Markets Up on Greek Deal Hopes

Well, that headline is not a joke. Surely, nobody on Wall Street has ever heard the phrase, "beware Greeks bearing gifts," though by tomorrow, everyone will know whether the second bailout of Greece - with a third coming by the end of August, almost certainly - will be a bonus or a canard.

The issues facing the Greek government are the roll-over of some $10 billion in maturing debt, plus another $40 billion in August. Right now, the deal is on, if Greek prime minister, George Papandreou, receives a vote of confidence from the Greek parliament, in a vote scheduled at the stroke of midnight in Greece (5:00 pm EDT).

Papandreou looked to have enough votes to win the crucial vote of confidence in parliament which would pave the way to passage of the latest austerity measures next week, ensuring a $12 billion advance from the ECB and the IMF.

With time winding down on the vote, crowds were beginning to form in Syntagma Square, directly across from the Parliament building. A vote of no confidence would be seen as a victory for the Greek populace, and if Papandreou does get the needed votes, rioting and confrontation are a near-certainty, as much of the population would like to detach Greece from the EU, return to the drachma and move on. (We will post an update of the vote as soon as it is confirmed.)

Elsewhere, investors looked past more horrifying housing numbers, as existing home sales in May fell by 3.8% from April and are down 15.3% from the same time last year, according to the report released by the National Association of Realtors (NAR).

So, once again, Wall Street demonstrated just how far detached from Main Street it really is, a chasm that only seems to keep widening.

Dow 12,190.01, +109.63 (0.91%)
NASDAQ 2,687.26, +57.60 (2.19%)
S&P 500 1,295.52, +17.16 (1.34%)
NYSE Composite 8,156.27, +124.05 (1.54%)

Advancing issues defeated decliners, 5430-1205. On the NASDAQ, there were 55 new highs and 32 new lows. The NYSE registered 68 new highs and 25 new lows, effectively ending the 12-day stretch in which the lows held the advantage with the combined numbers at 123 new highs and 57 new lows. What a difference a Greek makes!

Volume on the day was marginally better than on Monday, which is saying very little.

NASDAQ Volume 1,825,893,375
NYSE Volume 3,913,965,750

WTI crude futures edged up 14 cents, to $93.40. Gold added $6.30, to $1546.80 and silver was up 37 cents to $36.43. The moves in precious metals reflected the uncertainty of global economic conditions.

Tomorrow the Federal Reverse Open Market Committee will issue another one of the periodic edicts, keeping interest rates at near ZERO, and, presumably, will include the words, "extended period" for how long they believe it will be before they actually raise rates one iota.

The Fed is stuck in no-man's land, with a stumbling, structurally-impaired domestic economy and the threat of inflation due to a falling dollar. Thus far, the Fed has taken the easy route of monetary stimulation, throwing trillions into a stagnant economy, and that's likely to be their choice for many months, if not years, to come.

In reality, Greece is a side-show.

Seriously, a Rebound? No Volume, and Slim Gains

It's almost summer, so stocks and the people who trade them aren't going to take much of anything too seriously. It's a good thing that the American culture is as laid-back as it is, because if people watched their money, markets and politicians with reasoned discipline, we'd all be in the soup - or soup lines.

Being that the weather's more suited for surfing than high finance, Wall Street put on its best summery smile today and boosted stocks for no particular reason other than there wasn't any disturbing economic news from Greece, or Washington, or anywhere else for that matter.

It's these kinds of days that Wall Street could use a steady diet of to produce what will be called a "summer rally" despite the Fed cutting off funds via the end of QE2, and Greece more likely than not to default. Whatever Greece decides to do about their fiscal and monetary condition, it will have far-reaching effects, mostly on European banks, but surely some spill-over will do damage on American shores. Everyone's in for a piece of the action, and haircuts for the bond-holders seems to be the likely outcome, though the EU and IMF ministers would much rather lay it all on the backs of the Greek people, through austerity, budget cuts and a wrecked economy.

However, since nobody took any decisive action today, it was safe to make a few bets in the cavernous casino that is Wall Street. Besides, after six losing weeks, the markets were set up for a technical bounce, in other words, more suckers got taken today.

Dow 12,080.38, +76.02 (0.63%)
NASDAQ 2,629.66, +13.18 (0.50%)
S&P 500 1,278.36, +6.86 (0.54%)
NYSE Composite 8,032.22, +32.11 (0.40%)

While the gains weren't much to speak of, neither was the breadth. Winners beat losers, 3991-2443, roughly a 5:3 margin. NASDAQ showed that there was still a good deal of selling going on as only 29 stocks made new highs, but 104 hit new lows. ON the NYSE, 32 new highs and 53 new lows, so the combined total was another winner for the new lows, the 12th straight of that variety, with 61 new highs and 157 new lows.

Since volume was non-existent, one would be correct in believing that the correction was just taking a breather. Nothing goes in straight lines, so count this as one of the few good days in a continuum of downers.

NASDAQ Volume 1,612,915,750
NYSE Volume 3,371,598,000

Crude oil continues to demonstrate weakness, up only 25 cents on the day, to $93.26. Some of the crude decline is beginning to show up at the pump. AAA reports the national average at $3.65 for a gallon of unleaded regular, with the lowest to be found in Tennessee, at $3.45/gallon.

Gold gained $1.40, to $1541.40, while silver was up 14 cents, to $36.04.

All in all, it was a dull session, which is probably the way it should be. Wild swings are for gamblers and home run hitters. A dose of slowness - like the way markets were back in the 50s and 60s - might not be such a bad thing.

Ah, summer. Ya gotta love it. Almost makes one fell like taking the car out for a spin. Well, maybe.

Desperate Late Rally Bumps Dow to First Gain in Seven Weeks

What an absolute mockery the US stock markets are.

With stocks deteriorating late in the day, synchronized buying in the final 4 minutes brought the Dow Jones Industrial average back over 12,000, and to the first positive close in seven weeks.

The S&P move, similar in time frame, was even sillier, getting the widely-watched average to close exactly 0.52 higher than it ended last week. The Dow was up 52 points for the week, while the NASDAQ finished up the week a loser, down 27 points. Apparently, the genius brain trust on Wall Street missed that one.

In a few words, stocks are still very weak and the issues causing the weakness have yet to be resolved.

Dow 12,004.36, +42.84 (0.36%)
NASDAQ 2,616.48, -7.22 (0.28%)
S&P 500 1,271.50, +3.86 (0.30%)
NYSE Composite 8,000.11, +36.51 (0.46%)

For the first time in a while, advancers carried the day, unconvincingly beating declining issues, 3857-2774. On the NASDAQ, there were only 28 new highs and 113 new lows. The NYSE saw 25 new highs, but 48 new lows, making the combined totals favor the new lows for the 11th straight session, 161-76. Volume was healthy, having much to do, as did the general gains, with quadruple witching on options expiration. Beginning next week, with the options play out of the way, stocks can get right back to falling off the table again.

NASDAQ Volume 2,491,541,250
NYSE Volume 4,925,850,000

Crude oil was hammered down again, losing another $1.94, to close out the week at $93.01. Gold finished up $10.80, at $1540.00, while silver added 31 cents, to $35.90.

Economic data was muted, with the Conference Board's Index of leading Indicators up 0.8% for May, while the University of Michigan's consumer sentiment index backtracked from 74.3 in May to 71.8 in June.

It was a wild week for everyone, even those of us who only report on the madness.

From Greece to Philadelphia, It Is All Bad

Whether it's indecision by the IMF, the EU, the Greek government or any other body that has an interest in the continued operation of the nation formerly known as Greece, markets have been roiled by the chain of events, delays, misconceptions and outright fabrications that have come to light over the past two weeks in the continuing collapse of Greece, and, by proxy, the European Union.

The situation has been in flux and flummoxed for a fortnight, with no apparent end in sight. Various people whose names all sound like Pompondreaus and will soon be forgotten pledge to make austerity nation of the Greeks, resign their office or do some other dastardly deed, hoping to end the crisis, though, in reality, everybody knows that Greece must be set free to return to the Drachma as their official currency and be done with the eleven-year-old experiment that is the Euro.

Ditto that for Portugal, Ireland, Belgium and sooner or later, Italy and Spain. Within a few years time, if not much sooner, the European Union will cease to exist.

Between now and whenever the bankers and politicians can decide on how best to divide the spoils of their failed experiment in a unified currency, we are likely to see more riots, food lines, general strikes, paramilitary actions, riots, shortages, lies, changes of governments, riots and as much discontent as a continent can have without actually being at war. Of course, war is always an option, one which may be used as an interim resort, by which to save the fannies and faces of the corrupt and wholly bankrupt European banking system.

The effect on the US is felt in myriad ways. For one, our sovereign dollar becomes better looking as a "safe" currency, our bonds become more expensive and yield less and US global stocks go for a merry-go ride, such as today's.

Also affecting the price of stocks - discounting the usual front-running, insider scams and outright HFT manipulation - was the report from the Philadelphia Fed on business activity within that district, which sank from an already-abysmal reading of 3.9 in May to -7.7 in June, the worst number since July of 2009. This followed Wednesday's stunner from the NY region, which had the Empire Index at -7.8 in June after a 11.9 number in May. Both indices measure general manufacturing and business conditions for their respective regions and show a general malaise reappearing when we're supposed to be in the midst of a recovery.

It's simply not happening, as continuing unemployment claims showed, dropping a bit to 414,000 in the most recent week, though still far too high a number to indicate anything other than continued pain and a lack of available jobs for the shrinking American workforce.

Stocks responded with a zig-zag effect, up in the morning, down in the afternoon, with a half-hearted rally at the end. Apparently there is some stomach for the larger, established, global industrial stocks contained in the Dow 30.

Dow 11,961.52, +64.25 (0.54%)
NASDAQ 2,623.70, -7.76 (0.29%)
S&P 500 1,267.64, +2.22 (0.18%)
NYSE Composite 7,963.60, -4.21 (0.05%)

Internals were not bifurcated in the least, offsetting any calming effect the headline numbers might suggest. Declining issues led advancers once more, 3562-3022. The NASDAQ saw a mere 13 stocks make new highs, while 112 recorded new lows. New lows led new highs on the NYSE as well, 82-16, giving the edge to new lows for the 10th straight session, 194-29. Eventually, most likely on a free-fall day in which the Dow is down 300 or more points, this measure will read off the charts, with over 1000 stocks hitting new lows. It is a moment to watch for, because it will signal the second phase of the bear market, the one which usually lasts the longest and is the most painful, in which stocks trade sideways to down for an extended period of time. Watch for it in a few weeks or months, though it could come at any time, depending on the particular catalyst.

Volume was along the same range as yesterday's, not much help to anyone doing technical analysis, though probably favoring the bearish case more than anything else.

NASDAQ Volume 1,985,734,500.00
NYSE Volume 4,642,697,500

Unfortunately, WTI crude oil futures were up 14 cents, to $94.95, instead of continuing the precipitous decline. It's an odd paradox for the American consumer. While most would like to see oil around $60 a barrel, which would drive gasoline prices down to around $3.00 per gallon, the correlated rise in the dollar would also serve to drive stocks lower, such is the pair-trade these days. However, the resulting stronger dollar would do more than just keep fuel prices down. It would keep more money in the hands of consumers while lowering the cost of just about everything, because everything needs to be shipped from one place to another. Additional discretionary money in the consumer's hands would lead, most likely, to paying down more debt, which is needed, and giving a general boost to the economy, also sorely needed.

Why it will not happen is because it is inherently deflationary, something by which the Federal Reserve and the US Treasury cannot abide, simply because lower prices for consumer end-products, outright deflation and improving conditions would also push interest rates higher, making the debt more expensive to repay. Thanks to the wizardry of the Federal Reserve, Americans are barred from lower prices, saving, and actually living in a world in which every last penny is not spent on either food, energy or taxes.

It is completely untenable and eventually one side will have to give in. A few million starving Americans might just force the Fed's hand and allow natural market forces to take hold. (I am dreaming of course, but do not wake me.)

Precious metals were essentially flat, with gold up 10 cents, to $1529.30 and silver down six cents, at $35.53.

Friday will be interesting if only to see whether the current losing streak for stocks continues for a nearly unprecedented seventh straight week. With it being a quadruple-witching day, we should certainly have our doubts. The markets are temporarily oversold, so any impetus at all should result in at least a small rally, which will save the day, though the war is far from being over.

Greece in Tatters, US Still in Denial

As Greece burns, global stock markets reel in terror.

It's really about time that the oligarchs running the show down on Wall Street come to the realization the most of the rest of the world isn't buying their load of bull hockey any more and investors are making their displeasure known by their feet, fleeing overpriced, overhyped, intangible assets as quickly as they can.

If the shakeout of small investors wasn't complete in the Fall of 2008 and the Winter of 2009, then this is to be expected. There are a myriad of reasons stocks should be sold off. Here's a small ticking off of the major bullet points:

• Incomes haven't risen in years, though the price of everything from food to rent to heating fuel has doubled in some cases.
• Maybe Americans are a little bit tired of killing themselves at low-wage jobs just to buy gas at upwards of $3.50 a gallon.
• Speaking of jobs, there aren't any.
• Americans are sick of bailouts of the banks which caused this crisis.
• Americans are sick of bankers getting enormous bonuses for abject failure.
• Americans are sick of a federal government that keeps putting us deeper and deeper in debt.
• Americans are sick and tired of the Fed devaluing the currency and causing global inflation.
• Americans are sick and tired of the casino-like atmosphere on Wall Street, controlled by a very few insiders with guarantees of non-failure, not to mention the insider trading, HFTs, front-running, bond-flipping and all the rest of the improper accounting tricks and bogus schemes.
• Americans would like to see Jamie Dimon, Lloyd Blankfien, Angelo Mozillo and many others prosecuted for their crimes, but the US Justice Department has been bought off.
• Iceland defaulted, Ireland is a basket case, Greece is going to default and then Portugal and Spain and Italy should, if only to express outrage at the corrupt Berlusconi government.
• The US government is horribly corrupt as well and default is headed for our shores as well, since all the Treasury Secretary and Federal Reserve Chairman know how to do is further impoverish the people of the United States, and, to a lesser degree, the rest of the population of the world.
• Americans are sick of rules, taxes, regulations, heavy-handedness at all levels of government, the continued deprecation of civil liberties, the lies, obfuscation and treachery at the highest levels of government and finance. Americans want the truth, but the politicians and bankers know that they would all be behind bars, or worse, should the truth be known.
• Americans want the government out of their lives, decent jobs, no more wars, no more lying, nothing more.

Is that enough? Because there is more.

Granted the oligarchs of Wall Street and Washington will not listen. They will pose and posture and make statements about what America wants and needs and do nothing of the kind. And the media will bombard us with non-stop presidential politics for the next 18 months, even though half of the population could care less.

While Greece has surely lost the control of the public and all confidence, just as has Ireland and Iceland, and Egypt and Syria and many other countries, the American "establishment" has lost the confidence of its people. It's really that simple. Nobody approves of what goes in on Washington, and thus, nobody abides by them. The US political structure is such a laughing stock that serious people simply ignore it. Add on to that the massive numbers of people who have seen the political and economic systems for what they are and are opting out, dropping out, refusing to comply and bend to the will of the small, wealthy minority who wants to make all the rules, and you have a perfect condition for collapse, the collapse that should have happened three years and $20 trillion of wasted stimulus ago.

The desperation of the elitists is evident from the sour expressions of the paid monkeys on CNBC, who keep insisting that this downturn is temporary or transitory or a "soft patch" in the "recovery." It's hilarious to watch, especially if one is invested in hard goods, precious metals and/or commodities. To put it simply, stocks are for suckers, and the number of suckers still at the table is dwindling, fast.

Dow 11,897.27, -178.84 (1.48%)
NASDAQ 2,631.46, -47.26 (1.76%)
S&P 500 1,265.42, -22.45 (1.74%)
NYSE Composite 7,967.81, -164.96 (2.03%)

The internals told the true story of the devastation. Declining issues outpaced advancers by the largest margin in almost than a year, 5379-1270. NASDAQ recorded 11 new highs and 114 new lows, while the NYSE saw 23 new highs and 79 new lows. The combined total has the new lows ahead for the ninth consecutive session, at just 34 new highs and 193 new lows, with surely more to come.

Volume was actually a little bit perky, especially tantalizing for short sellers and bears.

NASDAQ Volume 1,993,706,125
NYSE Volume 4,653,039,000

As the Greek situation broke down and out, into street protests and young men attacking riot police with sticks, bats and rocks, the dollar became the safe haven currency, smashing crude oil down by $4.68, to $94.81. Oil still has a long way to come down before any kind of supply-demand equilibrium can be maintained. $70 or $60 or even less per barrel are no longer outside targets.

Gold rose modestly as as store of value, up $6.70, to $1530.80. Silver tagged along, gaining 41 cents, to $35.80, though, if stocks continue to slide, they may take other asset classes along with them in a deflationary episode, despite the ongoing efforts by the central banks and the Fed to inflate.

Today's declines took out all of yesterday's gains. Stocks are on track to record their first seven-week losing streak since early 2001, predating 9/11.

Just for fun, tomorrow's traders will have to deal with this week's initial unemployment claims, which will be released an hour prior to the opening bell. It ought to be a doozy.