There was a bit of moderation on Friday, at the end of a week which saw the major averages give up plenty of downside.
With a dearth of data and corporate news, there were probably more than a few active traders taking the early train out of town during the lackluster session. Some bottom fishing did occur - though not much - as belied by the A-D line, which favored advancing issues, for a change and very low volume.
For the week, the Dow lost 264.84 points (1.65%); the S&P gave up 29.77 (1.65%); the NASDAQ fell 61,54 points (1.51%); and, the NYSE Composite declined by 176.38 (1.74%).
A telling sign of overall weakness is represented by the broadest index (NYSE Comp.) being the worst performer for the week in percentage terms. Notably, the composite average broke through its 50-day moving average yesterday and stabilized below it today. Each of the other indices have room to spare above their respective 50-day lines.
New lows continued their dominance over new highs for the third straight session, 147-114. While that is by no means a trend, experience suggests that it could be marking a market top if new lows exceed the number of new highs for an extended period of eight or more consecutive sessions. More likely would be a back-and-forth between the daily highs and lows in a sideways trading pattern as a precedent to the market direction being decided.
The week was the worst for stocks since October, but by no means indicative of anything other than some late-year selling, fears of Fed tapering and the usual yin and yang between buyers and sellers.
More time and data need to be collected before calling for a change in direction, though the measured belief is that it is overdue, at least in the medium term. Strong support was tested and bounced off of at the lows of the day on the Dow, around 15,723.
DOW 15,755.36, +15.93 (+0.10%)
NASDAQ 4,000.98, +2.57 (+0.06%)
S&P 1,775.32, -0.18 (-0.01%)
10-Yr Note 99.02 +0.75 (+0.77%)
NASDAQ Volume 1.49 Bil
NYSE Volume 3.05 Bil
Combined NYSE & NASDAQ Advance - Decline: 3257-2361
Combined NYSE & NASDAQ New highs - New lows: 114-147
WTI crude oil: 96.60, -0.90
Gold: 1,234.60, +9.70
Silver: 19.60, +0.151
Corn: 425.50, -8.75
Friday, December 13, 2013
Thursday, December 12, 2013
Stocks Pounded Lower Again; December a Month of Not-so-Happy Holidays
Declines in equity prices are beginning to get a little bit serious, with the Dow Jones Industrials taking another 100+ point hit on Thursday after retail sales for November came in strong, but were unable to inspire confidence in the consumer sector, and unemployment claims shot up beyond expectations, to 368,000, not the kind of number expected during what is supposed to be the "busy" holiday shopping season.
Since the peak of 16,097.33, reached the day before Thanksgiving (November 27), the Dow is off 357 points, putting in a new interim low today. Still, that's a loss of just over two percent, not anything to get excited over, but the trend since Black Friday has been pronounced, with just two up days in the past 10 sessions.
Worse, new lows have taken a huge edge over new highs as of today, portending further losses should the trend extend.
The selling spilled over into precious metals, with gold and silver reversing gains made yesterday. Selling off of the metals may be a precursor of more asset depreciation, or, it could be just more of the constant discrediting of gold and silver as stores of value. It's a preposterous argument, made manifest by the fact that precious metal prices are derived from paper trading, which has nothing whatsoever to do with the intrinsic value proposition which only physical objects hold.
Overall, it's just getting a little too ugly for speculators with the year-end arriving in just 12 trading days.
DOW 15,739.43, -104.10 (-0.66%)
NASDAQ 3,998.40, -5.41 (-0.14%)
S&P 1,775.50, -6.72 (-0.38%)
10-Yr Note 98.86 -0.15 (-0.15%) Yield: 2.88%
NASDAQ Volume 1.75 Bil
NYSE Volume 3.28 Bil
Combined NYSE & NASDAQ Advance - Decline: 2513-3135
Combined NYSE & NASDAQ New highs - New lows: 66-314
WTI crude oil: 97.50, +0.06
Gold: 1,224.90, -32.30
Silver: 19.45, -0.903
Corn: 434.25, -5.00
Since the peak of 16,097.33, reached the day before Thanksgiving (November 27), the Dow is off 357 points, putting in a new interim low today. Still, that's a loss of just over two percent, not anything to get excited over, but the trend since Black Friday has been pronounced, with just two up days in the past 10 sessions.
Worse, new lows have taken a huge edge over new highs as of today, portending further losses should the trend extend.
The selling spilled over into precious metals, with gold and silver reversing gains made yesterday. Selling off of the metals may be a precursor of more asset depreciation, or, it could be just more of the constant discrediting of gold and silver as stores of value. It's a preposterous argument, made manifest by the fact that precious metal prices are derived from paper trading, which has nothing whatsoever to do with the intrinsic value proposition which only physical objects hold.
Overall, it's just getting a little too ugly for speculators with the year-end arriving in just 12 trading days.
DOW 15,739.43, -104.10 (-0.66%)
NASDAQ 3,998.40, -5.41 (-0.14%)
S&P 1,775.50, -6.72 (-0.38%)
10-Yr Note 98.86 -0.15 (-0.15%) Yield: 2.88%
NASDAQ Volume 1.75 Bil
NYSE Volume 3.28 Bil
Combined NYSE & NASDAQ Advance - Decline: 2513-3135
Combined NYSE & NASDAQ New highs - New lows: 66-314
WTI crude oil: 97.50, +0.06
Gold: 1,224.90, -32.30
Silver: 19.45, -0.903
Corn: 434.25, -5.00
Wednesday, December 11, 2013
Stocks Suffer Heavy Losses in Biggest Two-Day Selloff in Two Months
Not since the uncertainty surrounding the government shutdown in October have stocks suffered through a two-day period such as the one ended Wednesday afternoon.
Stocks were lower at the open and never gained positive ground for the entirety of the session.
Besides the usual fears of Federal Reserve tapering in December (or soon thereafter, as everybody knows it's coming), the latest buzz comes from the far East, where talk of China's overcapacity in an enormous number of industries is fueling speculation of a slowdown in the growth rate of the world's most populous nation.
Another way of expressing overcapacity concerns is slack demand in consumer countries from the USA to the various Eurozone nations and Great Britain. All taken together, a slowdown could be coming at exactly the wrong time for the resident intellectuals at the Fed, who may see their hand forced to curtail - at least to some extent - their bond purchases.
The three-headed monster of slowing industrial growth, slack consumer demand and a pullback of stimulus appears ready to launch an attack on wary equity investors who have been mostly riding a liquidity gravy train for nearly the past five years.
While the two-day selling event may portend even more selling heading through December - usually one of the strongest months for stocks - the fact that the major averages have been down seven of the last nine sessions, belies the false move presented last Friday on November's blowout non-farm jobs data when the Dow was up nearly 200 points. Monday's five-point gain on the Dow was nothing more than a rounding error. Today and yesterday's losses have nearly given all of last Friday's gains back. The Dow is just 22 points above last Thursday's close, setting up this Thursday (tomorrow) as a potential mini-correction if the Dow closes below 15,821.51.
Technical damage has been done recently, both to blue chips and more speculative issues. The NASDAQ suffered the brunt of the selling today, losing nearly 1 1/2 percent on the day. Declining issues outnumbered advancers by more than a four to one margin.
Another concern is volume, which picked up in today's downside trading. Making matters even more bearish were the new lows, which completely subsumed today's new highs, 208-104, a key indicator for direction, and, if it holds, a sure signal for a market correction or outright bear market, something which is probably long overdue.
Happy Holidays? Depends upon which side of the trade you're on.
DOW 15,843.53, -129.60 (-0.81%)
NASDAQ 4,003.81, -56.68, (-1.40%)
S&P 1,782.22, -20.40 (-1.13%)
10-Yr Note 99.46 +0.30 (+0.30%) Yield 2.84%
NASDAQ Volume 1.78 Bil
NYSE Volume 3.46 Bil
Combined NYSE & NASDAQ Advance - Decline: 1096-4603
Combined NYSE & NASDAQ New highs - New lows: 104-208
WTI crude oil: 97.44, -1.07
Gold: 1,257.20, -3.90
Silver: 20.36, +0.041
Corn: 439.25, +3.25
Stocks were lower at the open and never gained positive ground for the entirety of the session.
Besides the usual fears of Federal Reserve tapering in December (or soon thereafter, as everybody knows it's coming), the latest buzz comes from the far East, where talk of China's overcapacity in an enormous number of industries is fueling speculation of a slowdown in the growth rate of the world's most populous nation.
Another way of expressing overcapacity concerns is slack demand in consumer countries from the USA to the various Eurozone nations and Great Britain. All taken together, a slowdown could be coming at exactly the wrong time for the resident intellectuals at the Fed, who may see their hand forced to curtail - at least to some extent - their bond purchases.
The three-headed monster of slowing industrial growth, slack consumer demand and a pullback of stimulus appears ready to launch an attack on wary equity investors who have been mostly riding a liquidity gravy train for nearly the past five years.
While the two-day selling event may portend even more selling heading through December - usually one of the strongest months for stocks - the fact that the major averages have been down seven of the last nine sessions, belies the false move presented last Friday on November's blowout non-farm jobs data when the Dow was up nearly 200 points. Monday's five-point gain on the Dow was nothing more than a rounding error. Today and yesterday's losses have nearly given all of last Friday's gains back. The Dow is just 22 points above last Thursday's close, setting up this Thursday (tomorrow) as a potential mini-correction if the Dow closes below 15,821.51.
Technical damage has been done recently, both to blue chips and more speculative issues. The NASDAQ suffered the brunt of the selling today, losing nearly 1 1/2 percent on the day. Declining issues outnumbered advancers by more than a four to one margin.
Another concern is volume, which picked up in today's downside trading. Making matters even more bearish were the new lows, which completely subsumed today's new highs, 208-104, a key indicator for direction, and, if it holds, a sure signal for a market correction or outright bear market, something which is probably long overdue.
Happy Holidays? Depends upon which side of the trade you're on.
DOW 15,843.53, -129.60 (-0.81%)
NASDAQ 4,003.81, -56.68, (-1.40%)
S&P 1,782.22, -20.40 (-1.13%)
10-Yr Note 99.46 +0.30 (+0.30%) Yield 2.84%
NASDAQ Volume 1.78 Bil
NYSE Volume 3.46 Bil
Combined NYSE & NASDAQ Advance - Decline: 1096-4603
Combined NYSE & NASDAQ New highs - New lows: 104-208
WTI crude oil: 97.44, -1.07
Gold: 1,257.20, -3.90
Silver: 20.36, +0.041
Corn: 439.25, +3.25
Tuesday, December 10, 2013
Another Dismal Day in the Dumps for Stock Owners
Certainly, nobody is going to feel sorry for the Wall Street lemmings, vultures and whales for another losing day on stocks. After all, the major averages are up more than 25% on the year and a good number of individual issues are up much more than that, many having doubled in price over the past 48 weeks.
So, excuse us if we cry crocodile tears for well-heeled investors and speculators.
There is, however, a little bit of a problem in the markets, and it is completely and everlastingly tied to the Federal reserve and their Zero Interest Rate Policy (ZIRP) and continuing quantitative easing (QE), about which there is much debate, constrnation and confusion.
The final meeting of the year for the FOMC is slated for next Tuesday and Wednesday, and, while nobody in their right mind expects this august body to announce any rate policy changes, there is the small matter of decreasing the amount of securities the Fed is buying every month (QE) from the current $85 billion to something less than that, otherwise known as "tapering."
CNBCs Steve Liesman, who has a pipeline directly to and from the Fed, announced today that tapering would be announced at the December meeting. That news, and the final acceptance and future implementation of the Volker Rule, sent stocks backpedaling from the outset. The Volker Rule, in essence, disallows banks from engaging in speculative trading with depositors' money, something the various agencies feel was responsible for at least a part of the financial crisis of the past five years.
The rule puts severe restrictions on what banks can and can't do in terms of proprietary trading (i.e., speculating), but it is dense, long, deep, and riddled with potential loopholes for crafty lawyers and bankers to slither all kinds of nefarious doings through. The Volker Rule document - three years and 585 pages in the making - is, in reality, nothing more than a full-employment bill for litigation attorneys. Bully for them.
QE, and, more specifically, the tapering of QE, is another animal altogether. The Fed has been jawboning about the possibility of scaling back their bond purchases - $45 billion in treasuries and $40 billion in MBS - since May, with varying degrees of success. Wall Street banks, being the main beneficiaries of the program, would like the policy to extend to infinity and beyond, though they know in their dark heart of hearts that it must come to some kind of conclusion. The US economy cannot be force-fed money by the central bank forever.
Besides the program being excessively beneficial to banks and somewhat harmful to small businesses, consumers and emerging market nations, there is another problem that the Fed may never have considered. Due to their monopolizing of the MBS and treasury markets, the available bond issuance is dwindling, so much so, that the Fed may have no choice but to wind down such programs.
The other side of the equation is such that the Fed has so far crowded out potential bidders that there may not be many who actually want to participate. Thus, many in the bond world see even a slight decrease of buying by the Fed as a potential for higher interest rates, including interest on government debt itself, which is already a large portion of the Federal budget but could grow into a behemoth should the federal government have to begin paying back interest at higher and higher rates.
These are the unforeseen, though somewhat predictable, ramifications of the Fed's actions, actions that forestalled an implosion of the financial system and the insolvency of many of the world's largest financial institutions, dating back to the halcyon days of 2008 and $800 billion in TARP money and then-Fed Chairman Hank Paulson holding a gun to the economy's head.
So, Liesman may be bluffing at the behest of the Fed, or he could have just issued the warning shot to the markets that the plundering of assets with free money is about to come to an end.
The signs that the policy has run its course are profligate: record art and collectible car auctions, record high-end real estate prices, record stock prices.
Enough is enough. The party is about to come to a crashing, cataclysmic conclusion, and as cataclysms usually are, this one is not likely to be pretty.
Technically speaking, the advance-decline line deteriorated again today, the gap between new highs and new lows continues to show signs of shrinking and potentially flipping, and outside of Friday's massive vapor-rise, stocks have fallen every day since Thanksgiving.
The good news (for some) is that commodity prices took a lift today, with silver and gold leading the way.
DOW 15,973.13, -52.40 (-0.33%)
NASDAQ 4,060.49, -8.26 (-0.20%)
S&P 1,802.62, -5.75, (-0.32%)
10-Yr Note 99.43, +0.37 (+0.37%), Yield: 2.80%
NASDAQ Volume 1.71 Bil
NYSE Volume 3.07 Bil
Combined NYSE & NASDAQ Advance - Decline: 2115-3553
Combined NYSE & NASDAQ New highs - New lows: 206-113
WTI crude oil: 98.51, +1.17
Gold: 1,261.10, +26.90
Silver: 20.32, +0.614
Corn: 436.00, -2.00
So, excuse us if we cry crocodile tears for well-heeled investors and speculators.
There is, however, a little bit of a problem in the markets, and it is completely and everlastingly tied to the Federal reserve and their Zero Interest Rate Policy (ZIRP) and continuing quantitative easing (QE), about which there is much debate, constrnation and confusion.
The final meeting of the year for the FOMC is slated for next Tuesday and Wednesday, and, while nobody in their right mind expects this august body to announce any rate policy changes, there is the small matter of decreasing the amount of securities the Fed is buying every month (QE) from the current $85 billion to something less than that, otherwise known as "tapering."
CNBCs Steve Liesman, who has a pipeline directly to and from the Fed, announced today that tapering would be announced at the December meeting. That news, and the final acceptance and future implementation of the Volker Rule, sent stocks backpedaling from the outset. The Volker Rule, in essence, disallows banks from engaging in speculative trading with depositors' money, something the various agencies feel was responsible for at least a part of the financial crisis of the past five years.
The rule puts severe restrictions on what banks can and can't do in terms of proprietary trading (i.e., speculating), but it is dense, long, deep, and riddled with potential loopholes for crafty lawyers and bankers to slither all kinds of nefarious doings through. The Volker Rule document - three years and 585 pages in the making - is, in reality, nothing more than a full-employment bill for litigation attorneys. Bully for them.
QE, and, more specifically, the tapering of QE, is another animal altogether. The Fed has been jawboning about the possibility of scaling back their bond purchases - $45 billion in treasuries and $40 billion in MBS - since May, with varying degrees of success. Wall Street banks, being the main beneficiaries of the program, would like the policy to extend to infinity and beyond, though they know in their dark heart of hearts that it must come to some kind of conclusion. The US economy cannot be force-fed money by the central bank forever.
Besides the program being excessively beneficial to banks and somewhat harmful to small businesses, consumers and emerging market nations, there is another problem that the Fed may never have considered. Due to their monopolizing of the MBS and treasury markets, the available bond issuance is dwindling, so much so, that the Fed may have no choice but to wind down such programs.
The other side of the equation is such that the Fed has so far crowded out potential bidders that there may not be many who actually want to participate. Thus, many in the bond world see even a slight decrease of buying by the Fed as a potential for higher interest rates, including interest on government debt itself, which is already a large portion of the Federal budget but could grow into a behemoth should the federal government have to begin paying back interest at higher and higher rates.
These are the unforeseen, though somewhat predictable, ramifications of the Fed's actions, actions that forestalled an implosion of the financial system and the insolvency of many of the world's largest financial institutions, dating back to the halcyon days of 2008 and $800 billion in TARP money and then-Fed Chairman Hank Paulson holding a gun to the economy's head.
So, Liesman may be bluffing at the behest of the Fed, or he could have just issued the warning shot to the markets that the plundering of assets with free money is about to come to an end.
The signs that the policy has run its course are profligate: record art and collectible car auctions, record high-end real estate prices, record stock prices.
Enough is enough. The party is about to come to a crashing, cataclysmic conclusion, and as cataclysms usually are, this one is not likely to be pretty.
Technically speaking, the advance-decline line deteriorated again today, the gap between new highs and new lows continues to show signs of shrinking and potentially flipping, and outside of Friday's massive vapor-rise, stocks have fallen every day since Thanksgiving.
The good news (for some) is that commodity prices took a lift today, with silver and gold leading the way.
DOW 15,973.13, -52.40 (-0.33%)
NASDAQ 4,060.49, -8.26 (-0.20%)
S&P 1,802.62, -5.75, (-0.32%)
10-Yr Note 99.43, +0.37 (+0.37%), Yield: 2.80%
NASDAQ Volume 1.71 Bil
NYSE Volume 3.07 Bil
Combined NYSE & NASDAQ Advance - Decline: 2115-3553
Combined NYSE & NASDAQ New highs - New lows: 206-113
WTI crude oil: 98.51, +1.17
Gold: 1,261.10, +26.90
Silver: 20.32, +0.614
Corn: 436.00, -2.00
Monday, December 9, 2013
No Follow-Through After Big Jobs Report Gains
We've seen this show before, and, it bears witness to the steady downtrend last week that was punctuated by a huge move to the upside on Friday. The non-momentum Monday is the hangover effect of a stock move that was entirely day-trading driven, run on fumes and now run out of gas.
It shows no commitment among traders to actually invest; rather, it solidifies the argument that Wall Street stocks are nothing but casino chips, their valuations unrealistic and devoid of fundamental value, or, at least, fundamentals that would support such stocks at lower prices.
Thanks to Uncle Ben at the Fed we have a completely distorted market that is fueled by creap money and speculation. It was nice knowing Mr. Bernanke, who could step down as early as this week if the Senate confirms Janet Yellen, though she, as replacement, seems even more out-of-touch and reluctant to do anything other than continue printing.
Stocks will keep going up, until they don't, which could be any day now, considering the predictably ugly numbers retailers are set to report this week and throughout the holiday season.
Basically, if one spent today watching the tape, one would have likely fallen asleep.
DOW 16,025.53, +5.33 (+0.03%)
NASDAQ 4,068.75, +6.23 (+0.15%)
S&P 1,808.37 +3.28 (+0.18%)
10-Yr Note 99.20 +0.18 (+0.18%)
NASDAQ Volume 1.54 Bil
NYSE Volume 3.09 Bil
Combined NYSE & NASDAQ Advance - Decline: 2599-3043
Combined NYSE & NASDAQ New highs - New lows: 305-96
WTI crude oil: 97.34, -0.31
Gold: 1,234.20, +5.20
Silver: 19.70, +0.178
Corn: 438.00, +3.75
It shows no commitment among traders to actually invest; rather, it solidifies the argument that Wall Street stocks are nothing but casino chips, their valuations unrealistic and devoid of fundamental value, or, at least, fundamentals that would support such stocks at lower prices.
Thanks to Uncle Ben at the Fed we have a completely distorted market that is fueled by creap money and speculation. It was nice knowing Mr. Bernanke, who could step down as early as this week if the Senate confirms Janet Yellen, though she, as replacement, seems even more out-of-touch and reluctant to do anything other than continue printing.
Stocks will keep going up, until they don't, which could be any day now, considering the predictably ugly numbers retailers are set to report this week and throughout the holiday season.
Basically, if one spent today watching the tape, one would have likely fallen asleep.
DOW 16,025.53, +5.33 (+0.03%)
NASDAQ 4,068.75, +6.23 (+0.15%)
S&P 1,808.37 +3.28 (+0.18%)
10-Yr Note 99.20 +0.18 (+0.18%)
NASDAQ Volume 1.54 Bil
NYSE Volume 3.09 Bil
Combined NYSE & NASDAQ Advance - Decline: 2599-3043
Combined NYSE & NASDAQ New highs - New lows: 305-96
WTI crude oil: 97.34, -0.31
Gold: 1,234.20, +5.20
Silver: 19.70, +0.178
Corn: 438.00, +3.75
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