's gambit. Our economy is shrinking while our debt enlarges. It is a recipe for catastrophe and the winner will be China.
Also of note on the final day of the week is the call by 3 Democrat and 14 Republican House members for the Obama administration to investigate the Federal Reserve over its role in the Bank of America/Merrill Lynch merger. While the House members' move sounds interesting and potentially a blockbuster, it's more than likely nothing more than bluster and grandstanding. The Administration is not going to peer too deeply or with any grand degree of rigor into the activities of its own operatives. While there's little doubt Henry Paulson and Ben Bernanke pressured BofA to do the deal and save Merrill from bankruptcy - which would have triggered more financial fallout and stock losses - nobody in the world is going to get anyone from Treasury or the Fed to 'fess up to that dirty deed.
The news did send some shockwaves across the market, however, as stocks continued to reel for a fourth straight week. On the Dow, the 8146 finish was the lowest since April 28 and a loss of 134 points on the week. All of the major indices except the NASDAQ opened on the negative side of the ledger and stayed there throughout the session. While NASDAQ finally finished in the green, damage was limited by a late-day short-covering rally on extremely low volume.
Nine of 12 sectors were lower, with Transportation, Consumer Cyclicals and Technology the only winners.
Dow 8,146.52, -36.65 (0.45%)
Nasdaq 1,756.03, +3.48 (0.20%)
S&P 500 879.13, -3.55 (0.40%)
NYSE Composite 5,627.52, -39.85 (0.70%)
Declining issues outweighed gainers, 3227-3021, but new lows continued to dominate new highs, 99-23, on the day. Volume again was anemic, appearing to be the lowest single-day number of shares traded since the first trading day of the year, January 2.
NYSE Volume 922,061,000
NASDAQ Volume 1,673,932,000
Crude oil for August delivery closed down 52 cents, passing the psychological $60 mark, at $59.89. Gold dipped $3.70, to $912.50, with silver down 29 cents to $12.65. If one is seeking a gauge for deflation, there's likely no better place to look than to commodities, a leading indicator. They have taken some time to fully commit, but there are indications aplenty that raw material prices have fallen and are staying down. Lack of demand will continue to erode raw material prices now that China has eased up on some of its buying. If there was a time to sell commodities - especially metals and energy - it was over the last two weeks. The stampede for the exits may only be beginning.
Looking ahead to next week, which will be chock-full of earnings reports, the banking sector may predominate, as Goldman Sachs (GS), JP Morgan Chase (JPM), Citigroup (C), and Bank of America (BAC) will all issue 2nd quarter results.
Since the US economy has contracted at an alarming rate over the past year, China has suffered the consequences of being too-highly dependent upon one major trading partner. For its part, the Chinese will likely devote heavy sums of its manpower and money to infrastructure development and strengthening the domestic economy over the next two to three years, areas ripe for growth.
Compared to the US, China can outspend America for years on building new bridges, buildings, rail and highways, and not bat an economic eyelash, most of its development financed by domestic banks. To the contrary, the US has to borrow its way back to "prosperity" and doesn't have nearly the real need for new infrastructure the Chinese do, though repairing much of the existing stock is a tall order.
In the end, somewhere around 2013, China will rival the United States as the dominant economic power in the world, and they'll have done so without firing a shot - although waging a military war with the Chinese is surely a last-gasp scenario in secret DC boardrooms.
There's little doubt that China is the ascendant power of the 21st century, just as America was the powerhouse in the century prior. Now that we have shipped our manufacturing over to mainland China, there's no chance of retaining our dominant position. It will not happen overnight, or suddenly, but slowly and less painfully for US interests, but betting on America's future is a fool's gambit. Our economy is shrinking while our debt enlarges. It is a recipe for catastrophe and the winner will be China.
Also of note on the final day of the week is the call by 3 Democrat and 14 Republican House members for the Obama administration to investigate the Federal Reserve over its role in the Bank of America/Merrill Lynch merger. While the House members' move sounds interesting and potentially a blockbuster, it's more than likely nothing more than bluster and grandstanding. The Administration is not going to peer too deeply or with any grand degree of rigor into the activities of its own operatives. While there's little doubt Henry Paulson and Ben Bernanke pressured BofA to do the deal and save Merrill from bankruptcy - which would have triggered more financial fallout and stock losses - nobody in the world is going to get anyone from Treasury or the Fed to 'fess up to that dirty deed.
The news did send some shockwaves across the market, however, as stocks continued to reel for a fourth straight week. On the Dow, the 8146 finish was the lowest since April 28 and a loss of 134 points on the week. All of the major indices except the NASDAQ opened on the negative side of the ledger and stayed there throughout the session. While NASDAQ finally finished in the green, damage was limited by a late-day short-covering rally on extremely low volume.
Nine of 12 sectors were lower, with Transportation, Consumer Cyclicals and Technology the only winners.
Dow 8,146.52, -36.65 (0.45%)
Nasdaq 1,756.03, +3.48 (0.20%)
S&P 500 879.13, -3.55 (0.40%)
NYSE Composite 5,627.52, -39.85 (0.70%)
Declining issues outweighed gainers, 3227-3021, but new lows continued to dominate new highs, 99-23, on the day. Volume again was anemic, appearing to be the lowest single-day number of shares traded since the first trading day of the year, January 2.
NYSE Volume 922,061,000
NASDAQ Volume 1,673,932,000
Crude oil for August delivery closed down 52 cents, passing the psychological $60 mark, at $59.89. Gold dipped $3.70, to $912.50, with silver down 29 cents to $12.65. If one is seeking a gauge for deflation, there's likely no better place to look than to commodities, a leading indicator. They have taken some time to fully commit, but there are indications aplenty that raw material prices have fallen and are staying down. Lack of demand will continue to erode raw material prices now that China has eased up on some of its buying. If there was a time to sell commodities - especially metals and energy - it was over the last two weeks. The stampede for the exits may only be beginning.
Looking ahead to next week, which will be chock-full of earnings reports, the banking sector may predominate, as Goldman Sachs (GS), JP Morgan Chase (JPM), Citigroup (C), and Bank of America (BAC) will all issue 2nd quarter results.
Tuesday, July 7, 2009
Bears Bag More Bulls
Those "green shoots" we heard so much about in April and May have apparently withered and died with the onset of summer. Fact of the matter is that the US economy is being kept afloat by a combination of stimulus money, bank accounting rules changes, gobs and gobs of fresh currency via the Federal Reserve and the burgeoning welfare-government state.
US consumers are alternately tapped out or scared, or both, and the tiny steps the federal government has employed thus far have done little to stimulate the economy. Trade flows are down, sales everywhere have redlined and state governments are on the verge of default. In California and New York, the two largest states by population, tax revenues have not kept pace with projections. Incomes are stagnant and tax increases have not filled the budget gaps which threaten to implode the entire apparatus of those two state governments.
With the economy in such desperate throes, stocks - and, for that matter, all other asset classes - cannot sustain current price levels, especially after the huge run-up from March through June. Stocks fell to their worst levels in two months as the Obama administration begins touting another round of stimulus, the latest trial balloon coming from presidential advisor Laura Tyson.
The problem with more stimulus is that it is exactly what won't work. Job creation programs for small business and fiscal restraint from Capitol Hill and state assemblies are the proper medicine. Government spending, the Keynesian solution, is simply piling up new debt that has to be repaid at some later date. The American people have had their fill of deficit spending, but the voices calling for restraint have been silenced and neutered by congress, the administration and the mainstream media. Instead of solving the crisis with spending cuts, the plain truth is that the government now is in a no-win position in which it has to keep spending to prevent the economy from falling even deeper into a deflationary spiral.
Government payments to welfare moms, disabled persons, and the aged are all that's keeping the US economy from complete collapse and taking down most of the rest of the world economies with it.
In all likelihood there will be another stimulus bill, aimed at selected, favored industry groups with their hands always out, instead of the rock-solid small business segment from which 2/3rds of all new jobs are created. We are entering an even more dangerous phase of the recession cycle: another retreat and round of job cuts is not far off. There simply has been no new job creation for more than 18 months, and with the recession by most accounts now stretching into month 20 or longer, it's time for the big wigs to admit that this one is different, longer, deeper and more serious than anyone has previously thought.
We're hurtling headlong into the most severe crisis in the history of our nation. Worse than the Great Depression and possibly even the Civil War. We are looking at the complete destruction of our financial system, fiat currency, Federal Reserve system and all the rest. The damage done by years of neglect, greed and horrible decisions by the Fed and Treasury is likely far beyond the understanding of even the brightest economists. We are in uncharted territory and the crowd which got us into it - the Larry Summers, Ben Bernankes, Tim Geithners, et. al., are uniquely unequipped to get us out of it.
By this time next year we could see vast segments of the economy completely wiped away, the currency (Federal Reserve Notes) unwanted by foreigners and US citizens alike, and a return to hard cash and barter. Nothing the government has done or will do (unless they have some miracle cure) will save us from currency debasement. It's going to be a long, hard time for many and not over in just a couple of months or years. This depression will last well into the next decade, probably until at least 2013.
On the day, stocks continued their descent back to the March lows. There's almost no doubt that we'll revisit the 6500 level on the Dow before year's end. The Dow has lost some 637 points since its close of 8799 on June 12.
Dow 8,163.60, -161.27 (1.94%)
Nasdaq 1,746.17, -41.23 (2.31%)
S&P 500 881.03, -17.69 (1.97%)
NYSE Composite 5,654.64, -115.36 (2.00%)
Today's trading was a continuation of Monday's downbeat tone, but with more participants on the selling side. Advancing issues were bludgeoned by losers, with declining issues ahead, 4879-1498. New lows continued their recent trend of outnumbering new highs, 76-43. Volume continued to be anemic, but these low trading levels are becoming a permanent feature of the market as many participants have either tapped out or left for either safer or more lucrative venues.
NYSE Volume 1,107,764,000
Nasdaq Volume 2,047,618,000
Oil took it on the chin again, losing $1.12, to $62.93. Other energy-related commodities registered similar declines. Gold bucked the trend with a gain of $4.80, finishing at $929.10. Silver lost 2 cents, to $13.22, just below the point at which old silver coins produce a melt value 10 times their face value.
Stocks and commodities should continue to fall over the next few weeks and continue their downward trajectory into the late summer and fall months. Second quarter earnings from US corporations are predicted to be marginally better than those from the first quarter, and how investors treat the news should provide direction for the overall market. The betting is that most will not be happy with "less bad" at this juncture. Investors with cash on the line will want to see actual improvement in reports. If not, profits will be quickly taken off the table, leading to another round of outright selling in which nobody wants to be left holding the bag. The final week of July and first two weeks of August could be quite disruptive to many portfolios, rivaling the declines seen last fall and earlier this year.
We are headed for a sizable shakeout. Alcoa (AA) starts the earnings parade on Wednesday.
US consumers are alternately tapped out or scared, or both, and the tiny steps the federal government has employed thus far have done little to stimulate the economy. Trade flows are down, sales everywhere have redlined and state governments are on the verge of default. In California and New York, the two largest states by population, tax revenues have not kept pace with projections. Incomes are stagnant and tax increases have not filled the budget gaps which threaten to implode the entire apparatus of those two state governments.
With the economy in such desperate throes, stocks - and, for that matter, all other asset classes - cannot sustain current price levels, especially after the huge run-up from March through June. Stocks fell to their worst levels in two months as the Obama administration begins touting another round of stimulus, the latest trial balloon coming from presidential advisor Laura Tyson.
The problem with more stimulus is that it is exactly what won't work. Job creation programs for small business and fiscal restraint from Capitol Hill and state assemblies are the proper medicine. Government spending, the Keynesian solution, is simply piling up new debt that has to be repaid at some later date. The American people have had their fill of deficit spending, but the voices calling for restraint have been silenced and neutered by congress, the administration and the mainstream media. Instead of solving the crisis with spending cuts, the plain truth is that the government now is in a no-win position in which it has to keep spending to prevent the economy from falling even deeper into a deflationary spiral.
Government payments to welfare moms, disabled persons, and the aged are all that's keeping the US economy from complete collapse and taking down most of the rest of the world economies with it.
In all likelihood there will be another stimulus bill, aimed at selected, favored industry groups with their hands always out, instead of the rock-solid small business segment from which 2/3rds of all new jobs are created. We are entering an even more dangerous phase of the recession cycle: another retreat and round of job cuts is not far off. There simply has been no new job creation for more than 18 months, and with the recession by most accounts now stretching into month 20 or longer, it's time for the big wigs to admit that this one is different, longer, deeper and more serious than anyone has previously thought.
We're hurtling headlong into the most severe crisis in the history of our nation. Worse than the Great Depression and possibly even the Civil War. We are looking at the complete destruction of our financial system, fiat currency, Federal Reserve system and all the rest. The damage done by years of neglect, greed and horrible decisions by the Fed and Treasury is likely far beyond the understanding of even the brightest economists. We are in uncharted territory and the crowd which got us into it - the Larry Summers, Ben Bernankes, Tim Geithners, et. al., are uniquely unequipped to get us out of it.
By this time next year we could see vast segments of the economy completely wiped away, the currency (Federal Reserve Notes) unwanted by foreigners and US citizens alike, and a return to hard cash and barter. Nothing the government has done or will do (unless they have some miracle cure) will save us from currency debasement. It's going to be a long, hard time for many and not over in just a couple of months or years. This depression will last well into the next decade, probably until at least 2013.
On the day, stocks continued their descent back to the March lows. There's almost no doubt that we'll revisit the 6500 level on the Dow before year's end. The Dow has lost some 637 points since its close of 8799 on June 12.
Dow 8,163.60, -161.27 (1.94%)
Nasdaq 1,746.17, -41.23 (2.31%)
S&P 500 881.03, -17.69 (1.97%)
NYSE Composite 5,654.64, -115.36 (2.00%)
Today's trading was a continuation of Monday's downbeat tone, but with more participants on the selling side. Advancing issues were bludgeoned by losers, with declining issues ahead, 4879-1498. New lows continued their recent trend of outnumbering new highs, 76-43. Volume continued to be anemic, but these low trading levels are becoming a permanent feature of the market as many participants have either tapped out or left for either safer or more lucrative venues.
NYSE Volume 1,107,764,000
Nasdaq Volume 2,047,618,000
Oil took it on the chin again, losing $1.12, to $62.93. Other energy-related commodities registered similar declines. Gold bucked the trend with a gain of $4.80, finishing at $929.10. Silver lost 2 cents, to $13.22, just below the point at which old silver coins produce a melt value 10 times their face value.
Stocks and commodities should continue to fall over the next few weeks and continue their downward trajectory into the late summer and fall months. Second quarter earnings from US corporations are predicted to be marginally better than those from the first quarter, and how investors treat the news should provide direction for the overall market. The betting is that most will not be happy with "less bad" at this juncture. Investors with cash on the line will want to see actual improvement in reports. If not, profits will be quickly taken off the table, leading to another round of outright selling in which nobody wants to be left holding the bag. The final week of July and first two weeks of August could be quite disruptive to many portfolios, rivaling the declines seen last fall and earlier this year.
We are headed for a sizable shakeout. Alcoa (AA) starts the earnings parade on Wednesday.
Tuesday, June 23, 2009
Stocks Continue to Slump on Low Volume
As expected, stocks are trading in dawdling fashion due to a dearth of economic reports and almost no news of note. This kind of slowness should continue for another two weeks at least, through the 4th of July weekend, before second quarter corporate earnings reports begin trickling to the market.
Until that time, there's little to get excited about, presenting a wide window of opportunity for investors to shift positions, take profits or get out of the way. We've seen some of this activity already expressed in the prior 9 or 10 sessions and are looking forward to more of the same. There simply isn't any catalyst working in either direction.
To say that the trading range was tight would be overstatement. The Dow covered a mere 84 points from top to bottom today; the S&P moved less than 10 points up and down through the session.
The NAR reported an uptick in existing home sales, to an annual rate of 4.77 million units in May. While the number was better than April's revised 4.66 million, it wasn't as good as the expectation number of 4.82. Overall, it was a real yawner for the market, signifying less than nothing.
Kroger (KR) reported increased profits on lower sales, citing more people eating at home for the profit uptick and lower prices for gas for the declining sales from the same period a year ago. That kind of data should influence Darden Restaurants (DRI), which reports tomorrow. The owners of Olive Garden, Red Lobster and other popular chains has been beating expectations for the past two quarters, contradicting generally-accepted trends. Tomorrow's report could be telling, one way or the other.
Dow 8,322.91, -16.10 (0.19%)
NASDAQ 1,764.92, -1.27 (0.07%)
S&P 500 895.10, +2.06 (0.23%)
NYSE Composite 5,759.49, +34.42 (0.60%)
Declining issues beat back advancers once more, 3496-2905. For the eighth consecutive session, new lows surpassed new highs, 70-21. Also, the gap between the two was the largest since the index reverted to its 21-month-old form after a brief period (6 sessions) with new highs on top. As the volume and velocity of trading slows to a crawl, sentiment seems to be expanding toward the negative at an accelerating rate. In this period, no news may turn out to be bad news.
NYSE Volume 1,209,363,000
NASDAQ Volume 2,171,108,000
Crude oil for August delivery (first day of the new contract) gained $1.74, to $69.24, while most other commodities posted marginal gains. Gold finished $3.30 higher, at $924.30; silver added 14 cents, to $13.85. While the prices of both gold and silver are quite a bit lower than, say, two weeks ago, they may not present the buying opportunity some see. If deflation continues to persist, all commodities will suffer, even the best-performing ones. Traditionally a hedge against inflation, gold, in particular, could find itself lower by as much as 20% in coming months.
Here's an excellent article on the relationship between the US dollar and stocks and commodities by Simon Maierhofer. The author supports my long-standing contention that deflation will persist as the dominant theme. I predict that prices will be down, the business condition tough, for more than two more years before inflation rears that ugly head again. Once more, the "experts" are completely in the dark as to the nature of price inflation or deflation. Despite the creation of trillions of dollars "out of thin air" now being vaporized in malinvestments, final demand is still slack and will continue to be so until economic conditions are rebalanced, and that's not going to happen for some time.
Until that time, there's little to get excited about, presenting a wide window of opportunity for investors to shift positions, take profits or get out of the way. We've seen some of this activity already expressed in the prior 9 or 10 sessions and are looking forward to more of the same. There simply isn't any catalyst working in either direction.
To say that the trading range was tight would be overstatement. The Dow covered a mere 84 points from top to bottom today; the S&P moved less than 10 points up and down through the session.
The NAR reported an uptick in existing home sales, to an annual rate of 4.77 million units in May. While the number was better than April's revised 4.66 million, it wasn't as good as the expectation number of 4.82. Overall, it was a real yawner for the market, signifying less than nothing.
Kroger (KR) reported increased profits on lower sales, citing more people eating at home for the profit uptick and lower prices for gas for the declining sales from the same period a year ago. That kind of data should influence Darden Restaurants (DRI), which reports tomorrow. The owners of Olive Garden, Red Lobster and other popular chains has been beating expectations for the past two quarters, contradicting generally-accepted trends. Tomorrow's report could be telling, one way or the other.
Dow 8,322.91, -16.10 (0.19%)
NASDAQ 1,764.92, -1.27 (0.07%)
S&P 500 895.10, +2.06 (0.23%)
NYSE Composite 5,759.49, +34.42 (0.60%)
Declining issues beat back advancers once more, 3496-2905. For the eighth consecutive session, new lows surpassed new highs, 70-21. Also, the gap between the two was the largest since the index reverted to its 21-month-old form after a brief period (6 sessions) with new highs on top. As the volume and velocity of trading slows to a crawl, sentiment seems to be expanding toward the negative at an accelerating rate. In this period, no news may turn out to be bad news.
NYSE Volume 1,209,363,000
NASDAQ Volume 2,171,108,000
Crude oil for August delivery (first day of the new contract) gained $1.74, to $69.24, while most other commodities posted marginal gains. Gold finished $3.30 higher, at $924.30; silver added 14 cents, to $13.85. While the prices of both gold and silver are quite a bit lower than, say, two weeks ago, they may not present the buying opportunity some see. If deflation continues to persist, all commodities will suffer, even the best-performing ones. Traditionally a hedge against inflation, gold, in particular, could find itself lower by as much as 20% in coming months.
Here's an excellent article on the relationship between the US dollar and stocks and commodities by Simon Maierhofer. The author supports my long-standing contention that deflation will persist as the dominant theme. I predict that prices will be down, the business condition tough, for more than two more years before inflation rears that ugly head again. Once more, the "experts" are completely in the dark as to the nature of price inflation or deflation. Despite the creation of trillions of dollars "out of thin air" now being vaporized in malinvestments, final demand is still slack and will continue to be so until economic conditions are rebalanced, and that's not going to happen for some time.
Tuesday, January 9, 2007
Blue Chips give back, Nasdaq counter-rallies
The Dow Jones Industrials were down more than fifty points by mid-day, but rallied to close with a minor loss of 6.89. The Nasdaq fared better, adding 5 points and change, closing positive for the 4th time in 5 sessions in the young year. The wider NYSE index lost 17.22 and that's where our counter-rally begins.
The Nasdaq is higher for the year, with the Dow and NYSE composite lower. The figures today are telling, with gainers outpacing losers on the NYSE, though down volume was 55%, up volume, 44%. Over on the Nasdaq the opposite was true.
As sure as Donald Trump dislikes Rosie O'Donnell, this is a sign of cyclical profit taking and reinvestment. Volume on the NYSE was far ahead of the Nasdaq, suggesting that massive profits are being pulled out of big caps and the only play is into smaller, albeit riskier issues. Much of the money taken in profits is being put aside until the market can be more reliably read and quarterly earnings get into full swing over the upcoming two weeks.
A good site for tracking earnings and lots of other useful advice is Earnings Whispers who also sees the Nasdaq counter-rally as indicative of a topping pattern. Finally, somebody with brains (and a web site) who agrees with us.
The Nasdaq is higher for the year, with the Dow and NYSE composite lower. The figures today are telling, with gainers outpacing losers on the NYSE, though down volume was 55%, up volume, 44%. Over on the Nasdaq the opposite was true.
As sure as Donald Trump dislikes Rosie O'Donnell, this is a sign of cyclical profit taking and reinvestment. Volume on the NYSE was far ahead of the Nasdaq, suggesting that massive profits are being pulled out of big caps and the only play is into smaller, albeit riskier issues. Much of the money taken in profits is being put aside until the market can be more reliably read and quarterly earnings get into full swing over the upcoming two weeks.
A good site for tracking earnings and lots of other useful advice is Earnings Whispers who also sees the Nasdaq counter-rally as indicative of a topping pattern. Finally, somebody with brains (and a web site) who agrees with us.
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