Hooray!
Nothing like another gap up at the open and a fizzled rally on the first day of the month.
With all the players flush with cash following the best January since 1997 (shows how horrible the market has been over the past 15 years), there had to be someplace to put all that money to work. Bingo! Let's buy some stocks!
But, let's not get carried away, like last month, when the gains on the first trading day of the month (January 3) was about 2/5ths of the gains for the entire month and after options expiration on Friday, January 20, stocks stalled, ending the month three points lower from that date on the S&P and 87 points lower on the Dow.
The possible excuses catalysts for the meteoric rise at the open and through the early afternoon were various, but hardly worth the triple-digit gains on the Dow (up 151 points at the peak), including the excitement over the imminent IPO of Facebook, the ADP Employment Change (showing 170,000 new private sector jobs in January, below consensus), the 54.1 read on the ISM index (also below expectations) or the "any day now" word from Europe on the Greek debt deal.
No, it was just those crazy Wall Street guys with cash on hand and time to waste that led to the "giddy-up" on the first day of February. Perhaps April Fool's Day was bumped up a couple of months.
What killed the rally was day-trading, as usual, as the smartest guys got the heck out of the way, before American Airlines (AMR) announced that it would lay off 13,000 workers, their pension plans to be likely administered by the Pension Benefit Guaranty Corporation (PBGC), otherwise known as the federal government, AKA, me, you and the rest of working Americans, something that was discussed on this very blog about six years ago.
Yep, this was a swell rally, even though it only lasted about four hours. Prepare for tomorrow's gap down at the open and Friday's slaughter when non-farm payrolls reveal that the birth-death model accounted for about 300,000 phantom jobs created in 2011.
And the president, now known as the landlord-in-chief, announced a broad plan to save the hundreds of thousands of people with underwater mortgages. Too bad Mr. Obama didn't disclose to the cheering throng in Falls Church that his plan has exactly zero chance of passing through congress because it requires the banks to pony up some money to fund these write-downs. The program to rent out already foreclosed-upon homes will move forward, however, bringing the slums directly to a neighborhood near you.
(Personally, I'm still waiting for car dealerships to give away new cars as long as the buyer signs an oath to only buy gas from ExxonMobil. I want a Veloster, or, something like that.)
Happy days!
Dow 12,716.31, +83.40 (0.66%)
NASDAQ 2,848.27, +34.43 (1.22%)
S&P 500 1,324.08, +11.67 (0.89%)
NYSE Composite 7,940.29, +101.81 (1.30%)
NASDAQ Volume 2,046,891,250
NYSE Volume 4,380,622,000
Combined NYSE & NASDAQ Advance - Decline: 4505-1144
Combined NYSE & NASDAQ New highs - New lows: 441-21 (now, that's extreme! Time to sell.)
WTI crude oil: 97.61, -0.87
Gold: 1,749.50, +9.10
Silver: 33.81, +0.55
Wednesday, February 1, 2012
Tuesday, January 31, 2012
Another Great Session for Equity Day-Traders as January Posts Positive
Yesterday, a gap lower at the open. Today, a gap up.
This is all according to plan, which excludes individual investors to the great benefit to those in the know.
Imagine being an insider. On Monday, you buy shares of your particular stocks of the day at the lows of the day, around 10:00 to 10:30 am ET and all day long, you watch as they gain in value. Then, on Tuesday, you sell at some high point right before the dismal Chicago PMI and Conference Board's Consumer Confidence number (more on thses later). Naturally, you ignored the poor showing from the Case-Shiller 20-city index, because nobody cares about housing, right?
You're a winner, in all aspects except for honesty, integrity and fairness. Worry not, because you or your firm made massive money all through the month of January, as the Dow rose 3%, the S&P gained 4% and the NASDAQ was up 8%.
Smashing! Except that gold and silver trounced your paper-made profits. Gold finished the month of January with a 13.9% gain and silver was up 19% for the month. And there's no chance of the metals going to zero and no counter-party risk. Well, golly.
As for that Chicago PMI, the market was looking for a number of 62.8, after December's 62.2 print. The reality was a poor 60.2, the lowest number since August, 2011, another indication that the holiday season in particular was something of an over-hyped bust and that the recovery continues to be choppy and not well-anchored. Bummer!
According to the Conference Board, consumer confidence was measured at 64.8 in December, but flopped to 61.1 in January. Double bummer!
The aforementioned Case-Shiller data, albeit back-dated, showed that home prices fell 3.7% from November 2010 through November 2011. Prices fell 0.7% (adjusted) or 1.3% (unadjusted) in November from October, as 19 of 20 cities experienced price declines. Phoenix was the only city registering a positive figure.
Not to worry. January's window dressing is complete and there's nothing to worry about heading into February... except for that nagging European debt crisis, Greece, the utter collapse in the Baltic Dry Index, and the looming showdown in washington over whether or not to extend the Bush tax cuts another 10 months, as congress, rather than deal with real issues, took the easy route in December and compromised to keep them intact through the end of February (they'll extend, as extending is part of their "extend and pretend" strategy).
No, no, nothing can go wrong. Let's just keep day-trading until...
By the way, volume continues to be dreadful, even though the Fed, through it's ZIRP to infinity policy, has forced fund managers into much more riskier trading scenarios than they normally would endeavor.
You can cite the January Barometer, which posits that "as goes January, so goes the rest of the year." except for last year, that is.
Well, keep trading stocks. They matter. Right?
Dow 12,632.91, -20.81 (0.16%)
NASDAQ 2,813.84, +1.90 (0.07%)
S&P 500 1,312.40, -0.61 (0.05%)
NYSE Composite 7,838.30, +3.89 (0.05%)
NASDAQ Volume 1,602,785,875
NYSE Volume 4,156,928,000
Combined NYSE & NASDAQ Advance - Decline: 3135-2441
Combined NYSE & NASDAQ New highs - New lows: 276-22 (extreme, poised for reversal or breakout)
WTI crude oil: 98.48, -0.30
Gold: 1,737.80, +6.80
Silver: 33.26, -0.27
This is all according to plan, which excludes individual investors to the great benefit to those in the know.
Imagine being an insider. On Monday, you buy shares of your particular stocks of the day at the lows of the day, around 10:00 to 10:30 am ET and all day long, you watch as they gain in value. Then, on Tuesday, you sell at some high point right before the dismal Chicago PMI and Conference Board's Consumer Confidence number (more on thses later). Naturally, you ignored the poor showing from the Case-Shiller 20-city index, because nobody cares about housing, right?
You're a winner, in all aspects except for honesty, integrity and fairness. Worry not, because you or your firm made massive money all through the month of January, as the Dow rose 3%, the S&P gained 4% and the NASDAQ was up 8%.
Smashing! Except that gold and silver trounced your paper-made profits. Gold finished the month of January with a 13.9% gain and silver was up 19% for the month. And there's no chance of the metals going to zero and no counter-party risk. Well, golly.
As for that Chicago PMI, the market was looking for a number of 62.8, after December's 62.2 print. The reality was a poor 60.2, the lowest number since August, 2011, another indication that the holiday season in particular was something of an over-hyped bust and that the recovery continues to be choppy and not well-anchored. Bummer!
According to the Conference Board, consumer confidence was measured at 64.8 in December, but flopped to 61.1 in January. Double bummer!
The aforementioned Case-Shiller data, albeit back-dated, showed that home prices fell 3.7% from November 2010 through November 2011. Prices fell 0.7% (adjusted) or 1.3% (unadjusted) in November from October, as 19 of 20 cities experienced price declines. Phoenix was the only city registering a positive figure.
Not to worry. January's window dressing is complete and there's nothing to worry about heading into February... except for that nagging European debt crisis, Greece, the utter collapse in the Baltic Dry Index, and the looming showdown in washington over whether or not to extend the Bush tax cuts another 10 months, as congress, rather than deal with real issues, took the easy route in December and compromised to keep them intact through the end of February (they'll extend, as extending is part of their "extend and pretend" strategy).
No, no, nothing can go wrong. Let's just keep day-trading until...
By the way, volume continues to be dreadful, even though the Fed, through it's ZIRP to infinity policy, has forced fund managers into much more riskier trading scenarios than they normally would endeavor.
You can cite the January Barometer, which posits that "as goes January, so goes the rest of the year." except for last year, that is.
Well, keep trading stocks. They matter. Right?
Dow 12,632.91, -20.81 (0.16%)
NASDAQ 2,813.84, +1.90 (0.07%)
S&P 500 1,312.40, -0.61 (0.05%)
NYSE Composite 7,838.30, +3.89 (0.05%)
NASDAQ Volume 1,602,785,875
NYSE Volume 4,156,928,000
Combined NYSE & NASDAQ Advance - Decline: 3135-2441
Combined NYSE & NASDAQ New highs - New lows: 276-22 (extreme, poised for reversal or breakout)
WTI crude oil: 98.48, -0.30
Gold: 1,737.80, +6.80
Silver: 33.26, -0.27
Monday, January 30, 2012
Abundant Skepticism in US Stock Markets
There's nothing quite like a Monday morning gap down at the open to portray the absurdity of the modern US equity markets.
Stocks opened sharply lower (the Dow down as much as 131 points by 10:30 am ET), but then staged a day-long rally ending with mostly flat to slightly lower averages that had everybody but day-traders scratching their heads.
The reason day traders would be among the least surprised by the tenor of today's trading is that gap ups and downs have become somewhat the norm over the past few years and especially so in the last six to eight months. Shrewd day-traders are out by the close and ready with new positions at every open, so, the gaps in trading from one day to the next create boundless opportunities for profit.
And who might these day-traders be? They are not, as many assume, older, well-off types who sit in front of computers in their McMansions ticking off trades. They are more than likely to be hedge funds and the brokerages of the largest banks in the world, and therein lies the wickedness and fruitlessness of trading in today's markets for the individual investor.
Today's deep dive at the open was fomented by a couple of data points from the government that saw personal income rise by 0.4% in December, but personal spending flat for the same month. That translated into a savings rate of 4% for the average American, far beyond what the powers that be would prefer, but the flat line on spending in December meant that the much-ballyhooed Christmas spending spree was more hot air and bluster than reality and the US economy is still barely treading water.
Adding insult to the intelligence of the American investor was the fact that almost every other stock market in the world took losses on the day, the euro was sharply lower against the US dollar (normally a selling signal) and the Greece debt crisis - which was supposed to be solved over the weekend - continues to deepen.
Anyone thinking that today's action in equities was a sign that the economy is on solid ground probably also thinkis Bank of America is a good investment (paging Dick Bove) and that Newt Gingrich would do well as a presidential candidate against Barack Obama.
Our markets are permanently broken, manipulated and dishonest and until there are radical changes in the ways brokerages are regulated and separated, not only from their holding banks, but from the Fed, the government and the PPT.
Until then, beware of rallies off of sharp opening declines and huge gaps up at opens as well. They're nothing but openings for traders with more skills, more money and more advantage than the average Jane or Joe, and the movements of the market are nothing more than maintaining the illusion of stability until the elections in November.
Dow 12,653.72, -6.74 (0.05%)
NASDAQ 2,811.94, -4.61 (0.16%)
S&P 500 1,313.02, -3.31 (0.25%)
NYSE Composite 7,830.42, -46.19 (0.59%)
NASDAQ Volume 1,621,418,500
NYSE Volume 3,493,897,750
Combined NYSE & NASDAQ Advance - Decline: 1983-2611
Combined NYSE & NASDAQ New highs - New lows: 218-25 (still extreme, bordering on absurd)
WTI crude oil: 98.78, -0.78
Gold: 1,731.00, -1.20
Silver: 33.53, -0.26
Stocks opened sharply lower (the Dow down as much as 131 points by 10:30 am ET), but then staged a day-long rally ending with mostly flat to slightly lower averages that had everybody but day-traders scratching their heads.
The reason day traders would be among the least surprised by the tenor of today's trading is that gap ups and downs have become somewhat the norm over the past few years and especially so in the last six to eight months. Shrewd day-traders are out by the close and ready with new positions at every open, so, the gaps in trading from one day to the next create boundless opportunities for profit.
And who might these day-traders be? They are not, as many assume, older, well-off types who sit in front of computers in their McMansions ticking off trades. They are more than likely to be hedge funds and the brokerages of the largest banks in the world, and therein lies the wickedness and fruitlessness of trading in today's markets for the individual investor.
Today's deep dive at the open was fomented by a couple of data points from the government that saw personal income rise by 0.4% in December, but personal spending flat for the same month. That translated into a savings rate of 4% for the average American, far beyond what the powers that be would prefer, but the flat line on spending in December meant that the much-ballyhooed Christmas spending spree was more hot air and bluster than reality and the US economy is still barely treading water.
Adding insult to the intelligence of the American investor was the fact that almost every other stock market in the world took losses on the day, the euro was sharply lower against the US dollar (normally a selling signal) and the Greece debt crisis - which was supposed to be solved over the weekend - continues to deepen.
Anyone thinking that today's action in equities was a sign that the economy is on solid ground probably also thinkis Bank of America is a good investment (paging Dick Bove) and that Newt Gingrich would do well as a presidential candidate against Barack Obama.
Our markets are permanently broken, manipulated and dishonest and until there are radical changes in the ways brokerages are regulated and separated, not only from their holding banks, but from the Fed, the government and the PPT.
Until then, beware of rallies off of sharp opening declines and huge gaps up at opens as well. They're nothing but openings for traders with more skills, more money and more advantage than the average Jane or Joe, and the movements of the market are nothing more than maintaining the illusion of stability until the elections in November.
Dow 12,653.72, -6.74 (0.05%)
NASDAQ 2,811.94, -4.61 (0.16%)
S&P 500 1,313.02, -3.31 (0.25%)
NYSE Composite 7,830.42, -46.19 (0.59%)
NASDAQ Volume 1,621,418,500
NYSE Volume 3,493,897,750
Combined NYSE & NASDAQ Advance - Decline: 1983-2611
Combined NYSE & NASDAQ New highs - New lows: 218-25 (still extreme, bordering on absurd)
WTI crude oil: 98.78, -0.78
Gold: 1,731.00, -1.20
Silver: 33.53, -0.26
Paying Bills
This guest post from Lewis Beck
I have started paying all of my bills online. It is so much easier and it keeps me more organized. I used to have a stack of bills that came in the mail and I would have to use several stamps and mail each bill back. Sometimes, if I was out of stamps, I would end up mailing my bills back late because I would forget to go buy more stamps. If my bills were late, I would be charged a late fee. When I pay bills online can do it immediately and I do not have to worry about if the bill is going to be late. I also just get an email when the bill is due, so I do not have to worry about getting so much mail that just sits on my counter. I do not have to worry about late fees or stamps. It is so much easier to pay my bills online. I am so glad that I have Satelite Internet Oregon. It has made my life much less complicated and I do not know what I would do without the internet.
Friday, January 27, 2012
4th Quarter GDP Up 2.8%; 1.9% from Inventory Build; Checklist for Peace and Prosperity
US markets opened the day with news that the first estimate of 4th quarter 2011 GDP came in at 2.8%, a tad shy of the 3.0% (and many higher) estimates from the punditry. That bit of reality got stocks off to a ragged start and the choppiness continued throughout the day with the NASDAQ the only positive index for the bulk of the session.
The saddest part of the GDP breakout was that 1.9% of the 2.8% gain came from inventory build, which, as experienced in years past, will be quickly pushed out the door in the first quarter of 2012 and not fully replaced. That sets up an extraordinary condition through the first quarter: that of teetering on the brink of GDP contraction. Everyone is aware of the situation, which is why trading volumes have been so weak and stocks now being used as short-term bets rather than investments.
Still, the always-bullish crowd on Wall Street still, according to the January Barometer, believes there are better days ahead. That is until the bad days come, which they surely will. The aforementioned barometer is an old adage that purports that market direction, as dictated by the change in the month of January, will remain the same throughout the year. Last year, January was strong, just as this year, but we ended the year flat, and, after April, and especially after July, it was mostly downhill, so, take the sage guidance of the January Barometer with as many grains of salt as your risk appetite will allow.
Full year 2011 GDP was a grand 1.575%. And that's probably a stretch.
Muddle, muddle, toil and trouble,
Huddle, huddle, masses under the bubble.
America's economy is not growing and that's a good thing, though only for selected groups, like those who have seen it coming all along, nascent Nihilists and, of course, those at the top of the food chain (damn bankers).
Finally, here's my checklist for peace and prosperity in one's life:
Note that anything I-related, phone, pad, whatever, are not even optional. They're just future junk.
Since anybody who reads this blog is probably a notch or four above the teeming masses, we, as a group, should be exceptionally pleased that the system hasn't gone full retard into the eventual collapse, yet. Gives us more time to prepare for Armageddon, should it come, though we will be best prepared to fight off the zombies.
My advice: stick to your plan and work it. Hard. Tell those who think you're nuts (98% of population) to F-off. Fight like a gladiator for every penny and never lose faith in your own unique human ability, which knows only the limits you put on it.
Life is good and getting better for those who are prepared. The heck with the rest of the idiots.
Finally, two ideas in just four short words to mull over the weekend: Ron Paul. Short Google.
Dow 12,660.46, -74.17 (0.58%)
NASDAQ 2,816.55, +11.27 (0.40%)
S&P 500 1,316.32, -2.11 (0.16%)
NYSE Composite 7,876.60, -7.30 (0.09%)
NASDAQ Volume 1,685,430,875
NYSE Volume 3,822,956,000
Combined NYSE & NASDAQ Advance - Decline: 3540-1981
Combined NYSE & NASDAQ New highs - New lows: 235-18 (still extreme, but stalling out)
WTI crude oil: 99.56, -0.14
Gold: 1,732.20, +5.50
Silver: 33.79, +0.05
The saddest part of the GDP breakout was that 1.9% of the 2.8% gain came from inventory build, which, as experienced in years past, will be quickly pushed out the door in the first quarter of 2012 and not fully replaced. That sets up an extraordinary condition through the first quarter: that of teetering on the brink of GDP contraction. Everyone is aware of the situation, which is why trading volumes have been so weak and stocks now being used as short-term bets rather than investments.
Still, the always-bullish crowd on Wall Street still, according to the January Barometer, believes there are better days ahead. That is until the bad days come, which they surely will. The aforementioned barometer is an old adage that purports that market direction, as dictated by the change in the month of January, will remain the same throughout the year. Last year, January was strong, just as this year, but we ended the year flat, and, after April, and especially after July, it was mostly downhill, so, take the sage guidance of the January Barometer with as many grains of salt as your risk appetite will allow.
Full year 2011 GDP was a grand 1.575%. And that's probably a stretch.
Muddle, muddle, toil and trouble,
Huddle, huddle, masses under the bubble.
America's economy is not growing and that's a good thing, though only for selected groups, like those who have seen it coming all along, nascent Nihilists and, of course, those at the top of the food chain (damn bankers).
Finally, here's my checklist for peace and prosperity in one's life:
- Paid for (free and clear) house to live in Nice stacks of Precious Metals Guns & ammo Food in storage Garden Plenty of cash for six months expenses Solid understanding of the situation Don't give a rat's behind about upcoming elections Severe, deep-seated hatred of banks and government A business that keeps churning cash Clear conscience
Note that anything I-related, phone, pad, whatever, are not even optional. They're just future junk.
Since anybody who reads this blog is probably a notch or four above the teeming masses, we, as a group, should be exceptionally pleased that the system hasn't gone full retard into the eventual collapse, yet. Gives us more time to prepare for Armageddon, should it come, though we will be best prepared to fight off the zombies.
My advice: stick to your plan and work it. Hard. Tell those who think you're nuts (98% of population) to F-off. Fight like a gladiator for every penny and never lose faith in your own unique human ability, which knows only the limits you put on it.
Life is good and getting better for those who are prepared. The heck with the rest of the idiots.
Finally, two ideas in just four short words to mull over the weekend: Ron Paul. Short Google.
Dow 12,660.46, -74.17 (0.58%)
NASDAQ 2,816.55, +11.27 (0.40%)
S&P 500 1,316.32, -2.11 (0.16%)
NYSE Composite 7,876.60, -7.30 (0.09%)
NASDAQ Volume 1,685,430,875
NYSE Volume 3,822,956,000
Combined NYSE & NASDAQ Advance - Decline: 3540-1981
Combined NYSE & NASDAQ New highs - New lows: 235-18 (still extreme, but stalling out)
WTI crude oil: 99.56, -0.14
Gold: 1,732.20, +5.50
Silver: 33.79, +0.05
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