Thankfully, Tuesday is almost over with and there haven't been any grave disasters, though the ones that have been hovering over the globe for the past few weeks are still far from resolved.
It seems to make some sense that markets would just wallow around until the damaged nuclear reactors in Japan are finally shut down, whenever that may happen, Colonel Qadaffi is defeated or found dead in Libya and the level of unrest settles down in various countries in Northern Africa and the Middle East.
That's exactly what went on today. There seemed to be no reason to either buy or sell equities and the major indices traded in narrow ranges all session long.
Naturally, conditions in the hot spots around the world could get better or worse, and nobody is really sure of anything at this juncture, especially when officials in Japan continue to stage a weird kind of kabuki theater in the way they report the situation at the damaged Fukushima nuclear plant, where four reactors have experienced some kind of explosion, accident, fire or other condition as an indirect result of the 9.0 earthquake that rattled the island nation on March 11.
That the reactors are spewing radioactive gasses and material is not disputed, but how much of which particular isotopes are going where and when has not been even remotely reported. All we know is that the radiation levels are higher than they were a week ago in various areas around the site and that the spread has become nearly global in nature, though slight in terms of actual threats to human health.
That's not really very reassuring since the problems persist and any increased exposure to any kind of radiation is potentially a health hazard.
Meanwhile, the US response, in conjunction with a bevy of nations, to the blood-letting in Libya has been met with considerable criticism and even our own representatives are speaking in tongues, with the president, congress and the military all putting out their own spin, none of it making a whole lot of sense.
More than likely, these issues will remain in some kind of focus for the coming weeks, if not months, and there will be other unexpected events in the interim. The best advice would be to expect the unexpected at this juncture, because nothing is for certain and situations are still, as they say, fluid.
Dow 12,018.63, -17.90 (0.15%)
NASDAQ 2,683.87, -8.22 (0.31%)
S&P 500 1,293.77, -4.61 (0.36%)
NYSE Composite 8,228.41, -27.95 (0.34%)
Declining issues dominated winners, 3743-2718. There were 72 new highs and 33 new lows on the NASDAQ; on the NYSE 109 new highs and just 8 new lows. Volume was miserably low. This was, if not the slowest trading day of the year, among the three or four worst. There's simply too much event risk associated to equities in the current cycle.
NASDAQ Volume 1,671,905,000
NYSE Volume 3,995,960,500
Oil finished at an even $104.00, up another $1.67 due to unresolved Middle East issues. Gold managed a squeeze out a gain of $2.30, closing at $1,427.60 in New York, within 1% of its all-time high. Silver gained nicely, adding 27 cents per ounce, to $36.27, the third-highest point in the last 31 years and just pennies away from the nominal high of $36.60, reached just two weeks ago, on March 7.
The longer it takes for Japan's nuclear reactor problems to be resolved, the longer stocks will remain bogged down, stuck in a range between the highs of February 18 and recent lows. Radiation leaks and potential melt-downs are nothing to joke about, and the condition of those plants is such that it could easily become a much more severe problem before it is eventually resolved.
There's already a panic quietly building world-wide, even though the reported radiation levels have been in an "acceptable" range. However, the longer the reactors leak radiation, the lower the tolerance of acceptance becomes. That situation remains highly volatile and potentially upsetting on a global basis, not only to investors but to the health of people.
Tuesday, March 22, 2011
Monday, March 21, 2011
Meltdown in Japan, Melt-up in US Stocks
Absurdity has found a new home: the US equity markets.
Somebody wake me up when the nightmare is over, because I cannot find any good reason to buy stocks right now, so, I must be dreaming.
War planes fly over Libya and Israeli jets take out a Hammas stronghold in Gaza. So, that's the good news, right? R-r-r-r-i-g-h-t. The Japanese government is lying to its people about radioactivity levels. That must be the bad news. And AT&T is going to gobble up T-Mobile, so we'll have one fewer cell phone provider. Does anyone recall the day that AT&T was broken up because its business constituted a monopoly?
Don't worry, the hologram of Eric Holder will do nothing. Anti-trust? In trust we trust, I guess.
The following numbers mean nothing. It's all just a paper moon.
Dow 12,036.53, +178.01 (1.50%)
NASDAQ 2,692.09, +48.42 (1.83%)
S&P 500 1,298.38, +19.18 (1.50%)
NYSE Composite 8,256.36, +139.96 (1.72%)
Advancing issues absolutely slaughtered decliners, 5182-1379. Stocks shot up at the open and stayed afloat all day. NASDAQ registered 90 new highs and 30 new lows. The NYSE had 129 new highs and just 9 new lows. Pathetic. Volume was in an abyss, especially on the NASDAQ.
NASDAQ Volume 1,766,817,250
NYSE Volume 5,027,389,500
WTI hit $102.33 a barrel on the NYMEX, up $1.26 on the day. Gold soared $10.30, to $1,426.40. Silver was up 94 cents to an even $36.00. Both are approaching recent multi-year or record highs. But everything is just fine. Notice how the news media shifted focus away from Japan and towards Libya. Well, guns and rockets and missiles launched from warships is much more entertaining than those invisible radioactive isotopes being spewed continuously into the air and the sea in Japan. So, bang, bang, bang. It's good TV.
We have entered an age in our culture in which nothing really makes much sense any more. Spend $200,000 for your kid's education so he or she can get a $35,000 a year job and have to pay back a mountain of debt. Blow up a country for its oil. Don't report on uncontrolled radioactivity that will kill thousands, maybe hundreds of thousands, maybe more. Buy stocks because some broker who knows less about economics and money than you do told you it was a good deal. Sit back and relax, watch TV. This is March Madness, after all, and we're not talking basketball.
BTW: According to the Supreme Court, the Fed will have to release documents relating to loans taken out by banks from the discount window in April and May, 2008, before the stock market crash.
They knew. But they wouldn't tell you.
Somebody wake me up when the nightmare is over, because I cannot find any good reason to buy stocks right now, so, I must be dreaming.
War planes fly over Libya and Israeli jets take out a Hammas stronghold in Gaza. So, that's the good news, right? R-r-r-r-i-g-h-t. The Japanese government is lying to its people about radioactivity levels. That must be the bad news. And AT&T is going to gobble up T-Mobile, so we'll have one fewer cell phone provider. Does anyone recall the day that AT&T was broken up because its business constituted a monopoly?
Don't worry, the hologram of Eric Holder will do nothing. Anti-trust? In trust we trust, I guess.
The following numbers mean nothing. It's all just a paper moon.
Dow 12,036.53, +178.01 (1.50%)
NASDAQ 2,692.09, +48.42 (1.83%)
S&P 500 1,298.38, +19.18 (1.50%)
NYSE Composite 8,256.36, +139.96 (1.72%)
Advancing issues absolutely slaughtered decliners, 5182-1379. Stocks shot up at the open and stayed afloat all day. NASDAQ registered 90 new highs and 30 new lows. The NYSE had 129 new highs and just 9 new lows. Pathetic. Volume was in an abyss, especially on the NASDAQ.
NASDAQ Volume 1,766,817,250
NYSE Volume 5,027,389,500
WTI hit $102.33 a barrel on the NYMEX, up $1.26 on the day. Gold soared $10.30, to $1,426.40. Silver was up 94 cents to an even $36.00. Both are approaching recent multi-year or record highs. But everything is just fine. Notice how the news media shifted focus away from Japan and towards Libya. Well, guns and rockets and missiles launched from warships is much more entertaining than those invisible radioactive isotopes being spewed continuously into the air and the sea in Japan. So, bang, bang, bang. It's good TV.
We have entered an age in our culture in which nothing really makes much sense any more. Spend $200,000 for your kid's education so he or she can get a $35,000 a year job and have to pay back a mountain of debt. Blow up a country for its oil. Don't report on uncontrolled radioactivity that will kill thousands, maybe hundreds of thousands, maybe more. Buy stocks because some broker who knows less about economics and money than you do told you it was a good deal. Sit back and relax, watch TV. This is March Madness, after all, and we're not talking basketball.
BTW: According to the Supreme Court, the Fed will have to release documents relating to loans taken out by banks from the discount window in April and May, 2008, before the stock market crash.
They knew. But they wouldn't tell you.
Friday, March 18, 2011
Rally Fades Into Close; Wall Street is Full of Bull
A momentous gap up open - all part of the arbitrage plan for scraping money on quadruple options expiration - finished the rally which began on Thursday, as usual, based upon nothing but "sentiment" and, of course, those computer algos which buy, buy, buy.
As stated here the past two days, any rallies under the current climate will be sharp and short-lived. Consider this one over, as the rally faded by half into the close.
Cheerleading CNBC was flashing a "best two-day Dow rally since December" headline, which is somewhat sad in a journalistic sense, since the NASDAQ was down nearly 4% for the week and the Dow and S&P finished the week with losses in the 1.5% area.
Dow 11,858.52, +83.93 (0.71%)
NASDAQ 2,643.67, +7.62 (0.29%)
S&P 500 1,279.20, +5.48 (0.43%)
NYSE Composite 8,116.40, +51.54 (0.64%)
Advancing issues defeated decliners, 4575-1915. NASDAQ new highs: 49; new lows: 42. That snaps a six day winning streak for new lows. On the NYSE, new highs beat new lows, 49-17. That means new highs have been better than new lows 4 of the past 7 days. Volume was particularly high today, due in large part to options expiration.
NASDAQ Volume 2,652,983,000
NYSE Volume 5,778,696,000
Crude oil fell 35 cents on the NYMEX, to $101.07, now that the UN has offered to stop the indiscriminate killing of his own people by forces loyal to president and lunatic-in-chief, Khadaffi.
Gold got back on track, gaining $11.90, to $1,416.10. Silver caught a bid as well, up 80 cents, to $35.06.
Expect more volatility until the conditions on the ground at Japan's disabled nuclear facility is either better explained by Japanese authorities or the situation somehow settled. It is still a very dangerous overhang to all risk assets, which is why gold, silver and goods are still safe bets.
As stated here the past two days, any rallies under the current climate will be sharp and short-lived. Consider this one over, as the rally faded by half into the close.
Cheerleading CNBC was flashing a "best two-day Dow rally since December" headline, which is somewhat sad in a journalistic sense, since the NASDAQ was down nearly 4% for the week and the Dow and S&P finished the week with losses in the 1.5% area.
Dow 11,858.52, +83.93 (0.71%)
NASDAQ 2,643.67, +7.62 (0.29%)
S&P 500 1,279.20, +5.48 (0.43%)
NYSE Composite 8,116.40, +51.54 (0.64%)
Advancing issues defeated decliners, 4575-1915. NASDAQ new highs: 49; new lows: 42. That snaps a six day winning streak for new lows. On the NYSE, new highs beat new lows, 49-17. That means new highs have been better than new lows 4 of the past 7 days. Volume was particularly high today, due in large part to options expiration.
NASDAQ Volume 2,652,983,000
NYSE Volume 5,778,696,000
Crude oil fell 35 cents on the NYMEX, to $101.07, now that the UN has offered to stop the indiscriminate killing of his own people by forces loyal to president and lunatic-in-chief, Khadaffi.
Gold got back on track, gaining $11.90, to $1,416.10. Silver caught a bid as well, up 80 cents, to $35.06.
Expect more volatility until the conditions on the ground at Japan's disabled nuclear facility is either better explained by Japanese authorities or the situation somehow settled. It is still a very dangerous overhang to all risk assets, which is why gold, silver and goods are still safe bets.
Thursday, March 17, 2011
The Expected Snap-Back Rally Occurs Right on Time
As mentioned in this space yesterday,
Well, today was it. If there's one thing the self-appointed Masters of the Universe on Wall Street and in Washington absolutely cannot tolerate, it is human events spinning beyond their ability to control them, because their power declines under such circumstances, and their sole response is to turn up the algos on their stock-buying computers and send equity prices ever further into the stratosphere of the absurd.
Today's mammoth run-up was well conceived and not derailed by any further bad news coming out of Japan, though what to do about those rebellious peasants in the Middle East still remains a problem for our sweet, elite masters. For a microcosmic view of it all, note how stocks and oil advanced smartly, with gold lagging and silver falling even more.
The elitist snobs will tolerate gold, even hoard it in times of panic, but they hate silver, because if gold is the metal of kings and monarchs, silver is the coin of gentlemen and lower rabble. The great wazoos and muckety-mucks will have nothing to do with it, which is why it continues to be supressed at every opportunity, by now, an open secret.
We'll maintain that silver is still the best investment for the current condition, despite its wild swings. Eventually, as we saw in the latter half of 2010, it will stay with and surpass gold in percentage gain.
In the meantime, the Bank of Japan (BOJ) will meet with their effete counterparts in the G7 to receive approval for intervention in their rapidly-appreciating currency. In other words, with money inflows to Japan, the Yen is becoming stronger, making more capital available for eventual reconstruction efforts, while at the same time boosting the price of its exports, which is considered a negative for the globalist agenda. The Bank of Japan will seek to buy up Yen, squeezing some of the liquidity out of it and stabilizing it against other floating currencies.
It's a bit of a complex condition, causing money flow disruptions and imbalances. In the meantime, the US dollar continues to depreciate, falling to a 4-month low, dipping just below the 76 mark at 75.995 on the dollar index.
Dow 11,774.59, +161.29 (1.39%)
NASDAQ 2,636.05, +19.23 (0.73%)
S&P 500 1,273.72, +16.84 (1.34%)
NYSE Composite 8,064.86, +134.99 (1.70%)
Despite the big headline numbers, the internals were less convincing that today's rally was anything more than money-tossing, as advancing issues beat decliners, 4438-2072, though new lows retained their edge over new highs on the NASDAQ, 56-35, for the sixth consecutive session. On the NYSE, it was nearly a dead heat, with 30 new highs and 28 new lows. Over the past six session, the advantage has gone to either side an equal three times apiece.
Volume was once-again telling. Though it was slightly elevated, it by no means was in a range indicative of an all-in rally. As mentioned previously, these kinds of things are normally sharp and short, especially in the light of tomorrow's quadruple witching day for options. There was plenty of arbitrage to go around for the sharpies.
NASDAQ Volume 2,011,827,250.00
NYSE Volume 4,743,120,500
Renewed tensions in the Middle East (and, no doubt, the insatiable urge to screw motorists with high gas prices) caused a run-up in crude, which elevated $3.42, to $101.42, on the NYMEX.
Gold gathered some momentum, gaining $8.10, to $1,404.20, but silver shed 21 cents, to $34.26, a price still close to recent 31-year highs.
With all the focus on the nuclear crisis in Japan, some revealing economic figures were released over the past two days. The PPI was up a whopping 1.6% in February, with the CPI chiming in with a gain of 0.5%. Inflation, that thing Ben Bernanke says is under control, temporary and not a problem (well, maybe not for him), isn't on its way here, it has arrived.
New housing starts were at some horrible four-decade low, with building proceeding at an annualized rate of 479,000 units. Industrial production fell 0.1% in February and capacity utilization dropped to 76.3% These kinds of numbers really gives one confidence that the liars in Washington have once again dropped the ball on the economy, all along telling us that we're "recovering."
In the wild new world normal, "recovery" is tantamount to Charlie Sheen's "winning" - an innocuous word, significant of absolutely nothing.
A decline in US stock markets will only trigger more printing, more inflation and an even more unbalanced global economy, one that was already teetering on the brink of disaster, even before the Japan debacle. However, such an inordinate infusion of capital may cause a snapback rally at any time. If such occurs, it will be easy to spot, as it will be sharp and large. The other characteristic of such an event is that it will have a relatively short duration - an afternoon, a day, a session and part of another, at most.
Well, today was it. If there's one thing the self-appointed Masters of the Universe on Wall Street and in Washington absolutely cannot tolerate, it is human events spinning beyond their ability to control them, because their power declines under such circumstances, and their sole response is to turn up the algos on their stock-buying computers and send equity prices ever further into the stratosphere of the absurd.
Today's mammoth run-up was well conceived and not derailed by any further bad news coming out of Japan, though what to do about those rebellious peasants in the Middle East still remains a problem for our sweet, elite masters. For a microcosmic view of it all, note how stocks and oil advanced smartly, with gold lagging and silver falling even more.
The elitist snobs will tolerate gold, even hoard it in times of panic, but they hate silver, because if gold is the metal of kings and monarchs, silver is the coin of gentlemen and lower rabble. The great wazoos and muckety-mucks will have nothing to do with it, which is why it continues to be supressed at every opportunity, by now, an open secret.
We'll maintain that silver is still the best investment for the current condition, despite its wild swings. Eventually, as we saw in the latter half of 2010, it will stay with and surpass gold in percentage gain.
In the meantime, the Bank of Japan (BOJ) will meet with their effete counterparts in the G7 to receive approval for intervention in their rapidly-appreciating currency. In other words, with money inflows to Japan, the Yen is becoming stronger, making more capital available for eventual reconstruction efforts, while at the same time boosting the price of its exports, which is considered a negative for the globalist agenda. The Bank of Japan will seek to buy up Yen, squeezing some of the liquidity out of it and stabilizing it against other floating currencies.
It's a bit of a complex condition, causing money flow disruptions and imbalances. In the meantime, the US dollar continues to depreciate, falling to a 4-month low, dipping just below the 76 mark at 75.995 on the dollar index.
Dow 11,774.59, +161.29 (1.39%)
NASDAQ 2,636.05, +19.23 (0.73%)
S&P 500 1,273.72, +16.84 (1.34%)
NYSE Composite 8,064.86, +134.99 (1.70%)
Despite the big headline numbers, the internals were less convincing that today's rally was anything more than money-tossing, as advancing issues beat decliners, 4438-2072, though new lows retained their edge over new highs on the NASDAQ, 56-35, for the sixth consecutive session. On the NYSE, it was nearly a dead heat, with 30 new highs and 28 new lows. Over the past six session, the advantage has gone to either side an equal three times apiece.
Volume was once-again telling. Though it was slightly elevated, it by no means was in a range indicative of an all-in rally. As mentioned previously, these kinds of things are normally sharp and short, especially in the light of tomorrow's quadruple witching day for options. There was plenty of arbitrage to go around for the sharpies.
NASDAQ Volume 2,011,827,250.00
NYSE Volume 4,743,120,500
Renewed tensions in the Middle East (and, no doubt, the insatiable urge to screw motorists with high gas prices) caused a run-up in crude, which elevated $3.42, to $101.42, on the NYMEX.
Gold gathered some momentum, gaining $8.10, to $1,404.20, but silver shed 21 cents, to $34.26, a price still close to recent 31-year highs.
With all the focus on the nuclear crisis in Japan, some revealing economic figures were released over the past two days. The PPI was up a whopping 1.6% in February, with the CPI chiming in with a gain of 0.5%. Inflation, that thing Ben Bernanke says is under control, temporary and not a problem (well, maybe not for him), isn't on its way here, it has arrived.
New housing starts were at some horrible four-decade low, with building proceeding at an annualized rate of 479,000 units. Industrial production fell 0.1% in February and capacity utilization dropped to 76.3% These kinds of numbers really gives one confidence that the liars in Washington have once again dropped the ball on the economy, all along telling us that we're "recovering."
In the wild new world normal, "recovery" is tantamount to Charlie Sheen's "winning" - an innocuous word, significant of absolutely nothing.
Wednesday, March 16, 2011
Fear Trumps Greed for a Day
As has been reported here over the past couple of days especially and for the better part of the past month, US stocks are heading lower.
Today's action was in stark contrast to the dip and rally from Tuesday, as news coming out of Japan just continues to worsen, as most thinking people assumed it would. Without going into the gory details, it appears that the nuclear plant that has been a problem since Friday's earthquake/tsunami is headed toward at least partial meltdown and at worst total meltdown.
Making matters even more horrifying is that there are six reactors at the site. Up until now, only four of the six reactors at the Fukushima Daiichi site have been affected, with all four of them spewing radioactive material at some time or another over the past five days, though it now appears that reactors #5 and #6 are at risk as well.
Information from the site has been sketchy at times, contradictory at others, but confusing and increasingly worse all along. It appears that the Japanese people are in for a long period of pain and suffering, and the implications are likely to be felt worldwide.
On Wall Street, where bulls ignore the obvious and bears hope against the worst, but bet on it, stocks were down in the early going until just before 11:00 am EDT, when news came, via a government official, that the situation at the plant had worsened considerably. That sent stocks into an absolute tailspin, with a full 1% decline within minutes of the news.
A rally was attempted when stocks hit their lows of the day at 2:00 pm, but it sputtered badly and the markets stared grimly at one of the largest one-day losses of the past two years.
Dow 11,613.30, -242.12 (2.04%)
NASDAQ 2,616.82, -50.51 (1.89%)
S&P 500 1,256.88, -24.99 (1.95%)
NYSE Composite 7,929.87, -162.24 (2.00%)
Confirming the carnage suggested by the headline numbers, declining issues battered advancers, 4889-1704. It's amazing it wasn't even more lopsided. Our leading current indicator has finally offered confirmation of a directional trend. New highs on the NASDAQ numbered 31, new lows, 74. On the NYSE, 31 new highs and 38 new lows. That makes five straight days on the NASDAQ that new lows have outnumbered new highs and three out of five on the NYSE.
If anyone's been waiting for indicators to flash red with sirens blaring, today was it. Japan's woes will continue to dominate the news for the foreseeable future and the associated supply chain issues of a globalized economy are beginning to come to light. Shipments of crucial parts are going to be delayed or stopped, trade will suffer and a large chunk of the world's third largest economy is going off-line for a while. Whether that is going to be weeks or months or years is still unknown, but the betting is that disruptions will extend through at least the end of the summer.
Another tell-tale sign that today was a day of capitulation by the bulls in US stocks was told by the off-the-charts volume in today's trading. It was the largest volume day of 2011 and may still be dwarfed by the eventual follow-on decline. One caveat is that the Fed continues its abuse of the US dollar by printing more of them at every opportunity. A decline in US stock markets will only trigger more printing, more inflation and an even more unbalanced global economy, one that was already teetering on the brink of disaster, even before the Japan debacle. However, such an inordinate infusion of capital may cause a snapback rally at any time. If such occurs, it will be easy to spot, as it will be sharp and large. The other characteristic of such an event is that it will have a relatively short duration - an afternoon, a day, a session and part of another, at most.
NASDAQ Volume 2,596,625,000
NYSE Volume 6,569,946,500
Commodities caught some bids, as sellers of equities rushed to less-risky assets. Oil was up 80 cents, to $97.98 as conditions in the Middle East continue to rage on, unsettled. Gold gained $3.30, to $1,396.10, and silver was up 36 cents, to $34.47. The move in precious metals is particularly interesting as it is a break-away from equities. Tuesday, all assets fell in a rush to liquidity. Today, the players were placing bets: for precious metals and other valuable commodities and against stocks and currencies.
Since there is no quick fix to nuclear accidents, especially those being mentioned alongside Chernobyl - the worst ever - don't expect the plant in question in Japan to be repaired for some time, if ever. Officials are only now poring over whether to entomb the reactors with heavy doses of cement or continue containment efforts, which are not working very well at present.
At this point, any intelligent human should take advantage of the short-term decline in the precious metals, but also maintain a large sum of cash, outside of any investments. In a declining, deflationary event, which may be occurring at this very moment, cash will be king. In a complete rout of economy, society and civility, gold and silver will reign supreme. Both situations have great potential at the current time.
Today's action was in stark contrast to the dip and rally from Tuesday, as news coming out of Japan just continues to worsen, as most thinking people assumed it would. Without going into the gory details, it appears that the nuclear plant that has been a problem since Friday's earthquake/tsunami is headed toward at least partial meltdown and at worst total meltdown.
Making matters even more horrifying is that there are six reactors at the site. Up until now, only four of the six reactors at the Fukushima Daiichi site have been affected, with all four of them spewing radioactive material at some time or another over the past five days, though it now appears that reactors #5 and #6 are at risk as well.
Information from the site has been sketchy at times, contradictory at others, but confusing and increasingly worse all along. It appears that the Japanese people are in for a long period of pain and suffering, and the implications are likely to be felt worldwide.
On Wall Street, where bulls ignore the obvious and bears hope against the worst, but bet on it, stocks were down in the early going until just before 11:00 am EDT, when news came, via a government official, that the situation at the plant had worsened considerably. That sent stocks into an absolute tailspin, with a full 1% decline within minutes of the news.
A rally was attempted when stocks hit their lows of the day at 2:00 pm, but it sputtered badly and the markets stared grimly at one of the largest one-day losses of the past two years.
Dow 11,613.30, -242.12 (2.04%)
NASDAQ 2,616.82, -50.51 (1.89%)
S&P 500 1,256.88, -24.99 (1.95%)
NYSE Composite 7,929.87, -162.24 (2.00%)
Confirming the carnage suggested by the headline numbers, declining issues battered advancers, 4889-1704. It's amazing it wasn't even more lopsided. Our leading current indicator has finally offered confirmation of a directional trend. New highs on the NASDAQ numbered 31, new lows, 74. On the NYSE, 31 new highs and 38 new lows. That makes five straight days on the NASDAQ that new lows have outnumbered new highs and three out of five on the NYSE.
If anyone's been waiting for indicators to flash red with sirens blaring, today was it. Japan's woes will continue to dominate the news for the foreseeable future and the associated supply chain issues of a globalized economy are beginning to come to light. Shipments of crucial parts are going to be delayed or stopped, trade will suffer and a large chunk of the world's third largest economy is going off-line for a while. Whether that is going to be weeks or months or years is still unknown, but the betting is that disruptions will extend through at least the end of the summer.
Another tell-tale sign that today was a day of capitulation by the bulls in US stocks was told by the off-the-charts volume in today's trading. It was the largest volume day of 2011 and may still be dwarfed by the eventual follow-on decline. One caveat is that the Fed continues its abuse of the US dollar by printing more of them at every opportunity. A decline in US stock markets will only trigger more printing, more inflation and an even more unbalanced global economy, one that was already teetering on the brink of disaster, even before the Japan debacle. However, such an inordinate infusion of capital may cause a snapback rally at any time. If such occurs, it will be easy to spot, as it will be sharp and large. The other characteristic of such an event is that it will have a relatively short duration - an afternoon, a day, a session and part of another, at most.
NASDAQ Volume 2,596,625,000
NYSE Volume 6,569,946,500
Commodities caught some bids, as sellers of equities rushed to less-risky assets. Oil was up 80 cents, to $97.98 as conditions in the Middle East continue to rage on, unsettled. Gold gained $3.30, to $1,396.10, and silver was up 36 cents, to $34.47. The move in precious metals is particularly interesting as it is a break-away from equities. Tuesday, all assets fell in a rush to liquidity. Today, the players were placing bets: for precious metals and other valuable commodities and against stocks and currencies.
Since there is no quick fix to nuclear accidents, especially those being mentioned alongside Chernobyl - the worst ever - don't expect the plant in question in Japan to be repaired for some time, if ever. Officials are only now poring over whether to entomb the reactors with heavy doses of cement or continue containment efforts, which are not working very well at present.
At this point, any intelligent human should take advantage of the short-term decline in the precious metals, but also maintain a large sum of cash, outside of any investments. In a declining, deflationary event, which may be occurring at this very moment, cash will be king. In a complete rout of economy, society and civility, gold and silver will reign supreme. Both situations have great potential at the current time.
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