Over the past three sessions, the Dow Jones Industrial Average has gained 13 points. It's hardly worth watching, much the less actually investing in anything. Now that the economy is officially flat-lining, market moves are going to actually require some kind of impetus and the Obama administration, the Fed and the Treasury have made sure that everything is buttoned-down, nice and neat. Further, the big money has pushed stocks to a level at which there are no bargains.
Therefore, welcome to the summer of '09. Blah. Boring. Stupid.
Dow 8,763.06, -1.43 (0.02%)
NASDAQ 1,860.13, +17.73 (0.96%)
S&P 500 942.43, +3.29 (0.35%)
NYSE Composite 6,101.57, +33.01 (0.54%)
Winners beat losers, 3905-2464. New highs finished slightly better than new lows for the 4th straight session, 73-63. Volume was well below average. No surprise there. Did somebody mention that stocks weren't cheap?
NYSE Volume 1,060,306,000
NASDAQ Volume 2,161,562,000
As though there were some compelling reason, like outsized demand, oil gained another $1.92, to $70.01. This is the result of still-unregulated speculation in the commodity markets. There's no good reason by crude oil should be more than $35 per barrel, much less $50, or $60. If there's anything that will put a lid on the economy and bury it for good, it's high energy prices. Good for those greedy bastard oil companies. Bad for everyone else.
Gold gained $2.20, to $954.70. Silver was up 19 cents, to $15.14.
It was a really dull day.
I need a nap.
Tuesday, June 9, 2009
Monday, June 8, 2009
A Market You Cannot Take Seriously
Foreign investors must look at the US stock markets as a major joke. Of course, theirs may or may not be any better, but the abnormal late-day trading patterns in US equity indices really should be held up for ridicule and scorn.
Today was just another in a series of predetermined outcomes. Stocks were down all day, until 3:15 pm, with the Dow index down as much as 130 points during the session. Naturally, the crooks and thieves controlling the trading have to keep up appearances - that America is still OK - so all of the losses were erased in the final 45 minutes.
That's become standard operating procedure on the Street. Whether or not anyone actually believes stocks should be levitating around their recent highs is another matter altogether. For most chartists and analysts, the evidence of manipulation is pretty clear, and has been for some time. Valuation means little anymore. It's all perception and innuendo, with the hope that people will forget that stocks are up some 35-40% since early March, haven't taken even a slight correction and may move even higher.
The feeling is that the insiders wish that everyone would just close their eyes for the next few weeks and wait for the inevitable push higher, which will, no doubt, be accompanied by some cockamamie economic report that purports to show the US economy on the mend. Should stocks take another step forward, one would be well advised to take profits, invest in oil, gold or silver and move out of stocks completely, because some day, sooner or later, there will be a hellish crash, something akin to the pounding stocks took last fall.
In the current case, it sure looks like the heavy hitters are firmly in control, taking profits as they please, bolstering their bottom lines with blatant disregard for retail investors, client money or anything even remotely resembling morals.
Dow 8,764.49, +1.36 (0.02%)
NASDAQ 1,842.40, -7.02 (0.38%)
S&P 500 939.14, -0.95 (0.10%)
NYSE Composite 6,068.56, -14.08 (0.23%)
Despite the narrowly mixed results in the headline numbers, decliners finished far ahead of advancing issues, 4013-2391. New highs finished just ahead of new lows, 59-58, but most telling was the light volume, far below even the reduced levels of the previous two weeks. The word best descriptive of this session's volume would be "feeble," though "feckless" also comes to mind.
NYSE Volume 1,077,228,000
NASDAQ Volume 1,993,720,000
Commodity prices were down nearly across the board, though the favored position of oil and energy-related raw materials was evident. Crude fell by a mere 35 cents, to $68.09, as though $68.00 is the magical fixed price for the slippery stuff. The metals took a more serious hit, with gold down $10.10, to $952.50, and silver off 43 cents, to $14.96.
Meanwhile, the crafty Chrysler bankruptcy, engineered by Washington bureaucrats, may be falling apart, as the Supreme Court issued a stay while justices mull over the appeal of a group of Indiana pension and construction funds who say their secured interests were unduly ignored in the original filing. Justice Ruth Bader Ginsburg issued the terse notice today, putting the entire matter on hold until Monday.
The American public is about to learn just who holds power in Washington. If the deal isn't done by Monday, June 15, Fiat, the purchaser of most of Chrysler's assets, has the right to walk away. Meanwhile, the court must take seriously the claims by the pension funds, which stand in stark opposition to the plan laid out by the Obama administration.
With the stock market and federal government appearing to be more "theatre of the absurd" than substantial operating mechanisms of capitalism and democracy, the recovery picture becomes more fuzzy and less believable every day. It should, because in more than just general terms, but specifically in instances ranging from the TARP "loans", to the bank stress tests to the pre-packaged bankruptcies of GM and Chrysler, the process has been deceptive, shady and unfair to the parties being harmed the most: the US taxpayers.
Today was just another in a series of predetermined outcomes. Stocks were down all day, until 3:15 pm, with the Dow index down as much as 130 points during the session. Naturally, the crooks and thieves controlling the trading have to keep up appearances - that America is still OK - so all of the losses were erased in the final 45 minutes.
That's become standard operating procedure on the Street. Whether or not anyone actually believes stocks should be levitating around their recent highs is another matter altogether. For most chartists and analysts, the evidence of manipulation is pretty clear, and has been for some time. Valuation means little anymore. It's all perception and innuendo, with the hope that people will forget that stocks are up some 35-40% since early March, haven't taken even a slight correction and may move even higher.
The feeling is that the insiders wish that everyone would just close their eyes for the next few weeks and wait for the inevitable push higher, which will, no doubt, be accompanied by some cockamamie economic report that purports to show the US economy on the mend. Should stocks take another step forward, one would be well advised to take profits, invest in oil, gold or silver and move out of stocks completely, because some day, sooner or later, there will be a hellish crash, something akin to the pounding stocks took last fall.
In the current case, it sure looks like the heavy hitters are firmly in control, taking profits as they please, bolstering their bottom lines with blatant disregard for retail investors, client money or anything even remotely resembling morals.
Dow 8,764.49, +1.36 (0.02%)
NASDAQ 1,842.40, -7.02 (0.38%)
S&P 500 939.14, -0.95 (0.10%)
NYSE Composite 6,068.56, -14.08 (0.23%)
Despite the narrowly mixed results in the headline numbers, decliners finished far ahead of advancing issues, 4013-2391. New highs finished just ahead of new lows, 59-58, but most telling was the light volume, far below even the reduced levels of the previous two weeks. The word best descriptive of this session's volume would be "feeble," though "feckless" also comes to mind.
NYSE Volume 1,077,228,000
NASDAQ Volume 1,993,720,000
Commodity prices were down nearly across the board, though the favored position of oil and energy-related raw materials was evident. Crude fell by a mere 35 cents, to $68.09, as though $68.00 is the magical fixed price for the slippery stuff. The metals took a more serious hit, with gold down $10.10, to $952.50, and silver off 43 cents, to $14.96.
Meanwhile, the crafty Chrysler bankruptcy, engineered by Washington bureaucrats, may be falling apart, as the Supreme Court issued a stay while justices mull over the appeal of a group of Indiana pension and construction funds who say their secured interests were unduly ignored in the original filing. Justice Ruth Bader Ginsburg issued the terse notice today, putting the entire matter on hold until Monday.
The American public is about to learn just who holds power in Washington. If the deal isn't done by Monday, June 15, Fiat, the purchaser of most of Chrysler's assets, has the right to walk away. Meanwhile, the court must take seriously the claims by the pension funds, which stand in stark opposition to the plan laid out by the Obama administration.
With the stock market and federal government appearing to be more "theatre of the absurd" than substantial operating mechanisms of capitalism and democracy, the recovery picture becomes more fuzzy and less believable every day. It should, because in more than just general terms, but specifically in instances ranging from the TARP "loans", to the bank stress tests to the pre-packaged bankruptcies of GM and Chrysler, the process has been deceptive, shady and unfair to the parties being harmed the most: the US taxpayers.
Friday, June 5, 2009
Jobs Data Improving, But Stocks Fail to Gain
At the release of May's non-farm payroll data from the Labor Department, stock futures rose dramatically, as the government said 345,000 job losses occurred in May. Most analysts were looking for a loss of about 520,000, so the improvement was substantial and the futures trade spilled over into the open, with stocks sharply higher in the opening minutes.
Just about 10 minutes into the session, though, something odd happened. Stocks lost their momentum and before 10:00 am, all of the indices were trading in the red. For the remainder of the session, the various indices either stayed marginally positive (the Dow), hugged the flat line (NASDAQ and S&P) or remained in the red (NYSE Comp.).
By 2:00 pm, the bloom was off the rose, and the expected rally on "real" good economic news, instead of the media-spun variety, never materialized. Stocks generally slumped when they should have been soaring.
The mainstream and financial media will attempt to put some kind of cover story on how the numbers were "already discounted" or some other rubbish, but let's allow for some degree of inside baseball (manipulation) as the true explanation. If one examines the timeline between the March 9 bottom and today, it's fairly evident what has occurred. The banks, through their brokerage arms, which received government money through TARP and other lending facilities - B of A, Citi, Goldman, JP Morgan, et. al. - pumped the markets back to life, and, not satisfied with a reasonable rebound of 15-20%, extended gains to the 35-39% range, all of this based on media innuendo, fudged accounting and hopes pinned on stress test results.
Now, when there is actual positive news on unemployment, the banksters find themselves in a topped out position. Further gains would seem frothy, despite the good news, so they are nakedly doing what every chiseling, cheating, Ponzi player would: they are dumping stocks at inflated prices back to the rabble. The whole process has been very untidy and wholly opaque. Fewer words of truth have ever been spoken around Wall Street than during the past three months. Big money is bailing, taking profits and heading to the sidelines and the Hamptons while the rest of the market hammers out the details over the summer.
Investors had best pay close attention next week and especially the trading week of June 15-19, when June options expire. There are likely large put positions already staked out by the large money players. The markets remain remarkably overbought and poised for a move in one direction or the other. With 2nd quarter earnings season still more than a month off, the chances are good that some external event will precipitate a trundle to the downside.
Dow 8,763.13, +12.89 (0.15%)
NASDAQ 1,849.42, -0.60 (0.03%)
S&P 500 940.09, -2.37 (0.25%)
NYSE Composite 6,082.64, -28.12 (0.46%)
In deference to the flat headline numbers, declining issues far outpaced advancers, 3408-2908. New lows vs. new highs remains at a crossroads, with the new highs a narrow winner, 91-87. Volume was pathetic, so, once again, it's influence as an indicator is marginal.
NYSE Volume 1,261,973,000
NASDAQ Volume 2,333,721,000
Commodities spent the majority of the day in the red. Oil backed off 37 cents, to $68.44, though gold saw a much larger decline, down $19.70, to $962.60, backing far away from the magic $1000 level. Silver tracked along the same path, losing 51 cents, to $15.39 the ounce. Its difficult to get a handle on commodity trading with so much speculation going on, but there are small indications that the general deflationary environment is keeping a lid on prices, for now. How that plays out a year or two down the road is also very uncertain.
Stocks still showed another positive week, despite the sleepy results of Friday. Next week may very well show more liquidation in equity positions and consolidation, otherwise known as profit-taking. It bears watching,
Just about 10 minutes into the session, though, something odd happened. Stocks lost their momentum and before 10:00 am, all of the indices were trading in the red. For the remainder of the session, the various indices either stayed marginally positive (the Dow), hugged the flat line (NASDAQ and S&P) or remained in the red (NYSE Comp.).
By 2:00 pm, the bloom was off the rose, and the expected rally on "real" good economic news, instead of the media-spun variety, never materialized. Stocks generally slumped when they should have been soaring.
The mainstream and financial media will attempt to put some kind of cover story on how the numbers were "already discounted" or some other rubbish, but let's allow for some degree of inside baseball (manipulation) as the true explanation. If one examines the timeline between the March 9 bottom and today, it's fairly evident what has occurred. The banks, through their brokerage arms, which received government money through TARP and other lending facilities - B of A, Citi, Goldman, JP Morgan, et. al. - pumped the markets back to life, and, not satisfied with a reasonable rebound of 15-20%, extended gains to the 35-39% range, all of this based on media innuendo, fudged accounting and hopes pinned on stress test results.
Now, when there is actual positive news on unemployment, the banksters find themselves in a topped out position. Further gains would seem frothy, despite the good news, so they are nakedly doing what every chiseling, cheating, Ponzi player would: they are dumping stocks at inflated prices back to the rabble. The whole process has been very untidy and wholly opaque. Fewer words of truth have ever been spoken around Wall Street than during the past three months. Big money is bailing, taking profits and heading to the sidelines and the Hamptons while the rest of the market hammers out the details over the summer.
Investors had best pay close attention next week and especially the trading week of June 15-19, when June options expire. There are likely large put positions already staked out by the large money players. The markets remain remarkably overbought and poised for a move in one direction or the other. With 2nd quarter earnings season still more than a month off, the chances are good that some external event will precipitate a trundle to the downside.
Dow 8,763.13, +12.89 (0.15%)
NASDAQ 1,849.42, -0.60 (0.03%)
S&P 500 940.09, -2.37 (0.25%)
NYSE Composite 6,082.64, -28.12 (0.46%)
In deference to the flat headline numbers, declining issues far outpaced advancers, 3408-2908. New lows vs. new highs remains at a crossroads, with the new highs a narrow winner, 91-87. Volume was pathetic, so, once again, it's influence as an indicator is marginal.
NYSE Volume 1,261,973,000
NASDAQ Volume 2,333,721,000
Commodities spent the majority of the day in the red. Oil backed off 37 cents, to $68.44, though gold saw a much larger decline, down $19.70, to $962.60, backing far away from the magic $1000 level. Silver tracked along the same path, losing 51 cents, to $15.39 the ounce. Its difficult to get a handle on commodity trading with so much speculation going on, but there are small indications that the general deflationary environment is keeping a lid on prices, for now. How that plays out a year or two down the road is also very uncertain.
Stocks still showed another positive week, despite the sleepy results of Friday. Next week may very well show more liquidation in equity positions and consolidation, otherwise known as profit-taking. It bears watching,
Thursday, June 4, 2009
Stocks Up, Outlook Still Cloudy; Retail Sales Horrible
Investors took little time this morning putting stocks back on a positive path, after initial jobless claims came in lower for the 4th consecutive week. Gains were broad-based, though marginal in most cases, with all indices trading in very narrow ranges. The Dow, for instance, traversed just 116 points from the morning low to the afternoon high, finishing close to the top and near recent highs.
Without much to move the markets, stocks were fairly settled as investors seem to be on hold for now, at least awaiting word from the Labor Dept. on May job losses, released tomorrow at 8:30 am EDT. That number should not be much of a surprise, as there's little to indicate that job losses are going to narrow appreciably. The consensus estimate is for about 525,000 more jobs being shed from the pool in the prior month.
Financials led the way again, with Bank of America and Citigroup both gaining more than 5% by the close, providing a significant boost to the Dow Jones Industrials. General Motors was officially removed at the end of the day, as it will now trade over the counter, under the symbol, GMGMQ.PK. Citigroup will also exit as of Monday. The two Dow components will be replaced by Cisco Systems (CSCO) and Travelers Insurance (TRV).
Apparently of less importance to investors were the ugly retail sales figures released by a number of America's largest chain stores. Same-store sales for a group of 30 retailers fell 4.8% from a year ago. The numbers for some of the nation's best-known stores were horrific, reflecting the reality of a declining economy in a deflationary environment. Limited Brands fell 7%; Gap, down 6%; Abercrombie and Fitch collapsed 28%; Dillard's was down 12%; Macy's fell 9.1%; Nordstrom's sales were of 13.1%; Sak's was down 26.6%. even discounters Target and Costco were off by 6.1% and 7%, respectively.
The retail figures underscore the disconnect between Washington, Wall Street and Main Street. While the pols in D.C. and the monied financiers in New York continue to preach that the economy is recovering, real life experience is posting a different message altogether. The condition is becoming particularly acute, and can be seen in the strain for stocks to gain further momentum. Add to the retail woes the coming closure of nearly 4000 auto dealerships by Chrysler and GM and the condition can only deteriorate over the near term.
Dow 8,750.24, +74.96 (0.86%)
NASDAQ 1,850.02, +24.10 (1.32%)
S&P 500 942.46, +10.70 (1.15%)
NYSE Composite 6,110.76, +76.86 (1.27%)
Advancing issues finished well ahead of decliners, 4769-1643, a rather large bias considering the paucity of gains. New highs barely beat new lows, 66-65, so the indicator remains poised to signal either a renewal of the rally or the beginning of a precipitous decline. Volume was a touch higher than Wednesday's, though still not remarkable and thus, not signaling anything.
NYSE Volume 1,358,776,000
NASDAQ Volume 2,488,895,000
Commodities completely reversed yesterday's performance, with nearly everything gaining in value. Oil rose $2.69, to $68.81. Gold was higher by $16.70, to $982.30, with silver up 59 cents to $15.90.
Tomorrow's non-farm payroll report could be significant, no matter which way the numbers are interpreted, though it's becoming increasingly clear that stocks cannot go much higher without support from the real world. Investors are either living in a dream world or seeing a different new reality, obscure to most Americans.
In the best news of the day, former Countrywide CEO, Angelo Mozillo and two other top executives were formally charged with fraud and insider trading by the SEC. It is a civil lawsuit, but may pave the way for the Justice Department to file criminal charges. Mozilo is the first and only executive to be charged with any crimes stemming from the subprime and general banking crisis.
Without much to move the markets, stocks were fairly settled as investors seem to be on hold for now, at least awaiting word from the Labor Dept. on May job losses, released tomorrow at 8:30 am EDT. That number should not be much of a surprise, as there's little to indicate that job losses are going to narrow appreciably. The consensus estimate is for about 525,000 more jobs being shed from the pool in the prior month.
Financials led the way again, with Bank of America and Citigroup both gaining more than 5% by the close, providing a significant boost to the Dow Jones Industrials. General Motors was officially removed at the end of the day, as it will now trade over the counter, under the symbol, GMGMQ.PK. Citigroup will also exit as of Monday. The two Dow components will be replaced by Cisco Systems (CSCO) and Travelers Insurance (TRV).
Apparently of less importance to investors were the ugly retail sales figures released by a number of America's largest chain stores. Same-store sales for a group of 30 retailers fell 4.8% from a year ago. The numbers for some of the nation's best-known stores were horrific, reflecting the reality of a declining economy in a deflationary environment. Limited Brands fell 7%; Gap, down 6%; Abercrombie and Fitch collapsed 28%; Dillard's was down 12%; Macy's fell 9.1%; Nordstrom's sales were of 13.1%; Sak's was down 26.6%. even discounters Target and Costco were off by 6.1% and 7%, respectively.
The retail figures underscore the disconnect between Washington, Wall Street and Main Street. While the pols in D.C. and the monied financiers in New York continue to preach that the economy is recovering, real life experience is posting a different message altogether. The condition is becoming particularly acute, and can be seen in the strain for stocks to gain further momentum. Add to the retail woes the coming closure of nearly 4000 auto dealerships by Chrysler and GM and the condition can only deteriorate over the near term.
Dow 8,750.24, +74.96 (0.86%)
NASDAQ 1,850.02, +24.10 (1.32%)
S&P 500 942.46, +10.70 (1.15%)
NYSE Composite 6,110.76, +76.86 (1.27%)
Advancing issues finished well ahead of decliners, 4769-1643, a rather large bias considering the paucity of gains. New highs barely beat new lows, 66-65, so the indicator remains poised to signal either a renewal of the rally or the beginning of a precipitous decline. Volume was a touch higher than Wednesday's, though still not remarkable and thus, not signaling anything.
NYSE Volume 1,358,776,000
NASDAQ Volume 2,488,895,000
Commodities completely reversed yesterday's performance, with nearly everything gaining in value. Oil rose $2.69, to $68.81. Gold was higher by $16.70, to $982.30, with silver up 59 cents to $15.90.
Tomorrow's non-farm payroll report could be significant, no matter which way the numbers are interpreted, though it's becoming increasingly clear that stocks cannot go much higher without support from the real world. Investors are either living in a dream world or seeing a different new reality, obscure to most Americans.
In the best news of the day, former Countrywide CEO, Angelo Mozillo and two other top executives were formally charged with fraud and insider trading by the SEC. It is a civil lawsuit, but may pave the way for the Justice Department to file criminal charges. Mozilo is the first and only executive to be charged with any crimes stemming from the subprime and general banking crisis.
Wednesday, June 3, 2009
Critical Turn for US Markets
Today marked a potentially critical turn for US equity markets, from a strict interpretation of a key indicator, that being the new highs - new lows measure.
On Monday and Tuesday, new highs surpassed new lows on the daily tally for the first time in six months. New lows have held the edge every day since September of 2007, save for five or six occasions. On those occasions in which new highs surpassed new lows during this period, once new lows took back the lead, stocks fell for a time until the new lows were 25-100 times the number of new highs, at which point a bottom was reached in the market.
Today, there were 50 new lows to 48 new highs, a technical win for the lows, indicating that a market turn is at hand. This is the strongest selling indicator that has been seen in the past three months. While it's obvious that stocks are severely overbought and have been for weeks, this sole indicator is all that's needed to predict the immediate future for stocks. They are ready to roll over and die. The extend of the carnage cannot be known, but within the next 3-6 trading days, there will be dramatic movement to the downside.
Market action today was somewhat hidden, though the real damage was done on the NYSE Composite, the largest index, and the one least prone to manipulation. While losses on the three majors were limited, the Composite was down 2.41%, nearly twice that of the S&P, three times the decline of the Dow and triple the NASDAQ on a percentage basis.
Dow 8,675.24, -65.63 (0.75%)
NASDAQ 1,825.92, -10.88 (0.59%)
S&P 500 931.76, -12.98 (1.37%)
NYSE Composite 6,033.90, -148.97 (2.41)
Declining issues far outpaced advancing ones, 4346-2059. That is a significant number, much moreso than the feeble tape-painting attempt on the Dow, which had been down as much as 140 points at 3:30 pm. Of course, the manipulators in the market made sure to limit the damage with a 75-point rally in the final half hour. It should be disregarded, as should every index, as they are absurdly valued at present. Consider that the Dow is still more than 2000 points higher than it was less than three months ago. The game is nearly up. Savvy investors will be locking in profits very soon as waves of selling are set to hit the market. Volume was on the low side, but still meaningless. The warmer weather and shakiness of the markets have removed many participants.
NYSE Volume 1,323,971,000
NASDAQ Volume 2,320,685,000
Commodities may have telegraphed the next move in stocks. After weeks of rallying, nearly all commodities sold off on the day, indicating that speculators are scurrying for safer havens in bonds and money markets. The catalyst may have been the ADP Employment Change report, which showed a loss of 532,000 private sector jobs lost in May, and also revised April from a loss of 491,000 to a 545,000 job loss. With the official Labor Department Non-Farms Payroll report for May due out prior to the market open on Friday, there is every possibility that the report will show further deterioration in the US employment market, not "incremental improvement" as the media and government officials have been touting.
Oil dropped $2.43, to settle at $66.12. Gold dipped $18.80, falling to $965.60. Even silver, the strongest commodity over the past three weeks, fell 65 cents, to $15.31 per ounce. Almost every commodity, from energy-related to foodstuffs, fell hard on the day. The grip of deflation is unmistakable.
There's another tsunami dead ahead. Government efforts to revive the economy have been minimal at best, and potentially harmful, at worst. Investors are nervous and big money is heading for the hills. Despite the positive spin which the government and media have tried to put on the economic picture, the reality is that the US economy is not gong to recover any time soon.
Look for sideways-down movement over the coming weeks, peppered with a couple of major downside days, with the Dow registering 200-400 point losses. Once the selling begins, it will not be easily stopped. The banks and their TARP money are pulling out - they have to - before they are stuck with losing positions. Before that happens they will unload on retail investors.
Happy days? Not for bulls.
On Monday and Tuesday, new highs surpassed new lows on the daily tally for the first time in six months. New lows have held the edge every day since September of 2007, save for five or six occasions. On those occasions in which new highs surpassed new lows during this period, once new lows took back the lead, stocks fell for a time until the new lows were 25-100 times the number of new highs, at which point a bottom was reached in the market.
Today, there were 50 new lows to 48 new highs, a technical win for the lows, indicating that a market turn is at hand. This is the strongest selling indicator that has been seen in the past three months. While it's obvious that stocks are severely overbought and have been for weeks, this sole indicator is all that's needed to predict the immediate future for stocks. They are ready to roll over and die. The extend of the carnage cannot be known, but within the next 3-6 trading days, there will be dramatic movement to the downside.
Market action today was somewhat hidden, though the real damage was done on the NYSE Composite, the largest index, and the one least prone to manipulation. While losses on the three majors were limited, the Composite was down 2.41%, nearly twice that of the S&P, three times the decline of the Dow and triple the NASDAQ on a percentage basis.
Dow 8,675.24, -65.63 (0.75%)
NASDAQ 1,825.92, -10.88 (0.59%)
S&P 500 931.76, -12.98 (1.37%)
NYSE Composite 6,033.90, -148.97 (2.41)
Declining issues far outpaced advancing ones, 4346-2059. That is a significant number, much moreso than the feeble tape-painting attempt on the Dow, which had been down as much as 140 points at 3:30 pm. Of course, the manipulators in the market made sure to limit the damage with a 75-point rally in the final half hour. It should be disregarded, as should every index, as they are absurdly valued at present. Consider that the Dow is still more than 2000 points higher than it was less than three months ago. The game is nearly up. Savvy investors will be locking in profits very soon as waves of selling are set to hit the market. Volume was on the low side, but still meaningless. The warmer weather and shakiness of the markets have removed many participants.
NYSE Volume 1,323,971,000
NASDAQ Volume 2,320,685,000
Commodities may have telegraphed the next move in stocks. After weeks of rallying, nearly all commodities sold off on the day, indicating that speculators are scurrying for safer havens in bonds and money markets. The catalyst may have been the ADP Employment Change report, which showed a loss of 532,000 private sector jobs lost in May, and also revised April from a loss of 491,000 to a 545,000 job loss. With the official Labor Department Non-Farms Payroll report for May due out prior to the market open on Friday, there is every possibility that the report will show further deterioration in the US employment market, not "incremental improvement" as the media and government officials have been touting.
Oil dropped $2.43, to settle at $66.12. Gold dipped $18.80, falling to $965.60. Even silver, the strongest commodity over the past three weeks, fell 65 cents, to $15.31 per ounce. Almost every commodity, from energy-related to foodstuffs, fell hard on the day. The grip of deflation is unmistakable.
There's another tsunami dead ahead. Government efforts to revive the economy have been minimal at best, and potentially harmful, at worst. Investors are nervous and big money is heading for the hills. Despite the positive spin which the government and media have tried to put on the economic picture, the reality is that the US economy is not gong to recover any time soon.
Look for sideways-down movement over the coming weeks, peppered with a couple of major downside days, with the Dow registering 200-400 point losses. Once the selling begins, it will not be easily stopped. The banks and their TARP money are pulling out - they have to - before they are stuck with losing positions. Before that happens they will unload on retail investors.
Happy days? Not for bulls.
Subscribe to:
Posts (Atom)
Posts
