Another day, another decline on US stock markets.
One should not be at all surprised by the development that stocks have found the path of least resistance to be lower. After all, they were goosed the past two years by almost $2 tillion in Federal Reserve subsidies and slippery dealings by the major banks.
Once again, stocks started out near their highs of the day, and, through a choppy session, ended in a massive sell-off into the close. The NASDAQ took the brunt of the beating, never making it out of negative territory the entire day. Again, this is unsurprising, as most of the momentum stocks which drove the two-year rally are indexed on the NASDAQ.
The bigger picture involves risk of all sorts, much of which is unquantifiable, such as the level of interest in, or general terms of, the bailout of Greece and whether or not the congressional clowns can come to some agreement on lifting the debt ceiling or not. Absent reliable information on either of those issues, and adding to the fact that there's scant economic data upon which to trade, stocks took another leg down in what is fast becoming a summer of discontent.
Perhaps the government agents and Wall Street wizards should be just happy to take their lumps in money, lest the American public come after them hammer and tong. They have destroyed not only the general economy of the nation, but have misused the public trust to a point at which there no longer is any.
The path to Dow 10,000 or S&P 1000 is likely going to be paved with the corpses of the major banks, still insolvent in many regards, especially Bank of America (BAC), which hit another tw-year low today, losing 0.11 to 10.54. Wells-Fargo (WFC), JP Morgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) all took on water, though these stocks and the averages were all aided by a futile, though furious, late rally in the final fifteen minutes of trading.
Dow 12,048.48, -21.87 (0.18%)
NASDAQ 2,675.38, -26.18 (0.97%)
S&P 500 1,279.56, -5.38 (0.42%)
NYSE Composite 8,081.33, -50.34 (0.62%)
Despite the seemingly paltry losses, internals were crushed once again, and therein lies the problem with the markets. Almost everything is still overvalued and the reversal, by fear, extends to all equities. Declining issues hammered advancers, 4824-1767. On the NASDAQ, there were 22 new highs and 140 new lows, Over on the Big Board, 23 new highs, and 97 new lows, putting our totals at 45 new highs and 237 new lows, the fifth straight win for the lows, an expanding margin of difference and a sure sign the correction has further leg-stretching to do.
Volume perked up a bit from the previous two sessions, another indication that the selling pressure is intense and not about to abate.
NASDAQ Volume 2,038,875,125
NYSE Volume 4,442,987,500
Defying all logic, crude oil futures rose $1.65, to $100.74, as OPEC nations meet in Vienna, but came to no agreement on raising production quotas. It was another rough day from precious metals speculators, with gold down $6.90, to 1537.80, and silver off 17 cents, to $36.97.
Markets may get some relief from initial unemployment claims due out prior to the market open tomorrow, but counting on that is akin to betting the Cubs will make the playoffs. Not a sound bet.
Wednesday, June 8, 2011
Tuesday, June 7, 2011
Classic Bear Market Session Ends with Disappointment from the Chairman
There's nothing that makes a bear market more palatable than a recognizable chart pattern, and today's charts were the perfect examples.
To wit: up in the early going and down into the close, and that's exactly what the markets offered up today. There is no doubt that the bear market which began in August-October 2007 is alive and well and ready to take more money prisoner. Albeit the long interruption from March 2009 to May 2011, the long rally was nothing more than a cyclical upturn aided by trillions of dollars in free cash flow, courtesy the Federal Reserve.
Now that QE2 is coming to an abrupt end, the bears once again have their claws sharpened and are gnashing their teeth in anticipation of a tasty fete of equity fare.
Fittingly, the day ended with Fed Chairman Ben Bernanke droning on in his monotone about world economic conditions and how the Fed is powerless to do anything about the weather. Yes, he did mention the weather. In essence, his speech before the International Monetary Conference in Atlanta offered nothing to the market; there was no new policy, no mention of further stimulus. In show biz parlance, he bombed, mightily.
Stocks were up early but began selling off around 2:00 pm, wiping out all gains by the close, except in the broad NYSE composite.
It was the fifth straight decline for the Dow, S&P and NASDAQ and a sure sign of more trouble for the embattled US economy ahead.
Dow 12,070.81, -19.15 (0.16%)
NASDAQ 2,701.56, -1.00 (0.04%)
S&P 500 1,284.94, -1.23 (0.10%)
NYSE Composite 8,131.69, +15.82 (0.19%)
Advancers finished slightly ahead of losers, 3174-2454, but new highs succumbed to the downdraft of new lows. On the NASDAQ, 21 new highs, 112 new lows. The NYSE was witness to 37 new highs and 60 new lows, making to combined total 58 new highs and 172 new lows, the forth straight session in which the new lows have outnumbered new highs, and a sure sign that the market is in a correction, soon to become known as the resumption of the bear market.
Volume was scant, though that in and of itself is nothing of a surprise. It exemplifies the general weakness in equities.
NASDAQ Volume 1,861,762,125
NYSE Volume 3,681,650,000
NYMEX crude oil futures for WTI gained 8 cents, closing at $99.09. Gold lost 30 cents, to $1543.60, while silver picked up 39 cents on the bid, at $37.19.
It's a slow week, though it is only the beginning of what appears to be shaping up as one slow, hot summer of declines. There is no catalyst for buying stocks. It is, however, a great time to stock up on gold, silver and other necessary household items one might need in case of emergency, like banks closing or a false flag terror scare or the end of the Euro, which is almost a certainty. The only thing uncertain about the demise of the Euro as a currency is the timing, but rest assured, when it does happen, it will send the global economy into a tailspin.
To wit: up in the early going and down into the close, and that's exactly what the markets offered up today. There is no doubt that the bear market which began in August-October 2007 is alive and well and ready to take more money prisoner. Albeit the long interruption from March 2009 to May 2011, the long rally was nothing more than a cyclical upturn aided by trillions of dollars in free cash flow, courtesy the Federal Reserve.
Now that QE2 is coming to an abrupt end, the bears once again have their claws sharpened and are gnashing their teeth in anticipation of a tasty fete of equity fare.
Fittingly, the day ended with Fed Chairman Ben Bernanke droning on in his monotone about world economic conditions and how the Fed is powerless to do anything about the weather. Yes, he did mention the weather. In essence, his speech before the International Monetary Conference in Atlanta offered nothing to the market; there was no new policy, no mention of further stimulus. In show biz parlance, he bombed, mightily.
Stocks were up early but began selling off around 2:00 pm, wiping out all gains by the close, except in the broad NYSE composite.
It was the fifth straight decline for the Dow, S&P and NASDAQ and a sure sign of more trouble for the embattled US economy ahead.
Dow 12,070.81, -19.15 (0.16%)
NASDAQ 2,701.56, -1.00 (0.04%)
S&P 500 1,284.94, -1.23 (0.10%)
NYSE Composite 8,131.69, +15.82 (0.19%)
Advancers finished slightly ahead of losers, 3174-2454, but new highs succumbed to the downdraft of new lows. On the NASDAQ, 21 new highs, 112 new lows. The NYSE was witness to 37 new highs and 60 new lows, making to combined total 58 new highs and 172 new lows, the forth straight session in which the new lows have outnumbered new highs, and a sure sign that the market is in a correction, soon to become known as the resumption of the bear market.
Volume was scant, though that in and of itself is nothing of a surprise. It exemplifies the general weakness in equities.
NASDAQ Volume 1,861,762,125
NYSE Volume 3,681,650,000
NYMEX crude oil futures for WTI gained 8 cents, closing at $99.09. Gold lost 30 cents, to $1543.60, while silver picked up 39 cents on the bid, at $37.19.
It's a slow week, though it is only the beginning of what appears to be shaping up as one slow, hot summer of declines. There is no catalyst for buying stocks. It is, however, a great time to stock up on gold, silver and other necessary household items one might need in case of emergency, like banks closing or a false flag terror scare or the end of the Euro, which is almost a certainty. The only thing uncertain about the demise of the Euro as a currency is the timing, but rest assured, when it does happen, it will send the global economy into a tailspin.
Monday, June 6, 2011
Stocks Pounded Again as No Catalyst Exists; BofA Gets a Taste of Own Medicine
After last week's carnage, traders lined up on Monday for what looks to be one of the duller trading weeks of the year, though the Greek bailout crisis in Euroland might change the scenario a bit.
There is scant economic news and the quarter doesn't end until June 30, so there are no corporate quarterly earnings reports on which to trade, which leaves markets in a situation nearly resembling "every man for himself."
Inasmuch as traders are a courageous lot, there was some horse-swapping in the session, though most of it was in the form of shedding assets because the US economy looks to be falling back upon itself and could be headed for another recession. QE2 ends abruptly just after options expiration on the 17th, so one could expect an even more severe downturn at that time.
Banks are once again in the cross-hairs. They led today's decline and are possibly among the worst risk assets to be holding at present, especially in the case of the big ones: JP Morgan, BofA, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo.
While many have taken to calling this a "soft patch" - which is just another term for "I have no idea because I only can make money when stocks go up" - more hardened economists see the current condition as analogous to the Fall of '08, as Greece (and maybe Spain, Portugal and Italy) takes the place of Lehman Brothers and another solvency crisis comes to bear.
However, it could be even deeper than that, with one of the major US banks finally throwing in the towel. In that case, it's likely to be Bank of America (BAC), which was highlighted in Fortune magazine on Friday.
In the article linked above, contributor Abigail Field - who has penned a number of solidly-researched pieces on the mortgage crisis - claims that the extent of sloppiness, incompleteness and outright fraud contained in mortgages originated and securitized by Countrywide (taken over by Bank of America in 2008) is likely much more severe and perverse than anyone had imagined and BofA wasn't letting on about it.
Bank of America is easily the one most crippled by the mortgage and foreclosure crisis and the extent of their losses may have been (probably is) grossly understated, both by the bank and by regulators. The sheer volume of bad loans, fraudulent documents and outright chaos in the mortgage servicing department of Bank of America would have taken down a smaller institution years ago, but BofA is the nation's largest bank and they've been aided continuously by the Federal Reserve, at taxpayer expense.
The severity of the crisis continues to dog the mega-bank at every turn and they may have to make the decision of off-board the entire Countrywide unit in order to salvage what remains of their institution. Of course, this is speculation, but the regulations still being written for the Dodd-Frank bill may be complete enough to call for an orderly winding down of the bank should it pose systemic risk, and surely it does.
To a lesser extent, Wells-Fargo (WFC) faces the same situation, as they managed to snatch up Wachovia - and all their no-doc, low-doc loans - during the turmoil of the financial crisis.
On the day, both stocks finished well into the red, with BAC falling to its lowest closing level since May 15, 2009, breaking below the close of 10.92 on November 30, 2010, losing 45 cents, to 10.83. Wells-Fargo (WFC) lost 0.60 to 26.26 and is close to making a double-bottom.
Today was a truly ugly day on Wall Street, as stocks simply lost value steadily, albeit slowly, throughout the session. The lows of the day were reached shortly after 3:00 pm and an abrupt rally fizzled in the final minutes. Nothing but reluctance to sell is keeping this market from an outright crash.
Dow 12,090.11, -61.15 (0.50%)
NASDAQ 2,702.56, -30.22 (1.11%)
S&P 500 1,286.17, -13.99 (1.08%)
NYSE Composite 8,115.87, -106.28 (1.29%)
Despite the modest declines, internals were shattered. Losers dominated winners, 5175-1436. The NASDAQ posted just 31 new highs, overwhelmed by 131 new lows. On the NYSE, there were just 27 new highs, but 65 new lows, putting the combined number at 58 new highs to 196 new lows. This is the third straight day of the lows beating the highs. On Thursday of last week, it was 115 to 76 and Friday saw 130-68, both in favor of new lows.
This is a very telling sign that we are about to enter a serious correction which should last months, at least through September. A ton of money has already fled stocks and more will follow. Volume was moderate, but only because there are fewer and fewer players every day.
NASDAQ Volume 1,826,802,125.00
NYSE Volume 4,034,310,000
Crude oil futures fell $1.21 to $99.01. Gold advanced $2.40, to $1544.80. Silver finished up 51 cents, at $36.80
Finally, in the video below, some justice was served in Florida, where Bank of America got their just deserts.
There is scant economic news and the quarter doesn't end until June 30, so there are no corporate quarterly earnings reports on which to trade, which leaves markets in a situation nearly resembling "every man for himself."
Inasmuch as traders are a courageous lot, there was some horse-swapping in the session, though most of it was in the form of shedding assets because the US economy looks to be falling back upon itself and could be headed for another recession. QE2 ends abruptly just after options expiration on the 17th, so one could expect an even more severe downturn at that time.
Banks are once again in the cross-hairs. They led today's decline and are possibly among the worst risk assets to be holding at present, especially in the case of the big ones: JP Morgan, BofA, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo.
While many have taken to calling this a "soft patch" - which is just another term for "I have no idea because I only can make money when stocks go up" - more hardened economists see the current condition as analogous to the Fall of '08, as Greece (and maybe Spain, Portugal and Italy) takes the place of Lehman Brothers and another solvency crisis comes to bear.
However, it could be even deeper than that, with one of the major US banks finally throwing in the towel. In that case, it's likely to be Bank of America (BAC), which was highlighted in Fortune magazine on Friday.
In the article linked above, contributor Abigail Field - who has penned a number of solidly-researched pieces on the mortgage crisis - claims that the extent of sloppiness, incompleteness and outright fraud contained in mortgages originated and securitized by Countrywide (taken over by Bank of America in 2008) is likely much more severe and perverse than anyone had imagined and BofA wasn't letting on about it.
Bank of America is easily the one most crippled by the mortgage and foreclosure crisis and the extent of their losses may have been (probably is) grossly understated, both by the bank and by regulators. The sheer volume of bad loans, fraudulent documents and outright chaos in the mortgage servicing department of Bank of America would have taken down a smaller institution years ago, but BofA is the nation's largest bank and they've been aided continuously by the Federal Reserve, at taxpayer expense.
The severity of the crisis continues to dog the mega-bank at every turn and they may have to make the decision of off-board the entire Countrywide unit in order to salvage what remains of their institution. Of course, this is speculation, but the regulations still being written for the Dodd-Frank bill may be complete enough to call for an orderly winding down of the bank should it pose systemic risk, and surely it does.
To a lesser extent, Wells-Fargo (WFC) faces the same situation, as they managed to snatch up Wachovia - and all their no-doc, low-doc loans - during the turmoil of the financial crisis.
On the day, both stocks finished well into the red, with BAC falling to its lowest closing level since May 15, 2009, breaking below the close of 10.92 on November 30, 2010, losing 45 cents, to 10.83. Wells-Fargo (WFC) lost 0.60 to 26.26 and is close to making a double-bottom.
Today was a truly ugly day on Wall Street, as stocks simply lost value steadily, albeit slowly, throughout the session. The lows of the day were reached shortly after 3:00 pm and an abrupt rally fizzled in the final minutes. Nothing but reluctance to sell is keeping this market from an outright crash.
Dow 12,090.11, -61.15 (0.50%)
NASDAQ 2,702.56, -30.22 (1.11%)
S&P 500 1,286.17, -13.99 (1.08%)
NYSE Composite 8,115.87, -106.28 (1.29%)
Despite the modest declines, internals were shattered. Losers dominated winners, 5175-1436. The NASDAQ posted just 31 new highs, overwhelmed by 131 new lows. On the NYSE, there were just 27 new highs, but 65 new lows, putting the combined number at 58 new highs to 196 new lows. This is the third straight day of the lows beating the highs. On Thursday of last week, it was 115 to 76 and Friday saw 130-68, both in favor of new lows.
This is a very telling sign that we are about to enter a serious correction which should last months, at least through September. A ton of money has already fled stocks and more will follow. Volume was moderate, but only because there are fewer and fewer players every day.
NASDAQ Volume 1,826,802,125.00
NYSE Volume 4,034,310,000
Crude oil futures fell $1.21 to $99.01. Gold advanced $2.40, to $1544.80. Silver finished up 51 cents, at $36.80
Finally, in the video below, some justice was served in Florida, where Bank of America got their just deserts.
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