Market Struggles for Gains; Gold, Silver Continue Higher

US equity markets are, in a word, blah.

They struggled on low volume for a second consecutive day to find smallish gains, with nothing much to go on other than the Challenger, Gray and Christmas report on planned layoffs, which came out prior to the market open.

The report showed that planned job cuts were up by 5.3% as compared to June, 2010, another sign that the US job market is weak and may be deteriorating further.

With the ADP private employment report pushed back to Thursday, that's all investors, speculators and traders had to go on, which really wasn't much, but still managed to pull out gains in all but the NYSE Composite.

Things should get a bit more interesting in upcoming days and weeks, as first, the ADP report comes out prior to the market opening Thursday, then the big one, the BLS non-farm payroll survey on Friday. Following the weekend, it's straight into 2nd quarter earnings reports, kicked off by Alcoa (AA) following the close on Monday, July 11.

Of course, nobody wants to talk much about the stalemate in Washington over the debt ceiling. Republicans have tied it to a demand for deep budget cuts and no new taxes, while the Democrats seek to salvage their favorite hand-out, er, entitlement programs, financing them with an increase in taxes on top wage earners and the elimination of some tax loopholes.

These issues will remain in focus until somebody blinks, and it appears that everybody in the nation's capitol have their eyes wide shut whilst the nation careens into another recession, or, at best, an era of slow to no growth. Naturally, neither side will admit that the bigger issues of Medicare and Social Security need to be dealt with now, rather than later, but the usual posturing on both sides will almost certainly prevent any substantive discussions on what's eventually going to bankrupt the country.

Nonetheless, traders trudged on to moderate gains on Tuesday.

Dow 12,626.02, +56.15 (0.45%)
NASDAQ 2,834.02, +8.25 (0.29%)
S&P 500 1,339.22, +1.34 (0.10%)
NYSE Composite 8,396.48, -8.15 (0.10%)

Advancing issues led decliners, 3464-2920. On the NASDAQ, new highs led new lows, 143-28, and the same setup appeared on the NYSE, with new highs ahead, 159-12, putting the combined total at an unworldly 202-40. Volume, again, was very, very, excruciatingly weak.

NASDAQ Volume 1,602,326,250
NYSE Volume 3,613,122,000

Oil shed 24 cents on the NYMEX futures market, to $96.65, but the precious metals were where the action was for the second straight session. Gold finished $16.50 higher, at $1,529.20, while silver tacked on 51 cents, to $35.92. Seems there are people out there still who haven't bought into the whole "recovery" story we've been spoon-fed since Spring of 2009.

That's about all there is to know, that it's dreadfully slow, consumers are avoiding both shopping and stocks, and it's the middle of Summer. Head for the beach.

Stocks Stall While Precious Metals Soar

Well, that week-long, pre-holiday buying rush seems to have come and gone now that the three-day weekend has passed, which really isn't surprising, considering how vaporous and baseless the entire five days rally was.

Low volume, as usual, was the telling factor in the melt-up last week and now it's gone, maybe for good. There are no more suckers in the market, or at least not as many as there were a few years ago. One look at today's volume numbers will stamp that as fact. Today might go down as the lowest volume trading day of the year, though there have been so many, it may not, and besides, nobody's keeping score.

One the other hand, precious metals did astonishingly well. There seems to be another shift to safety underway and nothing is safer than gold, and maybe silver, if the price manipulation would ever cease.

Other than the obvious, there was little to report from the exchanges. One wonders how the CNBC anchors manage to stay awake on days like this.

Dow 12,569.87, -12.90 (0.10%)
NASDAQ 2,825.77, +9.74 (0.35%)
S&P 500 1,337.88, -1.79 (0.13%)
NYSE Composite 8,404.63, -20.85 (0.25%)

Advancing issues had a slim advantage over decliners, 3278-3231. On the NASDAQ, there were 149 new highs and 27 new lows. The NYSE new highs beat new lows, 173-7. Combined new highs: 322-34. As mentioned, volume was dismal.

NASDAQ Volume 1,569,571,875.00
NYSE Volume 3,676,082,750

The real action was in commodities. Oil surged again, gaining $1.95, to close the day at $96.89. Gold was boosted $30.10, to $1,512.70, while silver gained an inordinate $1.70, to finish at $35.41.

The world still waits for the congress and president to decide on whether or not to raise the debt ceiling. Both houses remain in session, even though the week is usually reserved for yet another undeserved week-long vacation. With any luck, congress will allow the government to borrow to its heart's content before the NFL settles their issues.

Truthfully, more people are concerned about the NFL season than the debt limit. Obviously, one can live without a functioning currency, but Sundays without pro football is an unthinkabel reality that nobody seriously wants to consider.

What a Week for Stocks; Metals, Not So Much

Once word that the Greek government was going to pass the severe austerity measures on its people, so as to get another $17 billion in loans from the EU/IMF, stock traders were treated to a rare "all green" week of trading, as though risk had been taken entirely out of the equation.

Even the end of QE2 and the regime of free money for primary dealers didn't slow down the express train to the upside in equities. It was truly one of the best weeks ever for US markets in terms of gains, logging in five straight days of positive returns.

Here's how they fared.

INDEX	CLOSE 6/24	CLOSE 7/1	POINTS +/-
DOW	11,934.58	12,582.77	+648.19
NASDAQ	2,652.89	2,816.03	+163.14
S&P 500	1,268.45	1,339.67	+71.22
NYSE COMP	7,974.72	8,425.46	450.74

On Friday, after closing out the second quarter with very positive vibes, stocks continued to rally on the first day of July and the third quarter with the best performance of the entire week, in hopes that there will not be many more natural disasters - such as Fukushima, Midwest tornadoes or Northwest floods - and that the messy situation in Greece is at least solved for now.

Apparently, there is little worry over when and whether congress will reach a deal on the debt ceiling, now that legislators have put off their usual Independence Day week-long recess, to supposedly work towards some kind of compromise on the matter.

Today's results:

Dow 12,582.77, +168.43 (1.36%)
NASDAQ 2,816.03, +42.51 (1.53%)
S&P 500 1,339.67, +19.03 (1.44%)
NYSE Composite 8,425.46, +106.36 (1.28%)

Advancing issues had their way, beating decliners, 5104-1468. NASDAQ new highs: 148; new lows: 26; NYSE New highs 168; New lows: 4. Combined: 316 new highs, 30 new lows. Volume was even softer than what has normally been a lightly-traded market, leading some to conclude (perhaps rightfully so) that the movements of stocks in the age of whirring computers and unsolvable algorithms are highly manipulated by the big brokerages.

NASDAQ Volume 1,604,401,500
NYSE Volume 3,721,877,750

While stocks were soaring along, commodities - with the notable exception of oil - took it hard. Crude oil futures declined 48 cents, to $94.94, after gaining most of the week. Gold finished at its worst level in six weeks, down $20.20, to $1,482.60, and silver was pounded down once more, losing $1.13, to $33.70, a loss of more than 3%.

By the way, just in case someone comes along and tries to tell you that oil is priced so high because we're running out of it, you do have the right to punch that person in the nose or kick in the groin, as appropriate. The worldwide collusion in the price of oil and gasoline to consumers has been going on for some time (a long time) and the "peak oil" theory is about as useful as science as an ace bandage is to a torn ACL.

In a word, it is "bunk." For more information, see and read the work of F. William Engdahl.

Seriously, do you really believe that those "fossil fuels" - coal, natural gas and oil - come from the remains of dinosaurs? Considering the amount that's been dug, mined, stripped, pumped and drilled out of the earth the past 200 years alone would lead one to believe that the Jurasic period was a shoulder-to-shoulder affair.

QE2 Ends in No-Resistance Window Dressing Rally

Stocks made outsize gains for the fourth consecutive session; with the end of QE2 marking the end to more than $600 billion in monetary stimulus, traders, fittingly, went on a buying spree on the final day of the second quarter, whipping up stocks to sell to anybody willing to buy somewhere down the road.

The finality to the Fed's second attempt to re-invigorate the US economy has had some dubious effects, such as pushing crude oil and other commodities - with the notable exception of the precious metals - to nose-bleed levels, spiking interest rates (the 10-year is up more than 40 basis points in just the past three days) and generally applying relief to the banks, who have parked excess reserves at the Fed, without having done a thing to improve the horrific states of the housing and jobs markets. The US dollar is also down substantially against other currencies.

When the history books are written, QE1 and QE2 will be seen from the prism of a new present, and the look back will reveal whether or not the stimulus help or hastened the end of the fiat money era. For now, it continues to be an exercise in futility to bet against the Fed. Shorts have been burned repeatedly, as the flavor of fresh, daily money proved too difficult to resist for speculators.

With it over, the markets will have to go it alone, without the assistance or accommodation of the Federal Reserve, though it should be noted that the Fed stands ready to print more dollars and pump the banks further with liquidity at extraordinarily low rates. On top of that, the federal fund rate remains at 0.25-0.00%, an historical low, both of level and time. The rates have been down at those levels for nearly three years.

With half a year in the books, the major indices sport marginal gains for the year, bolstered by the past four days of hope and reckless buying. The markets even ignored another in a series of poor reports from the BLS on initial unemployment claims, which again came in higher than the rosy expectations, at 428,000, a drop of one thousand from the previous week, which supposedly was reason enough to cheer.

With one trading session remaining before the 4th of July holiday, not much is expected on Friday, as most of the big players will already be at their beach homes in the Hamptons or aboard their yachts. Yes, it is good to be rich.

Dow 12,414.34, +152.92 (1.25%)
NASDAQ 2,773.52, +33.03 (1.21%)
S&P 500 1,320.64, +13.23 (1.01%)
NYSE Composite 8,319.10, +90.60 (1.10%)

Advancers led decliners, 4774-1827. NASDAQ new highs: 103; new lows: 35. NYSE new highs: 112; new lows: 12. Combined, 215 new highs, 47 new lows. Volume was consistent with Wednesday's flow rate, nothing surprising there.

NASDAQ Volume 1,837,387,750.00
NYSE Volume 4,199,619,000

Crude continued to rise, gaining 65 cents, to $95.42. Expect to be gouged for gas no matter where you live in America this weekend. Though the price of oil has fallen over the past month, it has surged in the past week.

Gold dropped $11.90, to 1499.90, while silver also took it on the chin, losing 20 cents, to $34.68.

It should be clear to everyone by now that fighting the Fed is a losing proposition, and, with the markets front-loaded for the primary dealers, there's no margin for error for the individual investor. For the present, it's up, up and away for stocks. Let's see how long it lasts.

Greece Passes Austerity; Next Up: US Debt Limit

While there was little doubt that the Greek parliament would "do the right thing" and pass the 5-year austerity package in order to secure another $17 billion in their continuing slavish relationship with the IMF, ECB and EU, the results on the streets of Athens suggest that the plan may not be to the liking of the average Greek, if there is such a creature.

Imagine this happening in the United States. A consortium of banks hold the US government hostage, saying, in effect, "do this, or we cut off your allowance." The this being the layoff of thousands of government employees, wage cuts for others, a 10% tax increase and the selling off (privatization) of state assets, one wonders how the Greek populace will like living in abject poverty for the remainder of their lives. In America, one need not wonder. It would most likely pass, but the popular fury and anger would be ferocious.

So it is in Greece, where protesters hailed rocks and stocks at police throughout the day and police returned with salvos of tear gas. There was a great deal of looting and confrontation with the police, but few arrests. It seems the Greek police, some of whom will be paid less in a few weeks than they are now, or may not have jobs at all, have a bit of a heart for their countrymen and women.

Essentially, along with the 10% tax increase, services will be cut by about 25%, along with available government positions and wages. $50 in Greek assets will be privatized, begging the question of just what the Parthenon may be worth to some European oligarch-trash who wish to add it to their art collection.

The measure passed with a vote of 155-138, with some abstentions, since the Greek parliament is comprised of 300 members. But one has to wonder just how long it will last before the money-starved Greeks begin to turn on the government again and again, seeing the bailout as nothing more than another stalling tactic for a bankrupt nation and largesse for the elitist bankers.

Stocks and commodities both were buoyed by the passage, as the globalists averted another crisis in the flawed and corrupt fiat money system. So, the result, higher prices for everything, except, of course, wages.

The next chink in the armor to be fixed would be the US insolvency issue, that of raising the debt debt ceiling so the world's largest net creditor can continue to borrow and spend until the elections of 2012, at least. The deadline of August 2nd approaches with all due haste, though both houses of congress will not be convened at the same time, if they keep to their schedules.

The House was already in recess this week and will be until July 5th, though the senate recess - scheduled for July 4-10, is in doubt, with Democrats seeking to cancel it, and Republicans all too willing to stay in Pro Forma session, fearing recess appointments by the President.

With any luck, the tow houses of financial horror could actually do some deal-making between the 10t of July and the August 2 deadline, and that would be almost a surety, as both houses will recess on August 8 and not return until September 5, after Labor Day and well beyond the statutory constraints of passing a new debt ceiling.

Just like in Greece, however, it's expected that the senate and the president will approve some kind of deal at the last moment, ensuring maximum discomfort and anxiety for the good people of America. Of course, any talk of a balanced budget amendment, currently being espoused by various Republicans, should be recognized immediately as a complete sham, though there is some hope that some semblance of spending restraint may be written into any new bill. The long money is on the government beating the deadline by days and getting back to doing what they do best, spending money they don't have.

Dow 12,261.42, +72.73 (0.60%)
NASDAQ 2,740.49, +11.18 (0.41%)
S&P 500 1,307.41, +10.74 (0.83%)
NYSE Composite 8,228.50, +92.52 (1.14%)

Gainers beat losers by a solid margin, 4185-2361. On the NASDAQ, new highs were better than new lows by a 100-29 margin, while on the NYSE, the new highs outnumbered new lows, 81-14. The combined total of 181 new highs to 43 new lows suggests that we're back to "risk on" for the foreseeable future, though, being summer, a sideways trend always has great potential. Volume was light, but not actually awful.

NASDAQ Volume 1,816,885,000
NYSE Volume 4,316,723,500

WTI crude futures rose remarkably again, up $1.88, to $94.77, along with gasoline, which has been rocketing of late. The most recent price gouges have not shown up at the punp yet, though they surely will by the weekend. AAA reports that the average price of a gallon of unleaded regular is $3.54, with higher price in the more populous states of the Northeast and West coast.

Gold got a little nibble of a bid, rising $9.10, to $1511.20. Silver spiked 92 cents, to $34.86.

Tomorrow morning initial unemployment claims numbers may do damage to the current three-day rally in stocks, though a positive report could produce more cries of "soft patch" and a continuation of the "risk on" trade.