It's absolutely amazing to anyone who's followed the markets for the past twenty years or more, how this current rally, based entirely on free money flowing from the Federal Reserve to the Primary Dealers, continues to defy the gravitational pull of low volume.
Just like the first two days of the week, Wednesday was full of nothing but hot air and the pretentious attitude that the US and the rest of the planet are in some kind of economic recovery and not being lifted by fumes, happy talk and a lack of market participants. This week should stand the test of time as the lowest volume week of at least the past 10 years.
Those few remaining players - the Primary Dealers, select hedge funds and some high-wealth individuals - managed to wring out even more gains as the Fed delivered the final POMO of the year, a mere $5.4 billion, though an amount adequate enough to lift this listless market significantly.
Dow 11,585.38, +9.84 (0.09%)
NASDAQ 2,666.93, +4.05 (0.15%)
S&P 500 1,259.78, +1.27 (0.10%)
NYSE Composite 7,961.48, +29.81 (0.38%)
Advancing issues swamped decliners, 3991-2544. NASDAQ new highs were at 120, with 15 stocks hitting new lows. On the NYSE, there were 189 new highs and just 16 new lows.
NASDAQ Volume 1,079,771,000
NYSE Volume 2,318,948,250
Commodities continued their path higher as well, as gold added another $4.70, to $1410.90 at this time, and silver gained 29 cents, eclipsing its previous 30-year high (Dec. 7, $30.50), now trading for $30.58 per ounce.
Crude oil for February delivery, the front-end contract on the NYMEX, took a 37-cent haircut, but is still dangerously high, at $91.12 per barrel.
We'll get unemployment claims before the opening bell on Thursday and no other data on Friday, the final trading day (and final day, period) of 2010, putting to rest a very painfully-slow post-holiday series of sessions.
One final note for the day. There's a duopoly that is just begging to be resolved. Short interest is at record lows while margin debt is at its highest level since the collapse of Lehman Bros. in 2008. Those two data sets cannot exist side-by-side for long without something breaking out somewhere.
Wednesday, December 29, 2010
Tuesday, December 28, 2010
With Stocks Stuck in Near-Neutral, Precious Metals Break Out
It's been a while since there was any excitement in the precious metals space - about a three weeks to be exact, when silver popped to a multi-year high at $30.50 and gold marked an all-time record high of $1420.00 on the London Fix. Both of those numbers were made on December 7th, and since then both have seen pull-backs in price, though nothing any serious gold bugs were losing sleep over.
Since then, talk of a gold bubble have been bandied about by the numbskull financial press, the case against JP Morgan and HSBC manipulating the silver market has expanded and stocks have done what they usually do in December, appreciate, though on close to record-low volume across the board.
With Christmas season over and stock pickers jubilant over what's being called the best holiday shopping season since 2007 (not that big a deal, since 2008 and 2009 were, by most accounts, stinkers) there may be a little bit of sanity re-emerging into the markets. Bond auctions in the EU and here in the USA have not fared particularly well, and a failed short-term government bond auction and a 25 basis point hike in China have put the fear of inflation squarely back on the table as holiday cheer and the cheering over retail stocks fades into the background.
Gold rocketed higher, up $21.30 on last check, to $1405.40, which, if it holds above $1403.50 until 5:00 ET, would be the third-highest closing price ever on the NYMEX, all recorded this month. Silver will finish with its second-highest close since the attempted cornering of the market by the infamous Hunt Brothers back in 1979-80 when it topped out at $54/ounce. Today's price is up $1.00, at $30.28, only the second time silver has closed over $30 per ounce in 30 years.
There's currently so much doubt and fear involved with trading stocks and bonds that investors, gamblers and speculators of all kind and size are bidding up the price of both gold and silver, which have traditionally performed best in times of uncertainty. To believe that sovereign economies are solvent and secure would be tantamount to believing that some mythical fat man in a red suit delivered all those nifty iPads and colorful sweaters a few days ago.
Nations are on the brink of economic collapse, and not just Greece and Spain, but larger ones such as the United States, France and Great Britain. Decades of mismanagement of government budgets have stretched the credibility of central banks and politicians to the point that smart money is moving away from the paper chase of currency and securities and back to the old standards of real money - gold and silver.
Today's moves in the precious metals may have been caused by some expiring options positions, though the past three weeks have witnessed more consolidation in the metals market than outright selling. The pullback from the December 7 highs has been brief and not particularly deep, with the move covering all of 5% in the gold price and roughly 7% in silver.
If anything is certain heading into the new year, it's that the global recovery or crisis (tke your pick) still has more to play out, and the main beneficiaries of uncertainty will be the precious metals, heading into the 10th year of an historic bull run.
Stocks and bonds will come and go, rise and fall as they always do, but the permanence of gold and silver appear to be headed for a bright and glorious future.
The day's action in the equities space was as usual: little movement, split indices and extremely thin volume. If not for the HFT computers pushing electrons around, US exchanges might as well have been closed the first two days of this week and probably won't look any better after the next three.
Dow 11,575.54, +20.51 (0.18%)
NASDAQ 2,662.88, -4.39 (0.16%)
S&P 500 1,258.51, +0.97 (0.08%)
NYSE Composite 7,931.67, +10.73 (0.14%)
Losing issues outpaced advancers for the session, 3505-2977, and there were more new highs than lows across both exchanges: 135-12 on the NASDAQ and 130-14 on the NYSE, a kind of reverse-Hindenburg indication. The volume figures should be starkly defeatist to any bulls.
NASDAQ Volume 1,144,227,750.00
NYSE Volume 2,461,884,250
A couple of key economic indicators shed some light on the US economy, which remains mired in the quicksand of bogus bailouts, high unemployment and moribund housing prices. The Case-Shiller 20-city index declined for the 4th consecutive month, making a residential housing double dip a fait accompli. Consumer confidence, as measured by the Conference Board, tumbled from 54.3 in November to 52.5 this month, a clear sign that, despite the howls of excitement over prospects for 2011 from the likes of Jim Cramer and Larry Kudlow, along with a roster of economic forecasters (charlatans) too numerous to mention, economic conditions in America continue to be just a hair's breadth from desperation.
Those wise enough to be already entrenched in niche markets, rarities, precious metals and arable acreage are sitting comfortably in the proverbial cat-bird's seat.
Since then, talk of a gold bubble have been bandied about by the numbskull financial press, the case against JP Morgan and HSBC manipulating the silver market has expanded and stocks have done what they usually do in December, appreciate, though on close to record-low volume across the board.
With Christmas season over and stock pickers jubilant over what's being called the best holiday shopping season since 2007 (not that big a deal, since 2008 and 2009 were, by most accounts, stinkers) there may be a little bit of sanity re-emerging into the markets. Bond auctions in the EU and here in the USA have not fared particularly well, and a failed short-term government bond auction and a 25 basis point hike in China have put the fear of inflation squarely back on the table as holiday cheer and the cheering over retail stocks fades into the background.
Gold rocketed higher, up $21.30 on last check, to $1405.40, which, if it holds above $1403.50 until 5:00 ET, would be the third-highest closing price ever on the NYMEX, all recorded this month. Silver will finish with its second-highest close since the attempted cornering of the market by the infamous Hunt Brothers back in 1979-80 when it topped out at $54/ounce. Today's price is up $1.00, at $30.28, only the second time silver has closed over $30 per ounce in 30 years.
There's currently so much doubt and fear involved with trading stocks and bonds that investors, gamblers and speculators of all kind and size are bidding up the price of both gold and silver, which have traditionally performed best in times of uncertainty. To believe that sovereign economies are solvent and secure would be tantamount to believing that some mythical fat man in a red suit delivered all those nifty iPads and colorful sweaters a few days ago.
Nations are on the brink of economic collapse, and not just Greece and Spain, but larger ones such as the United States, France and Great Britain. Decades of mismanagement of government budgets have stretched the credibility of central banks and politicians to the point that smart money is moving away from the paper chase of currency and securities and back to the old standards of real money - gold and silver.
Today's moves in the precious metals may have been caused by some expiring options positions, though the past three weeks have witnessed more consolidation in the metals market than outright selling. The pullback from the December 7 highs has been brief and not particularly deep, with the move covering all of 5% in the gold price and roughly 7% in silver.
If anything is certain heading into the new year, it's that the global recovery or crisis (tke your pick) still has more to play out, and the main beneficiaries of uncertainty will be the precious metals, heading into the 10th year of an historic bull run.
Stocks and bonds will come and go, rise and fall as they always do, but the permanence of gold and silver appear to be headed for a bright and glorious future.
The day's action in the equities space was as usual: little movement, split indices and extremely thin volume. If not for the HFT computers pushing electrons around, US exchanges might as well have been closed the first two days of this week and probably won't look any better after the next three.
Dow 11,575.54, +20.51 (0.18%)
NASDAQ 2,662.88, -4.39 (0.16%)
S&P 500 1,258.51, +0.97 (0.08%)
NYSE Composite 7,931.67, +10.73 (0.14%)
Losing issues outpaced advancers for the session, 3505-2977, and there were more new highs than lows across both exchanges: 135-12 on the NASDAQ and 130-14 on the NYSE, a kind of reverse-Hindenburg indication. The volume figures should be starkly defeatist to any bulls.
NASDAQ Volume 1,144,227,750.00
NYSE Volume 2,461,884,250
A couple of key economic indicators shed some light on the US economy, which remains mired in the quicksand of bogus bailouts, high unemployment and moribund housing prices. The Case-Shiller 20-city index declined for the 4th consecutive month, making a residential housing double dip a fait accompli. Consumer confidence, as measured by the Conference Board, tumbled from 54.3 in November to 52.5 this month, a clear sign that, despite the howls of excitement over prospects for 2011 from the likes of Jim Cramer and Larry Kudlow, along with a roster of economic forecasters (charlatans) too numerous to mention, economic conditions in America continue to be just a hair's breadth from desperation.
Those wise enough to be already entrenched in niche markets, rarities, precious metals and arable acreage are sitting comfortably in the proverbial cat-bird's seat.
Monday, December 27, 2010
Slogging Along Toward a 2011 Disaster
Just for kicks, here's the opening line to this post without benefit of having seen as much as a stock quote all day:
Stocks flat on low volume.
Let's see how we stack up:
Dow 11,555.03, -18.46 (0.16%)
NASDAQ 2,667.27, +1.67 (0.06%)
S&P 500 1,257.54, +0.77 (0.06%)
NYSE Composite 7,920.94, -4.42 (0.06%)
NASDAQ Volume 1,067,840,625
NYSE Volume 2,203,177,750
Well, prescient, no?
Amazingly, advancing issues swamped decliners, 3637-2817. On the NASDAQ, there were 147 new highs; 13 new lows. On the NYSE, there were 106 new highs, to just 13 new lows. Trading was exceedingly thin, the lowest volume of the year, due to a fierce snowstorm which kept many traders from reaching the floor of the NYSE and the time of year, which always has a negative effect on volume.
Crude oil dipped to $91.00, down 51 cents on the day. Gold bounced around, finally going down 20 cents, to $1384.20 as of this writing. Silver is currently up 7 cents, to $29.29.
There's really no good reason to bother with these thinly-traded equity markets. For much less risk one should be investing in precious metals or one's own business, where the rate of return should easily outperform stocks and/or bonds in good times and especially in bad ones. If one is a good business manager, there is boundless opportunity. Just spare the overhead, keep employees (if you even dare to hire one) to a minimum, work diligently and watch the bottom line.
Any business, unless one is in the wrong line of work or a completely illiquid market, should thrive without much interference from government. That seems to be the major trick - keeping the regulatory agencies and taxing authorities off your doorstep.
America was built on entrepreneurship, vision and perseverance, the last of which is probably the most important. Most businesses fail from lack of persistence in the face of what usually appears as various impediments to survival. In these sad days of the new century, Americans are beginning to suffer from lacks of education, nerve and business acumen. There may be no better time to bootstrap an organization from the ground up, as the politicians are too busy trying to save their jobs and the banking conglomerate is desperate.
With a little pluck and not much capital, Americans may find unique ways to free themselves from wage slavery, the scourge of the nation. All it takes is an idea, some grit, some spit and some attitude. Every household in America should double as home base for a business. It doesn't matter if the business thrives or loses money in the beginning, because the enormous tax benefits of hoe-based businesses will free up more of YOUR money, which the government takes up front in the form of payroll taxes.
Those still treading on the payroll train to nowhere would do well to file a DBA (Doing Business As) with their local county clerk and begin receiving the vast benefits proffered by the US tax code. There are no more home-business-friendly rules in the world.
Just as a hint - and I'm not going to give anyone the entire scope of why having a home-based business is a MUST in these times - start with the deduction from income on the costs of one room (the room which you dedicate to your business). If you live in a two-bedroom apartment with a kitchen, a bath, living and dining room, paying $500/month, making one of those two bedrooms an office - even if you make ZERO net income from your business - allows you to deduct 1/5 of your rent, or $1200 per year, from your gross income. Just this alone, if you're in a 28% tax bracket, will save you $336 in taxes, and that's just for starters.
Imagine if you actually made money from your business. Someday, you might find yourself not worrying about taxes at all, except to shield them from the government like big businesses do, and there are ways.
Wake up and grow up, Americans. The resources are there, the money is out there, what's lacking is the will.
Stocks flat on low volume.
Let's see how we stack up:
Dow 11,555.03, -18.46 (0.16%)
NASDAQ 2,667.27, +1.67 (0.06%)
S&P 500 1,257.54, +0.77 (0.06%)
NYSE Composite 7,920.94, -4.42 (0.06%)
NASDAQ Volume 1,067,840,625
NYSE Volume 2,203,177,750
Well, prescient, no?
Amazingly, advancing issues swamped decliners, 3637-2817. On the NASDAQ, there were 147 new highs; 13 new lows. On the NYSE, there were 106 new highs, to just 13 new lows. Trading was exceedingly thin, the lowest volume of the year, due to a fierce snowstorm which kept many traders from reaching the floor of the NYSE and the time of year, which always has a negative effect on volume.
Crude oil dipped to $91.00, down 51 cents on the day. Gold bounced around, finally going down 20 cents, to $1384.20 as of this writing. Silver is currently up 7 cents, to $29.29.
There's really no good reason to bother with these thinly-traded equity markets. For much less risk one should be investing in precious metals or one's own business, where the rate of return should easily outperform stocks and/or bonds in good times and especially in bad ones. If one is a good business manager, there is boundless opportunity. Just spare the overhead, keep employees (if you even dare to hire one) to a minimum, work diligently and watch the bottom line.
Any business, unless one is in the wrong line of work or a completely illiquid market, should thrive without much interference from government. That seems to be the major trick - keeping the regulatory agencies and taxing authorities off your doorstep.
America was built on entrepreneurship, vision and perseverance, the last of which is probably the most important. Most businesses fail from lack of persistence in the face of what usually appears as various impediments to survival. In these sad days of the new century, Americans are beginning to suffer from lacks of education, nerve and business acumen. There may be no better time to bootstrap an organization from the ground up, as the politicians are too busy trying to save their jobs and the banking conglomerate is desperate.
With a little pluck and not much capital, Americans may find unique ways to free themselves from wage slavery, the scourge of the nation. All it takes is an idea, some grit, some spit and some attitude. Every household in America should double as home base for a business. It doesn't matter if the business thrives or loses money in the beginning, because the enormous tax benefits of hoe-based businesses will free up more of YOUR money, which the government takes up front in the form of payroll taxes.
Those still treading on the payroll train to nowhere would do well to file a DBA (Doing Business As) with their local county clerk and begin receiving the vast benefits proffered by the US tax code. There are no more home-business-friendly rules in the world.
Just as a hint - and I'm not going to give anyone the entire scope of why having a home-based business is a MUST in these times - start with the deduction from income on the costs of one room (the room which you dedicate to your business). If you live in a two-bedroom apartment with a kitchen, a bath, living and dining room, paying $500/month, making one of those two bedrooms an office - even if you make ZERO net income from your business - allows you to deduct 1/5 of your rent, or $1200 per year, from your gross income. Just this alone, if you're in a 28% tax bracket, will save you $336 in taxes, and that's just for starters.
Imagine if you actually made money from your business. Someday, you might find yourself not worrying about taxes at all, except to shield them from the government like big businesses do, and there are ways.
Wake up and grow up, Americans. The resources are there, the money is out there, what's lacking is the will.
Thursday, December 23, 2010
Oil Surpasses $91/Barrel; Otherwise, a Whole Lotta Nothing
The major story today was in commodities, since equities were witness to the slowest trading day of the year. Oil spiked above $91/barrel as gold and silver slid, though not by much. A slew of mostly inconclusive economic data failed to move markets as traders peeled away for an early start to the holidays. US equity markets are closed on December 24.
Dow 11,573.49, +14.00 (0.12%)
NASDAQ 2,665.60, -5.88 (0.22%)
S&P 500 1,256.77, -2.07 (0.16%)
NYSE Composite 7,925.36, -6.40 (0.08%)
Decliners beat gainers, 3464-2990. The NASDAQ saw 127 new highs and 14 new lows. There were 146 new highs on the NYSE, to just 11 new lows.
NASDAQ Volume 1,272,585,375.00
NYSE Volume 2,831,742,000
February crude oil futures on the NYMEX spiked $1.03, to $91.51, just in time to raise gas prices on one of the busiest travel weekends of the winter. Gold fell $6.90, to $1,380.50, while silver shed 6 cents, to $29.33. If anything, the precious metals are screaming "buy, buy, buy" at the tops of their lungs. Gold, silver, platinum and palladium have stalled out at elevated levels and are consolidating.
In addition to oil over $90/barrel a death stroke for any kind of economic recovery, the precious metals once more appear to be in a very sweet spot, within percentage points of recent highs, and in the case of gold, an all-time high. They could explode to the upside without any advance notice from their current plateaus. If oil remains persistently above $90 per barrel, watch the PMs advance quickly.
That's all there is. Stocks are a fool's game and fools and their money are soon parted, as the old saw suggests. Gold, silver, arable land, collectibles and rarities and tools of trades are the only safe investments (yes, and canned foods).
Merry Christmas!
Dow 11,573.49, +14.00 (0.12%)
NASDAQ 2,665.60, -5.88 (0.22%)
S&P 500 1,256.77, -2.07 (0.16%)
NYSE Composite 7,925.36, -6.40 (0.08%)
Decliners beat gainers, 3464-2990. The NASDAQ saw 127 new highs and 14 new lows. There were 146 new highs on the NYSE, to just 11 new lows.
NASDAQ Volume 1,272,585,375.00
NYSE Volume 2,831,742,000
February crude oil futures on the NYMEX spiked $1.03, to $91.51, just in time to raise gas prices on one of the busiest travel weekends of the winter. Gold fell $6.90, to $1,380.50, while silver shed 6 cents, to $29.33. If anything, the precious metals are screaming "buy, buy, buy" at the tops of their lungs. Gold, silver, platinum and palladium have stalled out at elevated levels and are consolidating.
In addition to oil over $90/barrel a death stroke for any kind of economic recovery, the precious metals once more appear to be in a very sweet spot, within percentage points of recent highs, and in the case of gold, an all-time high. They could explode to the upside without any advance notice from their current plateaus. If oil remains persistently above $90 per barrel, watch the PMs advance quickly.
That's all there is. Stocks are a fool's game and fools and their money are soon parted, as the old saw suggests. Gold, silver, arable land, collectibles and rarities and tools of trades are the only safe investments (yes, and canned foods).
Merry Christmas!
Wednesday, December 22, 2010
Year-End Melt-Up Continues on Low Volume Trading
The monotony of the Fed's POMO-induced stock market rally must be, by now, be putting some investors into a zombie-like coma, wherein they go to their computers and mindlessly punch in more stocks to buy, at market prices. None of them perform any due diligence, glance at fundamentals or look for patterns in the technical charts.
Stock. Buy. Done. Rinse, repeat. Simple as that. There's no other explanation for the unprecedented rise in equities since the beginning of September, but more pronounced in the final month of the year, one which is normally not very volatile.
There are, of course, very few doing this zombie trading. Volume has backed off to some of the lowest levels of the year, in a year that has been branded as one of extremely low volume and interest. Yet, stocks still rise, and, as we mentioned yesterday, some of the biggest gainers are the financial stocks, for reasons still unexplained. The movement in the financial sector is truly from theatre of the absurd. Bank of America, for no apparent reason, gain a full 3% today, putting its December gain at a whopping 18%. That's extraordinary for a company which still has loads of non-performing mortgage loans on its books (somewhere, we're sure of it) and needed $45 billion in TARP money from the government just to stay alive just a year-and-a-half ago.
Dow 11,559.49, +26.33 (0.23%)
NASDAQ 2,671.48, +3.87 (0.15%)
S&P 500 1,258.84, +4.24 (0.34%)
NYSE Composite 7,931.76, +25.66 (0.32%)
Advancing issues led decliners by a wide margin for the second straight session, 3777-2739. NASDAQ new highs stood at 210, to a mere 25 new lows. On the NYSE, there were 215 new highs, 15 new lows. Those daily new high-low figures have been remarkably similar for the better part of the month, and for good reason. Traders (or computers running arb algos) have ramped in and out of the same stocks for the past few weeks and they have been primary contributors to the upside, which also explains how the indices rise on such paltry volume.
NASDAQ Volume 1,627,216,375.00
NYSE Volume 3,900,822,250
Commodity markets were moribund, with the exception of oil, rolling into the February contract up another 66 cents on the day, to $90.48. The pricing in oil is absolutely sick, running $20-30 over normalized pricing due to rampant, unchecked speculation. The attendant rise in the price of home heating oil and gasoline are nothing other than outright theft of American dollars by the oil cartel, comprised not of OPEC nations, but rather gigantic conglomerates, BP, ExxonMobil, Chevron and Royal Dutch Shell.
Gold spent most of the day straddling the flat line, currently down 60 cents, to $1384.90. So too, silver, 15 cents lower, at $29.22.
With just six trading days remaining in 2010 (Markets are closed December 24, but open for a full session on December 31), it appears certain that all of the major indices will end with sizable upside of at least 10% (Dow) and closer to 15% or more on the NASDAQ and S&P 500.
Stock. Buy. Done. Rinse, repeat. Simple as that. There's no other explanation for the unprecedented rise in equities since the beginning of September, but more pronounced in the final month of the year, one which is normally not very volatile.
There are, of course, very few doing this zombie trading. Volume has backed off to some of the lowest levels of the year, in a year that has been branded as one of extremely low volume and interest. Yet, stocks still rise, and, as we mentioned yesterday, some of the biggest gainers are the financial stocks, for reasons still unexplained. The movement in the financial sector is truly from theatre of the absurd. Bank of America, for no apparent reason, gain a full 3% today, putting its December gain at a whopping 18%. That's extraordinary for a company which still has loads of non-performing mortgage loans on its books (somewhere, we're sure of it) and needed $45 billion in TARP money from the government just to stay alive just a year-and-a-half ago.
Dow 11,559.49, +26.33 (0.23%)
NASDAQ 2,671.48, +3.87 (0.15%)
S&P 500 1,258.84, +4.24 (0.34%)
NYSE Composite 7,931.76, +25.66 (0.32%)
Advancing issues led decliners by a wide margin for the second straight session, 3777-2739. NASDAQ new highs stood at 210, to a mere 25 new lows. On the NYSE, there were 215 new highs, 15 new lows. Those daily new high-low figures have been remarkably similar for the better part of the month, and for good reason. Traders (or computers running arb algos) have ramped in and out of the same stocks for the past few weeks and they have been primary contributors to the upside, which also explains how the indices rise on such paltry volume.
NASDAQ Volume 1,627,216,375.00
NYSE Volume 3,900,822,250
Commodity markets were moribund, with the exception of oil, rolling into the February contract up another 66 cents on the day, to $90.48. The pricing in oil is absolutely sick, running $20-30 over normalized pricing due to rampant, unchecked speculation. The attendant rise in the price of home heating oil and gasoline are nothing other than outright theft of American dollars by the oil cartel, comprised not of OPEC nations, but rather gigantic conglomerates, BP, ExxonMobil, Chevron and Royal Dutch Shell.
Gold spent most of the day straddling the flat line, currently down 60 cents, to $1384.90. So too, silver, 15 cents lower, at $29.22.
With just six trading days remaining in 2010 (Markets are closed December 24, but open for a full session on December 31), it appears certain that all of the major indices will end with sizable upside of at least 10% (Dow) and closer to 15% or more on the NASDAQ and S&P 500.
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