Viewing the market over the past two trading sessions, a comparison to an olympic athlete might be apropos, say, that of a high-jumper, like Dwight Stones back in the day, sailing over the bar at 7'1", but then failing at the next height, and again, until finally getting his steps and takeoff and velocity all right on the third attempt, at which point he flies into Olympic history.
That's what the market appears to have done, after failing badly on Tuesday, finally getting the commitment and the volume and the lack of bad economic data points and the short sellers all lined up in the proper order to propel the Dow back over the 10,000 bar, taking the antecedent indices along for the joyful ride.
With the level of short interest in the marketplace, there's no doubt that the push higher in the final minutes of trading on Monday continued into Tuesday on the backs of the shorts, who, like it or not, have been having their way for the past two months running. Anybody getting squeezed here was either in too late or was already well in the money and made profits when they covered their bets. Worse yet, many of the same players who profited today on the upticks were the same people making hay on the way down. It's just the way Wall Street works these days, now that the buy and hold investment strategy (the one which our fathers and grandfathers used to make money slowly and honorably) have been relegated to the dustbin of market history in favor of "quant" trading and electronic push-button charting and graphing which the investment houses are now all shoving down our throats.
Sure, you can trade right from your iphone, computer or other electronic instrument, as though it's a race to see who squeeze the last few pennies on execution, but is that any way to treat your money? Not really, though the masters of the universe running the funds and brokerages are generally using OPM (other people's money), so who cares? And that's why today's rally pushed higher and higher. The money masters flicked the switch at the open in the US, abruptly turning around all of the European markets - which were suffering severe declines until late in their respective trading days - and sending US stocks soaring.
One can only be amused by the cheerleading nature of the financial press, despite mountains of data that not only suggest, but verify, that the "recovery" was something of a chimera, and that global markets are still fundamentally unsound. Reading a headline like, "European bank stress tests and U.S. retail sales lift the Dow" gives one reason to probe deeper, as we come to find out that the stress tests to be performed on European banks haven't actually been started, but that a few details about what they may entail were released. Also, we find out that the esteemed group known as the International Council of Shopping Centers reported same store sales in the ICSC-Goldman Sachs (hmm, those guys again) weekly index, which is "constructed using sales-weighted geometric average growth rates to preserve long-term consistency and is statistically benchmarked to a broad-based monthly retail industry sales aggregate" (in other words, it's bull-$^%#), was up 3.9% year-over-year, the best level since May.
Well, that being only two months ago, why did the market go straight down then? Also, one may recall that retail sakes a year ago were pretty dismal, so, being up nearly 4% is not even back to what anyone would consider "good," though it apparently works for the fraudsters and con men who populate the equity trading markets.
And, by the way, that ICSC-Goldman Sachs index excludes restaurants and vehicle sales, which, unless you have consumers who neither eat nor drive, seems to be an important element in tracking retail sales performance. They have plenty of other modifiers with which they can interpret the data seemingly any way they like, such as the "Piser Method, which was popular in the early 1930s." I guess they tried lying to people back in the Great Depression, too, and we all know how well that worked out.
One should not overlook - though everybody trading stocks apparently did today - that vacancies at large malls in the top 80 U.S. markets rose to 9 percent in the second quarter and open-air center is now at 10.9%, that data coming from the same web site as the cheery same-store sales index.
So, the market cleared the bar of 10,000, but only until maybe tomorrow, when initial unemployment claims for the most recent week are released. Maybe the government can fudge those numbers a bit, as they've been downright depressing lately. Of course, this rally could go on for another few weeks, especially since earnings begin flowing to the street in short order, and, of course, options expire on Friday of next week. Getting the picture yet?
The real kicker to the whole "rally" story is what happened to Family Dollar (FDO) after it released its earning report. Quarterly profit jumped 19%, but earnings guidance disappointed as the CEO said consumers remained wary. No surprise there, but the stock lost 8% on the day, down 3.18 to 36.26. And you thought retailers were doing well.
Dow 10,018.28, +274.66 (2.82%)
NASDAQ 2,159.47, +65.59 (3.13%)
S&P 500 1,060.27, +32.21 (3.13%)
NYSE Composite 6,685.78, +199.66 (3.08%)
Internals told a mixed story. Advancers eviscerated decliners, 5351-1212, but new lows led new highs, 205-121. Volume was at average levels for the second straight session, another indication that this was more a relief rally or a knee-jerk reaction to oversold conditions, or a combination with short-covering mixed in for good measure.
NASDAQ Volume 2,190,606,000
NYSE Volume 5,861,473,500
Crude oil for August delivery rose $2.06, after falling for six consecutive sessions, to $74.07. Gold snapped back to life, gaining $3.80, to $1,198.60, with silver adding 15 cents, to close at $17.98.
Considering that financial and energy stocks (including, notoriously, BP) - the two most beaten down groups over the past few weeks were the rally leaders, one shouldn't put too much trust in this one-day wonder rally, as it appears to be contain more bark than bite, more reflection than reality, and no fundamentally good reason to have happened at all except for a one-day dearth of economic reporting.
Wednesday, July 7, 2010
Tuesday, July 6, 2010
The Rally That Wasn't
Nothing like a three-day weekend to revitalize the spirits of bullish investors, thus, the markets opened in the US on a strongly positive note the day after Independence Day festivities expired.
The Dow rocketed ahead 172 points in early going, but the high of the day was reached just moments after ISM services were reported lower for June, down to 53.8, after a reading of 55.4 for May. The market's reaction to the economic data was the opposite of what one would have expected, but it was fleeting, with the markets beginning a serious day-long downturn less than an hour into the session.
By 2:00 pm all the of indices had given up their gains, with the NASDAQ trading in the red the rest of the way into the close. Stocks finished mixed, which, along with the strong open and sloppy finish, are tell-tale chart patterns of bear markets. Only a final push - likely the result of short-covering - kept the markets from ending the session fully in the red.
With nearly all of the economic data over the past three to four weeks being on the weak side, there's an abundance of anxiety over upcoming corporate earning reports, which are expected to be strong enough to pull stocks out of their prolonged slump, which has persisted since the start of May.
Alcoa (AA) will officially kick things off on Monday, July 12, but investors aren't currently inclined to play much of a waiting game. The consistent mood has been, "sell now, ask questions later," as stocks have been beset by doubt and uncertainty in global markets.
Dow 9,743.62, +57.14 (0.59%)
NASDAQ 2,093.88, +2.09 (0.10%)
S&P 500 1,028.06, +5.48 (0.54%)
NYSE Composite 6,486.12, +51.31 (0.80%)
While today's headline numbers look good on the surface, a peek beneath the hood reveals the extent of the damage. Declining issues outpaced advancers once again, 3626-2884. New lows continued to dominate new highs, 304-122. Volume was average.
NASDAQ Volume 2,170,274,250
NYSE Volume 5,480,022,000
Surely, some will take comfort in the fact that the string of seven consecutive days on the downside has been broken, though many more will point to the manner in which the streak was ended as being servile and cynical.
Commodities also evidenced signs of strain. Oil dipped to $71.98, down 16 cents, while gold fell another $12.60, at $1,194.80. Silver, perhaps as people appreciate how undervalued it has become in terms of gold, gained smartly, up 14 cents, to $17.83.
It's a short week for trading, but an important one, to see whether traders can hold it together until earnings reports come riding to the rescue. Even that's a dodgy proposition, with so much uncertainty in so many corners.
The Dow rocketed ahead 172 points in early going, but the high of the day was reached just moments after ISM services were reported lower for June, down to 53.8, after a reading of 55.4 for May. The market's reaction to the economic data was the opposite of what one would have expected, but it was fleeting, with the markets beginning a serious day-long downturn less than an hour into the session.
By 2:00 pm all the of indices had given up their gains, with the NASDAQ trading in the red the rest of the way into the close. Stocks finished mixed, which, along with the strong open and sloppy finish, are tell-tale chart patterns of bear markets. Only a final push - likely the result of short-covering - kept the markets from ending the session fully in the red.
With nearly all of the economic data over the past three to four weeks being on the weak side, there's an abundance of anxiety over upcoming corporate earning reports, which are expected to be strong enough to pull stocks out of their prolonged slump, which has persisted since the start of May.
Alcoa (AA) will officially kick things off on Monday, July 12, but investors aren't currently inclined to play much of a waiting game. The consistent mood has been, "sell now, ask questions later," as stocks have been beset by doubt and uncertainty in global markets.
Dow 9,743.62, +57.14 (0.59%)
NASDAQ 2,093.88, +2.09 (0.10%)
S&P 500 1,028.06, +5.48 (0.54%)
NYSE Composite 6,486.12, +51.31 (0.80%)
While today's headline numbers look good on the surface, a peek beneath the hood reveals the extent of the damage. Declining issues outpaced advancers once again, 3626-2884. New lows continued to dominate new highs, 304-122. Volume was average.
NASDAQ Volume 2,170,274,250
NYSE Volume 5,480,022,000
Surely, some will take comfort in the fact that the string of seven consecutive days on the downside has been broken, though many more will point to the manner in which the streak was ended as being servile and cynical.
Commodities also evidenced signs of strain. Oil dipped to $71.98, down 16 cents, while gold fell another $12.60, at $1,194.80. Silver, perhaps as people appreciate how undervalued it has become in terms of gold, gained smartly, up 14 cents, to $17.83.
It's a short week for trading, but an important one, to see whether traders can hold it together until earnings reports come riding to the rescue. Even that's a dodgy proposition, with so much uncertainty in so many corners.
Friday, July 2, 2010
No Conviction After Jobs Report
Although highly-anticipated, the June non-farm payroll report landed upon Wall Street with less than a thud, but hardly more than a whimper.
The BLS reported a loss of 125,000 jobs across America during the month, though the overwhelming bulk of the losses were temporary Census jobs - 225,000 in all - while the private sector gained a reported 85,000 new hires. The remainder - 15,000 - were attributed to added temporary positions in the private economy.
While that number was not as bad as feared, it still was not good enough to lift Wall Street's dour spirits. A half-hour into the trading session, another dose of reality struck, sending stocks to their lows of the day by 1:00 pm. May factory orders declined by 1.4%, reversing 9 straight months of gains. Full Report [PDF]
Stocks quietly ended one of the worst weeks in a year which has seen stock prices and indices improve significantly off the bottoms reached in March, 2009, but worries persist that the recovery has lost its footing and the global economy is beginning to drift back towards a prolonged period of either slow growth or another recession.
The major indices recovered during the afternoon, briefly registering positive numbers for the day, but a bout of late selling sent the Dow and other indices to their seventh straight down day and fresh closing lows. Each of the major averages have settled well below their 200-day moving averages, a definitive signal of a turn in fortune for the economy.
Dow 9,686.48, -46.05 (0.47%)
NASDAQ 2,091.79, -9.57 (0.46%)
S&P 500 1,022.58, -4.79 (0.47%)
NYSE Composite 6,434.81, -27.22 (0.42%)
Decliners beat down advancers once again, 3909-2534. New lows exceeded new highs for the fourth straight session, 248-95. Volume was extremely light, owing not only to an unwillingness to institute new positions, but also to the upcoming Independence Day holiday.
NASDAQ Volume 1,647,075,750
NYSE Volume 4,676,019,500
Commodities didn't fare much better. Crude oil continued its descent, losing 81 cents, to $72.14. Just a week ago, oil was approaching $80 per barrel, but the supply-demand scenario has worsened considerably. Also, many hedge funds operating in the commodities space have unwound positions in order to raise cash. It's a fearful trade.
Gold was about the only gainer, rising $1.10, to $1,207.40, but it wasn't much of a bounce off the dramatic pull-back midweek. Silver lost another six cents, settling at $17.70.
The three-day Independence Day holiday could not have come at a better moment for stock traders, who need to clear their heads and develop strategies for dealing with a resumption of the financial crisis which - in reality - is now closing in on three years running.
While there are still bulls a-plenty, the argument between those who see another recession and more optimistic appraisals of just slow growth are more compelling. Hardly anyone can discern a silver lining within the seas of red data that was dumped upon the markets over the past three weeks.
The next major hurdle will be corporate second quarter earnings, which begin in earnest right after the break. It's almost certain that there will be an inordinate share of hits and misses and surprises on both sides of the ledger.
Until then, remember what the 4th of July is really all about: Independence. For a people and a nation.
The BLS reported a loss of 125,000 jobs across America during the month, though the overwhelming bulk of the losses were temporary Census jobs - 225,000 in all - while the private sector gained a reported 85,000 new hires. The remainder - 15,000 - were attributed to added temporary positions in the private economy.
While that number was not as bad as feared, it still was not good enough to lift Wall Street's dour spirits. A half-hour into the trading session, another dose of reality struck, sending stocks to their lows of the day by 1:00 pm. May factory orders declined by 1.4%, reversing 9 straight months of gains. Full Report [PDF]
Stocks quietly ended one of the worst weeks in a year which has seen stock prices and indices improve significantly off the bottoms reached in March, 2009, but worries persist that the recovery has lost its footing and the global economy is beginning to drift back towards a prolonged period of either slow growth or another recession.
The major indices recovered during the afternoon, briefly registering positive numbers for the day, but a bout of late selling sent the Dow and other indices to their seventh straight down day and fresh closing lows. Each of the major averages have settled well below their 200-day moving averages, a definitive signal of a turn in fortune for the economy.
Dow 9,686.48, -46.05 (0.47%)
NASDAQ 2,091.79, -9.57 (0.46%)
S&P 500 1,022.58, -4.79 (0.47%)
NYSE Composite 6,434.81, -27.22 (0.42%)
Decliners beat down advancers once again, 3909-2534. New lows exceeded new highs for the fourth straight session, 248-95. Volume was extremely light, owing not only to an unwillingness to institute new positions, but also to the upcoming Independence Day holiday.
NASDAQ Volume 1,647,075,750
NYSE Volume 4,676,019,500
Commodities didn't fare much better. Crude oil continued its descent, losing 81 cents, to $72.14. Just a week ago, oil was approaching $80 per barrel, but the supply-demand scenario has worsened considerably. Also, many hedge funds operating in the commodities space have unwound positions in order to raise cash. It's a fearful trade.
Gold was about the only gainer, rising $1.10, to $1,207.40, but it wasn't much of a bounce off the dramatic pull-back midweek. Silver lost another six cents, settling at $17.70.
The three-day Independence Day holiday could not have come at a better moment for stock traders, who need to clear their heads and develop strategies for dealing with a resumption of the financial crisis which - in reality - is now closing in on three years running.
While there are still bulls a-plenty, the argument between those who see another recession and more optimistic appraisals of just slow growth are more compelling. Hardly anyone can discern a silver lining within the seas of red data that was dumped upon the markets over the past three weeks.
The next major hurdle will be corporate second quarter earnings, which begin in earnest right after the break. It's almost certain that there will be an inordinate share of hits and misses and surprises on both sides of the ledger.
Until then, remember what the 4th of July is really all about: Independence. For a people and a nation.
Thursday, July 1, 2010
ISM Data, Home Sales Rattle Markets: Deflation Clearly Evident
The relentless slide in the markets continued on Thursday as the series of data releases evidencing poor economic performance across the entire global swath of markets added even more dour numbers.
Prior to the opening bell, the government-affiliated PMI for China fell to 52.1 in June from 53.9 in May and 55.7 in April, and the HSBC China Manufacturing PMI fell to 50.4 in June from 52.7 in May. HSBC reports their figure the lowest in a year, even though readings over 50 do indicate expansion.
First time unemployment claims came in at 472,000, a rise above the prior week's revised reading of 459,000 new claimants.
Once markets were open for trading, matters turned even worse when the US ISM Index dropped to 52.6 in June from 59.7 in May and pending home sales registered a 30% decline month-over-month.
Revealing in the ISM data was the 20.5% decline in prices. Overall, production slipped 5.2% and new orders were off 7.2%.
Much of the decline in housing starts was credited to the end of the government's tax credit on home purchases in April, but the 30% decline was more than twice what was expected, sending the index to an all-time low of 77.6 from a reading of 110.9 in April. The index is also is 15.9% below the May 2009 figure.
Stocks plunged when that disastrous duo came off the news wires, with the Dow quickly plummeting to its intra-day low of 9,621.89, with other indices following the path lower.
Markets tore through all levels of support, but regained composure midday and closed with relatively minor losses.
But serious technical damage had been done this day, as in days past. Concern over the shaky health of the US economy continued to dog investors at every turn and tomorrow's release of non-farms payroll from June hasn't offered much hope, though many are wondering whether or not the market is seriously oversold and the impact of the employment data already factored into prices.
More than likely, that is not the case, but rather the market was guided by insiders on the short side of many trades, covering today and re-instituting positions in anticipation of a tepid report before the beginning of Friday's trade. while that may seem cynical to some, it's how the market has been running for some time. It's a big boy's game and small investors do not stand a chance.
Unless, by some miracle of accounting, the government shows 50,000 or more private sector jobs created over the month just past, the markets are on course for one of their worst weeks in quite some time.
Dow 9,732.53, -41.49 (0.42%)
NASDAQ 2,101.36, -7.88 (0.37%)
S&P 500 1,027.37, -3.34 (0.32%)
NYSE Composite 6,462.03, -7.62 (0.12%)
Giving more credence to the bearish camp, decliners outstripped advancers by an unhealthy margin, 4052-2496, and new lows ramped past new highs, 439-101, the third straight day in which the lows have buried the highs and the largest margin of the three. Volume was also very heavy, the best showing of the week.
NASDAQ Volume 2,678,066,750
NYSE Volume 7,533,900,500
Today's sudden decline caused liquidation and winding down of many trades, particularly in the highly-hedged commodity arena. Oil saw its worst price decline in at least three months, losing $2.68, to $72.95. Gold was completely devastated, dropping $39.00, to $1,206.30 and even further - below $1200 - after the NY close. Silver also disappointed, dropping 91 cents (4.88%), to $17.76. Prices for the precious metals fell to levels not seen in over a month.
Continued weakness in global markets continue to stir fears of widening deflationary trends, particularly worrisome to those who carry heavy debt burdens, such as almost all government entities, hedge funds, banks and other financial institutions.
Global deflation, begun in earnest in August 2007, continues to gain momentum and shake existing financial infrastruture.
Prior to the opening bell, the government-affiliated PMI for China fell to 52.1 in June from 53.9 in May and 55.7 in April, and the HSBC China Manufacturing PMI fell to 50.4 in June from 52.7 in May. HSBC reports their figure the lowest in a year, even though readings over 50 do indicate expansion.
First time unemployment claims came in at 472,000, a rise above the prior week's revised reading of 459,000 new claimants.
Once markets were open for trading, matters turned even worse when the US ISM Index dropped to 52.6 in June from 59.7 in May and pending home sales registered a 30% decline month-over-month.
Revealing in the ISM data was the 20.5% decline in prices. Overall, production slipped 5.2% and new orders were off 7.2%.
Much of the decline in housing starts was credited to the end of the government's tax credit on home purchases in April, but the 30% decline was more than twice what was expected, sending the index to an all-time low of 77.6 from a reading of 110.9 in April. The index is also is 15.9% below the May 2009 figure.
Stocks plunged when that disastrous duo came off the news wires, with the Dow quickly plummeting to its intra-day low of 9,621.89, with other indices following the path lower.
Markets tore through all levels of support, but regained composure midday and closed with relatively minor losses.
But serious technical damage had been done this day, as in days past. Concern over the shaky health of the US economy continued to dog investors at every turn and tomorrow's release of non-farms payroll from June hasn't offered much hope, though many are wondering whether or not the market is seriously oversold and the impact of the employment data already factored into prices.
More than likely, that is not the case, but rather the market was guided by insiders on the short side of many trades, covering today and re-instituting positions in anticipation of a tepid report before the beginning of Friday's trade. while that may seem cynical to some, it's how the market has been running for some time. It's a big boy's game and small investors do not stand a chance.
Unless, by some miracle of accounting, the government shows 50,000 or more private sector jobs created over the month just past, the markets are on course for one of their worst weeks in quite some time.
Dow 9,732.53, -41.49 (0.42%)
NASDAQ 2,101.36, -7.88 (0.37%)
S&P 500 1,027.37, -3.34 (0.32%)
NYSE Composite 6,462.03, -7.62 (0.12%)
Giving more credence to the bearish camp, decliners outstripped advancers by an unhealthy margin, 4052-2496, and new lows ramped past new highs, 439-101, the third straight day in which the lows have buried the highs and the largest margin of the three. Volume was also very heavy, the best showing of the week.
NASDAQ Volume 2,678,066,750
NYSE Volume 7,533,900,500
Today's sudden decline caused liquidation and winding down of many trades, particularly in the highly-hedged commodity arena. Oil saw its worst price decline in at least three months, losing $2.68, to $72.95. Gold was completely devastated, dropping $39.00, to $1,206.30 and even further - below $1200 - after the NY close. Silver also disappointed, dropping 91 cents (4.88%), to $17.76. Prices for the precious metals fell to levels not seen in over a month.
Continued weakness in global markets continue to stir fears of widening deflationary trends, particularly worrisome to those who carry heavy debt burdens, such as almost all government entities, hedge funds, banks and other financial institutions.
Global deflation, begun in earnest in August 2007, continues to gain momentum and shake existing financial infrastruture.
Wednesday, June 30, 2010
A Rush to the Exits at Quarter's End
On the final day of trading for the second quarter - the midpoint of the year - traders and investors took a look back on what has gone before and peered into an uncertain future.
By the end of the day, their assessment was clear: this is no time to be heavily invested in equities. Thus, in the final hour of trading, all of the major US indices took a severe turn to the downside finishing the day - and the quarter - with what turned from a trickle into a complete rout.
Stocks had held their own through most of the session, trading slightly above the unchanged mark for the most part, but, when it came down to concrete buying or selling decisions, everybody hit the sell button nearly simultaneously. A delay of a few moments could cost thousands, or even millions, of dollars, so once the trend was in place after 3:15 pm, the volume increased and near panic ensued. Only a serious effort in the final fifteen minutes - most likely by the PPT and some delighted short-sellers covering positions for the day - kept the markets from melting down completely.
Even as rescuers came to aid at the close, the Dow finished with a new closing low for the year, finally coming to rest on a number it hasn't seen since November 3, 2009, nearly 8 months ago.
The consensus opinion for the first half of 2010: Not so good. Prospects for the second half: Disturbingly downbeat. It's as though both the soprano and tenor each caught a cold nearing intermission of an opera.
Dow 9,774.02, -96.28 (0.98%)
NASDAQ 2,109.24, -25.94 (1.21%)
S&P 500 1,030.71, -10.53 (1.01%)
NYSE Composite 6,469.66, -50.43 (0.77%)
By day's end decliners buried advancers under the avalanche of late selling, 4127-2385. New lows smashed new highs by a margin nearly equal to yesterday's, 295-103. Volume, which had been on the light side most of the day, was so concentrated in the final hour that it ended up being just about normal, evan a bit on the heavy side.
NASDAQ Volume 2,212,934,750
NYSE Volume 5,968,454,500
For the second straight session, oil was down while gold was up, this time joined by silver prices, which increased eight cents, to $18.67. Gold managed a gain of $3.50, to close at $1,245.50, while oil slipped back another 61 cents, to $75.63, the lowest level in two weeks.
Weighing on the market - in addition to the world of woes already known - was the ADP Private Employment report for June, which showed a gain of just 13,000 jobs in the month, a number so tiny and so vile as to engender groans of pain from the trading floors.
The report comes two days prior to the highly-anticipated "official" government non-farm payroll report, which had already been expected to be less-than-cheery, but now, with the ADP report in hand, is likely to come in as a complete stinker, just what the markets and the American public don't need.
As for the first half of the year, stocks saw and end to the bear market rally that began in March of '09 and the beginnings of a second leg down, the bottom of which is anybody's guess. Some are calling for markets to sink even further than they did through Fall of 2008 and Winter of 2009, while the more optimistic believe this is only a correction.
The numbers bear neither side any witness, as they are stuck between correction (10%) and primary trend (20%). That stocks would be lower here and for the year as a whole would fall in line with the January barometer, which accurately presages direction about 80% of the time.
Since the end of 2009, the Dow is down 652 points. From it's high of 11,205 (April 26), the drop is a spectacular 1431 points, or -12.75%. The NASDAQ is down 160 points for the year and, from its high of 2530 (April 23) , the decline is 421 points (-16.64%). Everybody's favorite index, the S&P 500, is down a seemingly tame 85 points since the start of the year, but has given up 187 points from the April 23 high of 1217 (-15.37%).
The broadest measure of all, the NYSE Composite, is on the record for being down 414 points on the year, with a drop of 1260 from its high of 7729 on April 14, or a near-bear-market downturn of 16.30%.
With the two broadest gauges - the NASDAQ and NYSE Comp. - taking the biggest percentage hits over a span of a little more than two months, it's no stretch to say that the decline has been both broad and swift. The past two weeks have been particularly brutal. Since June 17, the indices have registered just one gain and eight losing sessions.
The worst of it is that the week isn't yet over, and the economic which carries the most weight, the June non-farm payroll report, won't make an appearance until Friday, though the expectation of a poor showing may already be factored into many trades.
By the end of the day, their assessment was clear: this is no time to be heavily invested in equities. Thus, in the final hour of trading, all of the major US indices took a severe turn to the downside finishing the day - and the quarter - with what turned from a trickle into a complete rout.
Stocks had held their own through most of the session, trading slightly above the unchanged mark for the most part, but, when it came down to concrete buying or selling decisions, everybody hit the sell button nearly simultaneously. A delay of a few moments could cost thousands, or even millions, of dollars, so once the trend was in place after 3:15 pm, the volume increased and near panic ensued. Only a serious effort in the final fifteen minutes - most likely by the PPT and some delighted short-sellers covering positions for the day - kept the markets from melting down completely.
Even as rescuers came to aid at the close, the Dow finished with a new closing low for the year, finally coming to rest on a number it hasn't seen since November 3, 2009, nearly 8 months ago.
The consensus opinion for the first half of 2010: Not so good. Prospects for the second half: Disturbingly downbeat. It's as though both the soprano and tenor each caught a cold nearing intermission of an opera.
Dow 9,774.02, -96.28 (0.98%)
NASDAQ 2,109.24, -25.94 (1.21%)
S&P 500 1,030.71, -10.53 (1.01%)
NYSE Composite 6,469.66, -50.43 (0.77%)
By day's end decliners buried advancers under the avalanche of late selling, 4127-2385. New lows smashed new highs by a margin nearly equal to yesterday's, 295-103. Volume, which had been on the light side most of the day, was so concentrated in the final hour that it ended up being just about normal, evan a bit on the heavy side.
NASDAQ Volume 2,212,934,750
NYSE Volume 5,968,454,500
For the second straight session, oil was down while gold was up, this time joined by silver prices, which increased eight cents, to $18.67. Gold managed a gain of $3.50, to close at $1,245.50, while oil slipped back another 61 cents, to $75.63, the lowest level in two weeks.
Weighing on the market - in addition to the world of woes already known - was the ADP Private Employment report for June, which showed a gain of just 13,000 jobs in the month, a number so tiny and so vile as to engender groans of pain from the trading floors.
The report comes two days prior to the highly-anticipated "official" government non-farm payroll report, which had already been expected to be less-than-cheery, but now, with the ADP report in hand, is likely to come in as a complete stinker, just what the markets and the American public don't need.
As for the first half of the year, stocks saw and end to the bear market rally that began in March of '09 and the beginnings of a second leg down, the bottom of which is anybody's guess. Some are calling for markets to sink even further than they did through Fall of 2008 and Winter of 2009, while the more optimistic believe this is only a correction.
The numbers bear neither side any witness, as they are stuck between correction (10%) and primary trend (20%). That stocks would be lower here and for the year as a whole would fall in line with the January barometer, which accurately presages direction about 80% of the time.
Since the end of 2009, the Dow is down 652 points. From it's high of 11,205 (April 26), the drop is a spectacular 1431 points, or -12.75%. The NASDAQ is down 160 points for the year and, from its high of 2530 (April 23) , the decline is 421 points (-16.64%). Everybody's favorite index, the S&P 500, is down a seemingly tame 85 points since the start of the year, but has given up 187 points from the April 23 high of 1217 (-15.37%).
The broadest measure of all, the NYSE Composite, is on the record for being down 414 points on the year, with a drop of 1260 from its high of 7729 on April 14, or a near-bear-market downturn of 16.30%.
With the two broadest gauges - the NASDAQ and NYSE Comp. - taking the biggest percentage hits over a span of a little more than two months, it's no stretch to say that the decline has been both broad and swift. The past two weeks have been particularly brutal. Since June 17, the indices have registered just one gain and eight losing sessions.
The worst of it is that the week isn't yet over, and the economic which carries the most weight, the June non-farm payroll report, won't make an appearance until Friday, though the expectation of a poor showing may already be factored into many trades.
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