Every day, day after day after day, the sharks on Wall Street do the same thing, over and over and over again. According to the new rules of the game, stocks are suddenly much more attractive at 2:30, or 3:00, or 3:15, or 3:30, without any news, without any economic reports, without any technical rationale, than they were earlier in the day.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
Tuesday, April 7, 2009
Monday, April 6, 2009
Wall Street Crooks Steal from Both Sides
Upon which side of the debate do you fall? Do you believe this is a bear market rally or the beginning of a new bull?
Whatever your opinion, the big money which flows from the major brokerages has you covered. Today was a serious case in point of how the brokerages steal from both sides. Stocks began the day with losses, hit bottom at 12:30 and gained the rest of the day, finishing close to the best levels of the session, with minor losses.
The Dow, in particular, outperformed the other indices by a wide margin, likely owing to the fact that three of the major failed, insolvent banking institutions - Bank of America, JP Morgan Chase and Citigroup - are included in the average. Throw in American Express, General Motors and General Electric and you have what prosecutors would call means and motive for manipulating the Dow currency close to the break-even line, which is exactly what occurred on Monday.
Dow 7,975.85, -41.74 (0.52%)
NASDAQ 1,606.71, -15.16 (0.93%)
S&P 500 835.48, -7.02 (0.83%)
NYSE Composite 5,250.10, -68.65 (1.29%)
Apparently, financial outlooks were poor in the morning, but markedly improved in the afternoon. I prefer to believe that the major brokerages, which can exert as much or as little influence as they like, prefer their markets to be rigged in their favor. In any case, what the charts are yelling, loud and clear, is that the rally of recent weeks has run out of steam, having hit a trading and volume top on Thursday of last week and followed up with what amounts to churning the following two days.
Of course, I've been proven wrong before and there's a high probability that the Wall Street fixers will say, "to hell with the technicals," which are pointing upwards at heavy resistance, and just pump the indices right on through, declaring a new bull market, the end of banking problems and a new day in America.
There are more than a few detractors to the view, though the general tone of the lap-dog media is that conditions are improving, even though the only evidence of that are a couple of minor bounces off bottoms by a few random economic indicators and the actual stock market rally itself (which you can't count as a sign it's getting better and also use as the ultimate discounting mechanism).
Looking at market internals, it is notable that declining issues outnumbered advancing ones, 4497-1963, a 5-2 margin, which is much worse than the headline numbers suggest. Additionally, new low continued ahead of new highs, 66-18, a narrow edge, but one that has yet to flip over after favoring the new lows on a daily basis for more than 16 months.
Volume was down again, as it was Friday, suggesting a dearth of buying enthusiasm, not surprising after the giant run-up which has stretched to four weeks without interruption.
NYSE Volume 6,221,203,500
NASDAQ Volume 1,976,220,500
Commodities traded in a more realistic fashion, with oil down $1.46, to $51.05, though it traded below $50 briefly during the day. Gold's losses continued to mount, losing $24.50, to $872.80. Silver was also beaten down 63 cents, to finish at $12.11, a near-term low and a distinct buying opportunity.
Some have questioned my penchant for silver under $13.00 an ounce, so here's my rationale, simply put: At $13.80 per ounce, 90% silver coins, of which are the widest variety in the US, have a melt value exactly 10 times their face value, so it's an easy calculation, but, more importantly, if US greenbacks lose their value entirely, silver coins may become the currency of choice, and the 10X face value may become the accepted rate of exchange, though there's some room for thinking that the number could be 20X face value, which would be even better.
In any case, buying at $13/oz. or less, you will eventually be a winner when the US economy fully disintegrates. Whether it's by currency devaluation and resultant inflation, or, runaway deflation, silver coins will still maintain solid value either here or abroad. Don't get me wrong. I'd love to buy more pre-1964 Washington quarters and Morgan and Peace dollars at $6/oz., though sadly, those days seem to be long gone.
The metals and most other commodities continue to display classic deflation conditions. In such a scenario, investors and traders alike are victims of slack demand and consequent oversupply. The argument for deflation continues to gain traction as the Fed and treasury desperately try to inflate, though their efforts are largely staunched because they continue to throw money down the black hole that consists of the nation's five largest banks, plus AIG.
Another does of reality, courtesy former bank regulator, William K. Black:
An exceptional interview with Mr. Black was aired this past weekend on Bill Moyers Journal
Whatever your opinion, the big money which flows from the major brokerages has you covered. Today was a serious case in point of how the brokerages steal from both sides. Stocks began the day with losses, hit bottom at 12:30 and gained the rest of the day, finishing close to the best levels of the session, with minor losses.
The Dow, in particular, outperformed the other indices by a wide margin, likely owing to the fact that three of the major failed, insolvent banking institutions - Bank of America, JP Morgan Chase and Citigroup - are included in the average. Throw in American Express, General Motors and General Electric and you have what prosecutors would call means and motive for manipulating the Dow currency close to the break-even line, which is exactly what occurred on Monday.
Dow 7,975.85, -41.74 (0.52%)
NASDAQ 1,606.71, -15.16 (0.93%)
S&P 500 835.48, -7.02 (0.83%)
NYSE Composite 5,250.10, -68.65 (1.29%)
Apparently, financial outlooks were poor in the morning, but markedly improved in the afternoon. I prefer to believe that the major brokerages, which can exert as much or as little influence as they like, prefer their markets to be rigged in their favor. In any case, what the charts are yelling, loud and clear, is that the rally of recent weeks has run out of steam, having hit a trading and volume top on Thursday of last week and followed up with what amounts to churning the following two days.
Of course, I've been proven wrong before and there's a high probability that the Wall Street fixers will say, "to hell with the technicals," which are pointing upwards at heavy resistance, and just pump the indices right on through, declaring a new bull market, the end of banking problems and a new day in America.
There are more than a few detractors to the view, though the general tone of the lap-dog media is that conditions are improving, even though the only evidence of that are a couple of minor bounces off bottoms by a few random economic indicators and the actual stock market rally itself (which you can't count as a sign it's getting better and also use as the ultimate discounting mechanism).
Looking at market internals, it is notable that declining issues outnumbered advancing ones, 4497-1963, a 5-2 margin, which is much worse than the headline numbers suggest. Additionally, new low continued ahead of new highs, 66-18, a narrow edge, but one that has yet to flip over after favoring the new lows on a daily basis for more than 16 months.
Volume was down again, as it was Friday, suggesting a dearth of buying enthusiasm, not surprising after the giant run-up which has stretched to four weeks without interruption.
NYSE Volume 6,221,203,500
NASDAQ Volume 1,976,220,500
Commodities traded in a more realistic fashion, with oil down $1.46, to $51.05, though it traded below $50 briefly during the day. Gold's losses continued to mount, losing $24.50, to $872.80. Silver was also beaten down 63 cents, to finish at $12.11, a near-term low and a distinct buying opportunity.
Some have questioned my penchant for silver under $13.00 an ounce, so here's my rationale, simply put: At $13.80 per ounce, 90% silver coins, of which are the widest variety in the US, have a melt value exactly 10 times their face value, so it's an easy calculation, but, more importantly, if US greenbacks lose their value entirely, silver coins may become the currency of choice, and the 10X face value may become the accepted rate of exchange, though there's some room for thinking that the number could be 20X face value, which would be even better.
In any case, buying at $13/oz. or less, you will eventually be a winner when the US economy fully disintegrates. Whether it's by currency devaluation and resultant inflation, or, runaway deflation, silver coins will still maintain solid value either here or abroad. Don't get me wrong. I'd love to buy more pre-1964 Washington quarters and Morgan and Peace dollars at $6/oz., though sadly, those days seem to be long gone.
The metals and most other commodities continue to display classic deflation conditions. In such a scenario, investors and traders alike are victims of slack demand and consequent oversupply. The argument for deflation continues to gain traction as the Fed and treasury desperately try to inflate, though their efforts are largely staunched because they continue to throw money down the black hole that consists of the nation's five largest banks, plus AIG.
Another does of reality, courtesy former bank regulator, William K. Black:
An exceptional interview with Mr. Black was aired this past weekend on Bill Moyers Journal
Friday, April 3, 2009
Wall Street Smoking Crack
The crack dealers working the area of lower Manhattan must be flush with cash because it appears certain that the brokers, dealers, wheeler-dealers, scam artists, cheats liars, high muckety-muck, junkies, flunkies, lunkheads, losers and lowlives of all stripes are consuming copious amounts of the stuff.
After a multi-week stock market run of between 20 and 25%, depending on your index of choice, a week chock-full of eyebrow-raising economic reports, a failed attempt at worldwide order and financial diplomacy at the G20, and the worst unemployment in 25 years, the masters of the financial universe decided to keep pushing prices higher, despite the aforementioned data and news, and the imminent revelations from corporate quarterly reports beginning next week.
No matter how anyone tries to justify the numbers, a loss of more than 2 million jobs just in the first quarter of this year is not good news. Stocks should have been headed lower, not higher. Watching the indices crawl forward, it seems that the charts must be from some foreign planet, not ours, which is mired amid the throes of a deepening - not improving - financial breakdown.
Apparently, the wizards of Wall Street see things differently. A slowing economy is a fine one to made ludicrous bets into according to their actions. Stimulus, bailouts, Ponzi schemes, a deteriorating housing market and job losses creates the perfect investing climate according to these geniuses. They are smoking some very powerful dope down there.
Stocks traded in tight ranges throughout the session. Today's action could have been due to indecision, consolidation or manipulation, but it was probably a little bit of each. In any case, nothing moved enough to raise anyone's blood pressure much. It was an all-around tough day for day-traders and short timers.
Dow 8,017.59, +39.51 (0.50%)
NASDAQ 1,621.87, +19.24 (1.20%)
S&P 500 842.50 8.12 (0.97%)
NYSE Composite 5,318.75, +51.65 (0.98%)
Stocks finished with their 4th straight week to the upside. That's a pretty nifty record in the middle of economic calamity and hardly believable. Wall Street insiders realize that another precipitous decline in stock values could lead to some very ugly consequences including widespread firings of top banking professionals, prosecutions and jailings of same, social unrest, and a near-complete breakdown of the social contract and economic death. Thus, the rally must continue, or, at least appear to be solid. It's just another sham being played by the monied interests of Wall Street and Washington and being dribbled along by the feigning financial press.
On the day, advancers beat decliners, 4091-2378, though new lows continued their advantage over new highs, 77-16. Volume was moderate.
NYSE Volume 1,484,215,000
NASDAQ Volume 2,140,955,000
To amplify Wall Street's insanity, read on. This hardly warranted mention on the airwaves, unbelievably.
Self-dealing made simple: The same banks which packaged the "toxic" mortgage loans - for which they received government bailout money - are now looking into buying the same assets under Treasury's Private-Public Partnership Investment Plan.
Yes, you read that right. Citigroup, Morgan Stanley, JP Morgan Chase and Goldman Sachs want to be buyers of each other's near-worthless paper, taking advantage of the government's largesse in the form of 14-1 leverage. These same banks would like to buy up each other's bad loans with roughly 15% down, the balance financed by the government, or, read correctly, the badly duped and without recourse US taxpayer.
Not only is this the worst self-dealing ever witnessed on the planet, but it also reeks of the kind of scheme Bernie Madoff recently re-popularized: PONZI. All of this will likely be swept neatly under the rug with help of the duplicitous Treasury Secretary, Fed Chairman Ben Bernanke and the Liar-King, President Barack Obama.
I know I predicted this would happen when I first heard of the proposal, so why should I - or anyone - be shocked? Our government has one purpose now, simply to serve the wishes of their puppet-masters on Wall Street. The whole bunch of them - from the President and congress to the bank CEOs - should be tried on charges of grand larceny and treason, because stealing from the very people you swore to protect and defend is nothing less.
Commodities dithered throughout the day. Oil closed 13 cents lower, at $52.51. Gold fell another $11.60, to $897.30. Silver shed 29 cents to finish the week at $12.74.
And here's a dose of honesty:
Have a nice weekend.
After a multi-week stock market run of between 20 and 25%, depending on your index of choice, a week chock-full of eyebrow-raising economic reports, a failed attempt at worldwide order and financial diplomacy at the G20, and the worst unemployment in 25 years, the masters of the financial universe decided to keep pushing prices higher, despite the aforementioned data and news, and the imminent revelations from corporate quarterly reports beginning next week.
No matter how anyone tries to justify the numbers, a loss of more than 2 million jobs just in the first quarter of this year is not good news. Stocks should have been headed lower, not higher. Watching the indices crawl forward, it seems that the charts must be from some foreign planet, not ours, which is mired amid the throes of a deepening - not improving - financial breakdown.
Apparently, the wizards of Wall Street see things differently. A slowing economy is a fine one to made ludicrous bets into according to their actions. Stimulus, bailouts, Ponzi schemes, a deteriorating housing market and job losses creates the perfect investing climate according to these geniuses. They are smoking some very powerful dope down there.
Stocks traded in tight ranges throughout the session. Today's action could have been due to indecision, consolidation or manipulation, but it was probably a little bit of each. In any case, nothing moved enough to raise anyone's blood pressure much. It was an all-around tough day for day-traders and short timers.
Dow 8,017.59, +39.51 (0.50%)
NASDAQ 1,621.87, +19.24 (1.20%)
S&P 500 842.50 8.12 (0.97%)
NYSE Composite 5,318.75, +51.65 (0.98%)
Stocks finished with their 4th straight week to the upside. That's a pretty nifty record in the middle of economic calamity and hardly believable. Wall Street insiders realize that another precipitous decline in stock values could lead to some very ugly consequences including widespread firings of top banking professionals, prosecutions and jailings of same, social unrest, and a near-complete breakdown of the social contract and economic death. Thus, the rally must continue, or, at least appear to be solid. It's just another sham being played by the monied interests of Wall Street and Washington and being dribbled along by the feigning financial press.
On the day, advancers beat decliners, 4091-2378, though new lows continued their advantage over new highs, 77-16. Volume was moderate.
NYSE Volume 1,484,215,000
NASDAQ Volume 2,140,955,000
To amplify Wall Street's insanity, read on. This hardly warranted mention on the airwaves, unbelievably.
Self-dealing made simple: The same banks which packaged the "toxic" mortgage loans - for which they received government bailout money - are now looking into buying the same assets under Treasury's Private-Public Partnership Investment Plan.
Yes, you read that right. Citigroup, Morgan Stanley, JP Morgan Chase and Goldman Sachs want to be buyers of each other's near-worthless paper, taking advantage of the government's largesse in the form of 14-1 leverage. These same banks would like to buy up each other's bad loans with roughly 15% down, the balance financed by the government, or, read correctly, the badly duped and without recourse US taxpayer.
Not only is this the worst self-dealing ever witnessed on the planet, but it also reeks of the kind of scheme Bernie Madoff recently re-popularized: PONZI. All of this will likely be swept neatly under the rug with help of the duplicitous Treasury Secretary, Fed Chairman Ben Bernanke and the Liar-King, President Barack Obama.
I know I predicted this would happen when I first heard of the proposal, so why should I - or anyone - be shocked? Our government has one purpose now, simply to serve the wishes of their puppet-masters on Wall Street. The whole bunch of them - from the President and congress to the bank CEOs - should be tried on charges of grand larceny and treason, because stealing from the very people you swore to protect and defend is nothing less.
Commodities dithered throughout the day. Oil closed 13 cents lower, at $52.51. Gold fell another $11.60, to $897.30. Silver shed 29 cents to finish the week at $12.74.
And here's a dose of honesty:
Have a nice weekend.
Thursday, April 2, 2009
Was Today the End of the Bull Run?
Markets boomed worldwide on Thursday as the Group of 20 met, promised to pass along $1 Trillion to the IMF and the World Bank, promised to improve regulations on banks and other financial solutions and left jolly London amid smiles, niceties and bright lights.
Naturally, nothing will really change. Twenty leaders, from the world's largest and best-developed economies, meeting over tea, crumpets, dinner and wide tables can accomplish less than nothing, and this group surely succeeded in one regard: they put on a very nice show. The reality of the situation is that the United States, Europe and the BRIC nations (Brazil, Russia, India, China) are as far apart - and the animosity just as great - as before they staged their little confidence-fest.
Back in America, where real people set about to do real work, another 669,000 people filed for unemployment in the past week. The number of people continuing to receive weekly or bi-weekly unemployment checks set another record at 5.8 million. Once again, Wall Street completely ignored the dire employment numbers and all of the evil implications behind a growing number of idle hands in America, and shot straight up at the open, reaching heights not seen since early February.
The Dow surged past 8000, the NASDAQ pushed above 1600 and the S&P 500 touched, for an instant, the bottom of the clouds of heaven, hitting 845 just before 1:00, coincidentally about the same time the G20 meeting was concluding in London. Therein laid the crucial test - at 845 on the S&P - a key inflection point at which the index has closed on four separate occasions recently: on December 4, January 27, January 29 and February 5. Since then, the S&P fell to 676 (March 9) and hit it again today. It took 21 sessions to bottom out and another 18 to get back to 845, so, if you are of the camp looking for the perfect V bottom, this fits it to a tee.
Two problems arise immediately, however, and a slew of them continue in the background. First, the index did not close at the magic number; indeed, it ended the day 11 points below it. Second, the late day selling seemed to signal the end of a mammoth three-day effort just to reach for the stars. And, of course, with the G20 meeting now behind us, and the government's non-farms payroll data due out tomorrow morning, one has to wonder just how long Wall Street can continue to ignore the massive numbers losing jobs every day, week and month. Besides that, we are poised just days away from important first quarter corporate reports, of which every indication points to it being a very dull quarter for a wide swath of companies.
All this week, investors shrugged off economic data, most of which consisted of basic bottom scraping, calling it "improvement" as many of the numbers being tossed about beat expert expectations, though marginally. A more realistic reading might conclude that these numbers suggest that we may have hit a bottom and that it could be only a temporary one.
More pessimistic minds would contend that the figures released this week amounted to nothing more than statistical rounding and do not indicate any kind of trend, and that the economy is ready to dive once again. In any case, stocks have climbed the proverbial "wall of worry" all the way to the top, to a point a which any more gains will begin to confirm that a new bull market has begun, and that the bears are dead meat. Sadly, for the optimists, bears do not go into hibernation with the advent of Spring. In fact, they are now hungry for more red meat.
One other factor to consider. The overall volume of today's run was quite literally off the charts, the highest volume seen since investors were selling as fast as they could. Today stocks were changing hands at a lightning pace, indicative of a blow-off top. We will find out whether or not it was the end of the bull run in less than 18 hours, when the markets are open for the final time this week.
Dow 7,978.08, +216.48 (2.79%)
NASDAQ 1,602.63, +51.03 (3.29%)
S&P 500 834.38, +23.30 (2.87%)
NYSE Composite 5,267.10, +181.34 (3.57%)
Advancers beat down decliners handily, 5479-1140, but despite the huge gains of the past three sessions, new lows did not give up their advantage over new highs, beating them once more, 89-42. While the gap has narrowed significantly, and the number of new highs continued to grow, this indicator has yet to roll over. If and when it does, and if it is able to maintain a bias to the opposite, then we may begin looking at the end of the bear market, not now, and not any sooner.
NYSE Volume 1,874,517,000
NASDAQ Volume 2,820,056,000
Taking a peek inside the Dow at some of the components, we note that 28 were gainers and just two, losers: Microsoft (MSFT) and Pfizer (PFE). leadership came from basic materials and industrials, with Alcoa (AA), Caterpillar (CAT), DuPont (DD), General Motors (GM) and United Technologies (UTX) sporting the best percentage gains. Banks were subdued, with JP Morgan Chase up a mere 0.07 on the day. One outlier was Disney (DIS), which gained upwards of 7%.
As far as concerns the banks, they were handed another get-out-of-jail-free card today as the FASB eased mark-to-market accounting rules, allowing the institutions with the most toxic assets to reprice those entities in more favorable terms. In other words, it's a return to fairyland accounting for tier 3 assets. Tra-la-la.
Oil ramped up $4.25, to $52.64. Gold hit the skids, losing $18.80, to $908.90. Silver gained 5 cents to $13.03.
Stocks will almost surely record their 4th straight week of gains when the indices close tomorrow. How much of a gain depends on a number of factors, not the least of which being how eager investors are about locking in profits over the weekend and how seriously those same investors view the employment picture.
Naturally, nothing will really change. Twenty leaders, from the world's largest and best-developed economies, meeting over tea, crumpets, dinner and wide tables can accomplish less than nothing, and this group surely succeeded in one regard: they put on a very nice show. The reality of the situation is that the United States, Europe and the BRIC nations (Brazil, Russia, India, China) are as far apart - and the animosity just as great - as before they staged their little confidence-fest.
Back in America, where real people set about to do real work, another 669,000 people filed for unemployment in the past week. The number of people continuing to receive weekly or bi-weekly unemployment checks set another record at 5.8 million. Once again, Wall Street completely ignored the dire employment numbers and all of the evil implications behind a growing number of idle hands in America, and shot straight up at the open, reaching heights not seen since early February.
The Dow surged past 8000, the NASDAQ pushed above 1600 and the S&P 500 touched, for an instant, the bottom of the clouds of heaven, hitting 845 just before 1:00, coincidentally about the same time the G20 meeting was concluding in London. Therein laid the crucial test - at 845 on the S&P - a key inflection point at which the index has closed on four separate occasions recently: on December 4, January 27, January 29 and February 5. Since then, the S&P fell to 676 (March 9) and hit it again today. It took 21 sessions to bottom out and another 18 to get back to 845, so, if you are of the camp looking for the perfect V bottom, this fits it to a tee.
Two problems arise immediately, however, and a slew of them continue in the background. First, the index did not close at the magic number; indeed, it ended the day 11 points below it. Second, the late day selling seemed to signal the end of a mammoth three-day effort just to reach for the stars. And, of course, with the G20 meeting now behind us, and the government's non-farms payroll data due out tomorrow morning, one has to wonder just how long Wall Street can continue to ignore the massive numbers losing jobs every day, week and month. Besides that, we are poised just days away from important first quarter corporate reports, of which every indication points to it being a very dull quarter for a wide swath of companies.
All this week, investors shrugged off economic data, most of which consisted of basic bottom scraping, calling it "improvement" as many of the numbers being tossed about beat expert expectations, though marginally. A more realistic reading might conclude that these numbers suggest that we may have hit a bottom and that it could be only a temporary one.
More pessimistic minds would contend that the figures released this week amounted to nothing more than statistical rounding and do not indicate any kind of trend, and that the economy is ready to dive once again. In any case, stocks have climbed the proverbial "wall of worry" all the way to the top, to a point a which any more gains will begin to confirm that a new bull market has begun, and that the bears are dead meat. Sadly, for the optimists, bears do not go into hibernation with the advent of Spring. In fact, they are now hungry for more red meat.
One other factor to consider. The overall volume of today's run was quite literally off the charts, the highest volume seen since investors were selling as fast as they could. Today stocks were changing hands at a lightning pace, indicative of a blow-off top. We will find out whether or not it was the end of the bull run in less than 18 hours, when the markets are open for the final time this week.
Dow 7,978.08, +216.48 (2.79%)
NASDAQ 1,602.63, +51.03 (3.29%)
S&P 500 834.38, +23.30 (2.87%)
NYSE Composite 5,267.10, +181.34 (3.57%)
Advancers beat down decliners handily, 5479-1140, but despite the huge gains of the past three sessions, new lows did not give up their advantage over new highs, beating them once more, 89-42. While the gap has narrowed significantly, and the number of new highs continued to grow, this indicator has yet to roll over. If and when it does, and if it is able to maintain a bias to the opposite, then we may begin looking at the end of the bear market, not now, and not any sooner.
NYSE Volume 1,874,517,000
NASDAQ Volume 2,820,056,000
Taking a peek inside the Dow at some of the components, we note that 28 were gainers and just two, losers: Microsoft (MSFT) and Pfizer (PFE). leadership came from basic materials and industrials, with Alcoa (AA), Caterpillar (CAT), DuPont (DD), General Motors (GM) and United Technologies (UTX) sporting the best percentage gains. Banks were subdued, with JP Morgan Chase up a mere 0.07 on the day. One outlier was Disney (DIS), which gained upwards of 7%.
As far as concerns the banks, they were handed another get-out-of-jail-free card today as the FASB eased mark-to-market accounting rules, allowing the institutions with the most toxic assets to reprice those entities in more favorable terms. In other words, it's a return to fairyland accounting for tier 3 assets. Tra-la-la.
Oil ramped up $4.25, to $52.64. Gold hit the skids, losing $18.80, to $908.90. Silver gained 5 cents to $13.03.
Stocks will almost surely record their 4th straight week of gains when the indices close tomorrow. How much of a gain depends on a number of factors, not the least of which being how eager investors are about locking in profits over the weekend and how seriously those same investors view the employment picture.
Wednesday, April 1, 2009
The Real April's Fools
Investors. Those people who study charts, read reports, follow the economy, buy and sell stocks are the truest of fools because - in America at least - they are playing poker with a bunch of cheats who can reshuffle the deck, hide cards and pull inside straights whenever they please. It also helps when they - the dealers, the cheats, the cons on Wall Street - have government officials all the way up to the Treasury Secretary, Chairman of the Federal Reserve, various high-powered members of congress and probably even the President himself, in their collective back pockets.
Today's trade was an object lesson of why it isn't wise to play cards with people who carry stacked decks.
At 8:15 this morning, the ADP Employment Survey, the most reliable set of numbers regarding private sector employment in the country, ticked off the details of our sad and seriously declining economic condition with the release of their March report, which showed that the private sector had shed another 742,000 jobs during the month. Predictably, at 9:30 am, the stock markets opened with broad losses, but the remorse for nearly a quarter of a million more Americans going jobless in one month's time lasted merely a half hour.
At 10:00, three more economic reports became public. Construction spending slipped 0.9% in February, the Institute of Supply Manager's (ISM) index of manufacturing activity rose to 36.3 in March, from 35.8 in February; and, Pending Home Sales for February grew by 2.1% in February after hitting rock bottom with a decline of 7.7% in January.
Apparently, these minor blips of improvement were enough to reverse a 125-point loss on the Dow (with all other indices trading lower in similar fashion) into a 152-point gain for the day. Those people out of work be damned. All the other indicators showed improvement.
As the day progressed, the news improved (satire). Ford posted a 41% decline in sales over year-ago figures. General Motors were only down 45%. Chrysler's March sales were down only39%. All of the figures proved to be better than "expert's expectations." So, the auto makers are still scraping the bottom, but it wasn't as bad as expected, so let's go buy some worthless stocks from the hucksters on Wall Street. Fools. Morons. Imbeciles. Investors. All share the same definition of mindless sheep being led to slaughter.
All of this is like saying that your basketball team, which lost by 45 points the week earlier, only lost by 41 today. Hip-hip, Horray! Let's break out the cake and party hats! Bring on the champagne!
Considering today's and yesterday's economic reports and news items, how is it that the dow Jones Industrilas overcome the massive 254-point drop Monday and gain back 240 points? It really is April Fool's Day, and the joke is on all of us suckers who continue to play this market as though it's a fair game. It's not. It's rigged by the nation's largest banks and brokerages, all of which are effectively insolvent.
Take a gander at this insightful article by Justice Litle, entitled Turbo Tommy's Sneaky Scam (Part 1 & 2), which details how Treasury Secretary Tim Geithner's Public Private Partnership Investment Plan (to remove toxic assets from bank balance sheets) can only work if it's rigged. This is not mainstream reading, but Litle seems to have it nailed down pretty well. I'd surely trust his judgement more than the thieves and criminals running our country and controlling the media.
While Wall Street was rollicking, Obama the Great was across the pond, trying to quiet down the full blown revolution of our trading partners at the meeting of the G20. Forget what the mainstream media tries to tell you, that Obama is being counted on to come up with concensus, that he alone can organize the world's leaders to follow our lead of debasing our currency, expanding our deficits to ungodly levels and doling out dollars to anybody with a hand out.
For a better insight into what's really happening in London, check out "China: Partner, Adversary, Rebel" by Jim Willie CB. It's an incredible insight which I am overjoyed to be able to share.
Dow 7,761.60, +152.68 (2.01%)
NASDAQ 1,551.60, +23.01 (1.51%)
S&P 500 811.08, +13.21 (1.66%)
NYSE Composite 5,085.76, +106.78 (2.14%)
On the day, advancers led decliners, 4585-1883. New lows continued to outpace new highs, 85-19. Volume, due to the high number of phantom trades being place by Goldman Sachs, JP Morgan Chase, Merrill Lynch and Morgan Stanley, was elevated.
NYSE Volume 1,502,768,000
NASDAQ Volume 2,287,061,000
Commodities were mixed, but mostly lower. Oil lost $1.51, to 48.39. Gold gained $2.70, to $927.70, while silver lost a penny to $12.98.
Normally, I'd be happy about a stock market gain, especially in this environment, but, when the truth of just how corrupt the system has become smacks you on the forehead, you sit up, take notice and get angry. And I've been angry for a long time. I'm just about over the edge now.
Today's trade was an object lesson of why it isn't wise to play cards with people who carry stacked decks.
At 8:15 this morning, the ADP Employment Survey, the most reliable set of numbers regarding private sector employment in the country, ticked off the details of our sad and seriously declining economic condition with the release of their March report, which showed that the private sector had shed another 742,000 jobs during the month. Predictably, at 9:30 am, the stock markets opened with broad losses, but the remorse for nearly a quarter of a million more Americans going jobless in one month's time lasted merely a half hour.
At 10:00, three more economic reports became public. Construction spending slipped 0.9% in February, the Institute of Supply Manager's (ISM) index of manufacturing activity rose to 36.3 in March, from 35.8 in February; and, Pending Home Sales for February grew by 2.1% in February after hitting rock bottom with a decline of 7.7% in January.
Apparently, these minor blips of improvement were enough to reverse a 125-point loss on the Dow (with all other indices trading lower in similar fashion) into a 152-point gain for the day. Those people out of work be damned. All the other indicators showed improvement.
As the day progressed, the news improved (satire). Ford posted a 41% decline in sales over year-ago figures. General Motors were only down 45%. Chrysler's March sales were down only39%. All of the figures proved to be better than "expert's expectations." So, the auto makers are still scraping the bottom, but it wasn't as bad as expected, so let's go buy some worthless stocks from the hucksters on Wall Street. Fools. Morons. Imbeciles. Investors. All share the same definition of mindless sheep being led to slaughter.
All of this is like saying that your basketball team, which lost by 45 points the week earlier, only lost by 41 today. Hip-hip, Horray! Let's break out the cake and party hats! Bring on the champagne!
Considering today's and yesterday's economic reports and news items, how is it that the dow Jones Industrilas overcome the massive 254-point drop Monday and gain back 240 points? It really is April Fool's Day, and the joke is on all of us suckers who continue to play this market as though it's a fair game. It's not. It's rigged by the nation's largest banks and brokerages, all of which are effectively insolvent.
Take a gander at this insightful article by Justice Litle, entitled Turbo Tommy's Sneaky Scam (Part 1 & 2), which details how Treasury Secretary Tim Geithner's Public Private Partnership Investment Plan (to remove toxic assets from bank balance sheets) can only work if it's rigged. This is not mainstream reading, but Litle seems to have it nailed down pretty well. I'd surely trust his judgement more than the thieves and criminals running our country and controlling the media.
While Wall Street was rollicking, Obama the Great was across the pond, trying to quiet down the full blown revolution of our trading partners at the meeting of the G20. Forget what the mainstream media tries to tell you, that Obama is being counted on to come up with concensus, that he alone can organize the world's leaders to follow our lead of debasing our currency, expanding our deficits to ungodly levels and doling out dollars to anybody with a hand out.
For a better insight into what's really happening in London, check out "China: Partner, Adversary, Rebel" by Jim Willie CB. It's an incredible insight which I am overjoyed to be able to share.
Dow 7,761.60, +152.68 (2.01%)
NASDAQ 1,551.60, +23.01 (1.51%)
S&P 500 811.08, +13.21 (1.66%)
NYSE Composite 5,085.76, +106.78 (2.14%)
On the day, advancers led decliners, 4585-1883. New lows continued to outpace new highs, 85-19. Volume, due to the high number of phantom trades being place by Goldman Sachs, JP Morgan Chase, Merrill Lynch and Morgan Stanley, was elevated.
NYSE Volume 1,502,768,000
NASDAQ Volume 2,287,061,000
Commodities were mixed, but mostly lower. Oil lost $1.51, to 48.39. Gold gained $2.70, to $927.70, while silver lost a penny to $12.98.
Normally, I'd be happy about a stock market gain, especially in this environment, but, when the truth of just how corrupt the system has become smacks you on the forehead, you sit up, take notice and get angry. And I've been angry for a long time. I'm just about over the edge now.
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