Light Volume, Low Volatility: Signs of Stagnation?

Since the dramatic rise to fresh multi-year highs this past Friday, the first tow days of this week have been nothing more than a major snooze-fest. Whatever the issue, stocks seemed stalled at these lofty levels, perhaps in anticipation of some new developments in the ongoing struggle to keep Greece functioning or possibly due to angst over the conditions in Iran, Syria, Egypt or some other place that seems ripe to explode.

The pattern for the last two days has been oddly similar, with stocks lower at the open, then a spike higher around 10:00 am ET, and a flattening out for the remainder of the session. The difference between yesterday and today is that yesterday's action kept the major indices in the red, while today's trade was mostly on the positive side of the ledger.

Tuesday was a little bit like Groundhog Day in that regard, and also due to Fed chairman Ben Bernanke delivering pretty much the same canned remarks to the Senate as he gave to the House last week.

A 24-hour general strike cripple Greece's already-impaired infrastructure so that negotiations on three fronts - dealing with private bondholders, dealing with funds from the troika, and acceptance of harsh austerity measures - were held mostly without much fanfare or publicity.

Greece's unity government (an oxymoron if ever there was one) needs to work out arrangements with each of their two parties of creditors, and with its own people, to secure another round of financing of 130 billion euro ($172 billion) before a scheduled March 20 payment on 14.5 billion euro of maturing debt.

Since it's obvious to everyone that Greece can't manage its own money, much less the bailout funds pumped into it just last Summer, the threat of default and expulsion from the Eurozone continues to weigh on Europe and the rest of the world.

It's a cruel game of chicken and Europe, in particular, is the worst for it.

One proposal that was floated by German Chancellor Angela Merkel is to force the Greek government to allocate interest payments into an escrow account, so their profligate ways won't threaten future debt payments, much like a teenager with a co-signer on an installment loan. If it wasn't so sadly true, such an attempt to reign in Greece's spendthrift ways might qualify as humor. Unfortunately, the tragedy that is 21st century Greece does not look like it's going to have a happy ending.

Dow 12,878.20, +33.07 (0.26%)
NASDAQ 2,904.08, +2.09 (0.07%)
S&P 500 1,347.05, +2.72 (0.20%)
NYSE Composite 8,069.70, +21.67 (0.27%)
NASDAQ Volume 1,784,894,750
NYSE Volume 3,727,102,750
Combined NYSE & NASDAQ Advance - Decline: 2959-2649
Combined NYSE & NASDAQ New highs - New lows: 249-7 (wow)
WTI crude oil: 98.41, +1.50
Gold: 1,748.40, +23.50
Silver: 34.19, +0.44

As Greece Prepares for Potential Default, Markets Take Pause

The troubled nation of Greece took center stage again today, as talks to reach agreement on restructuring private and public debt reached yet another impasse and discussions between Primier Lucas Papademos and leaders of the recently-formed unity government also could not agree on austerity measures to be imposed in order to receive the next round of bailout money from the trokia - the EU, ECB and IMF.

Today, Papademos asked experts at Athens' finance ministry to compile a detailed analysis of what a Greek default would entail. The immediate response was that a bankruptcy of Greece would make what happened in Argentina more than a decade ago look like "a picnic."

With that backdrop, stocks opened sharply lower and remained in the red for the duration of the session, which marked the lowest volume day of the year. Rather than outright selling, traders seemed content to wait and watch developments in Europe, hoping that a default of Greece can be avoided. The major averages, though all down for the session, finished at or near their highs of the day.

Stocks are still up for the year. Today's pullback, like many before it, was minor and actually created more opportunities for day-traders than anyone else.

Dow 12,845.13, -17.10 (0.13%)
NASDAQ 2,901.99, -3.67 (0.13%)
S&P 500 1,344.33, -0.57 (0.04%)
NYSE Composite 8,041.85, -18.58 (0.23%)
NASDAQ Volume 1,648,986,500
NYSE Volume 3,310,194,500
Combined NYSE & NASDAQ Advance - Decline: 2293-3331
Combined NYSE & NASDAQ New highs - New lows: 211-9
WTI crude oil: 96.91, -0.93
Gold: 1,724.90, -15.40
Silver: 33.71, -0.04

Stocks Rocket Higher on January Employment Data

What a week for stocks!

Following Friday's 8:30 am ET release of January's non-farm payroll data - which showed a net gain of 257,000 jobs and the "official" unemployment rate dropping to 8.3% - stocks took off at the open and never looked back, with the major indices closing at or near 3 1/2-year highs. In fact, the NASDAQ closed at an 11-year high, dating back to the collapsing side of the dotcom bust.

While the Wall Street crowd saw reason to celebrate the headline number, drilling down into the data revealed some troubling, ongoing trends, not the least of which was the continuous and sharp decline in the labor force participation rate, otherwise known as the number of people in the labor market. That number, which has been falling since 2000, is now at a 30-year low. The federal government may want its citizens to believe labor conditions are improving, but the truth is that the number of people in America who actually work for a living has been shrinking for the last 11 years.

Meanwhile, out in the blogosphere (where the heck is Keith Olbermann, anyhow?) the big push up in employment and down in the unemployment number, along with growing distrust of all government-manufactured data, was cause for much debate and rancor. The best commentary and focus was provided by Zero Hedge, which is usually in the lead when it comes to dissecting government data designed to offer "hope and change."

Here are the best stories on what appears to be well-manufactured (read: total BS) non-farm payroll number:

Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low

Nonfarm Payroll Surge... On Gain From "Low Wage Jobs", Delay In Courier, Messenger Job Drop

Implied Unemployment Rate Rises To 11.5%, Spread To Propaganda Number Surges To 30 Year High

Final Nail In Today's NFP Tragicomedy: Record Surge In Part-Time Workers

and finally...
TrimTabs Explains Why Today's "Very, Very Suspicious" NFP Number Is Really Down 2.9 Million In Past 2 Months

And, unrelated, but still interesting, is this article about states considering alternatives to the US Dollar.

But, possibly the most underreported story of the day came out of New York, where Attorney General Eric Schneiderman filed a lawsuit against some of the biggest banks, and MERS,, alleging mortgage and foreclosure fraud.

So, stock jockeys are having their way, but, as expressed here yesterday, equities are certainly getting pricey, confirmed by today's move into even pricier territory.

It's only money, as they say, and you can't take it with you, though you can leave your debts behind.

Here's a good Super Bowl prediction. Enjoy the game.

Dow 12,862.23, +156.82 (1.23%)
NASDAQ 2,905.66, +45.98 (1.61%)
S&P 500 1,344.90, +19.36 (1.46%)
NYSE Composite 8,060.43, +115.00 (1.45%)
NASDAQ Volume 2,151,960,000
NYSE Volume 4,580,415,500
Combined NYSE & NASDAQ Advance - Decline: 4464-1168
Combined NYSE & NASDAQ New highs - New lows: 561-19
WTI crude oil: 97.84, +1.48
Gold: 1,740.30, -19.00
Silver: 33.75, -0.43

Dead Market, Catalyst Needed

Editor's Note: apologies for the tardiness of this post (thanks again, Time Warner). Fortunately, there was very little from Wall Street upon which to report.

This is going to be brief.

Stocks hugged the flat line in the aftermath of Wednesday's start of the month failed rally. This general lackluster tone of trading has permeated the US markets for the past few weeks and shows no sign of abating soon, perhaps having something to do with the Fed's Zero Interest Rate Policy (ZIRP, three years running) or the fact that congress can't seem to even try to do anything about the moribund economic conditions.

If these conditions persist, with stocks at or near recent and historic highs, a pullback or correction of between 5-15% should ensue in short order. The first clue will come from tomorrow's non-farm payroll data, fast on the heels of today's initial unemployment claims of 367,000 and the Challenger Job Cuts data which printed at +38.9% (not good).

The volatility index (^VIX) fall below 18 today, so either stocks are going to remain largely range-bound or volatility will spike on some unseen or forgotten problems. One thing upon which there is wide consensus: stocks are getting a little pricey.

Oh, yeah, gold and silver continue to rock. And oil keeps coming down. Bonus!

Dow 12,705.41, -11.05 (0.09%)
NASDAQ 2,859.68, +11.41 (0.40%)
S&P 500 1,325.54, +1.45 (0.11%)
NYSE Composite 7,945.43, +13.98 (0.18%)
NASDAQ Volume 1,921,179,875
NYSE Volume 4,120,919,000
Combined NYSE & NASDAQ Advance - Decline: 3267-2290
Combined NYSE & NASDAQ New highs - New lows: 371-24 (still extreme)
WTI crude oil: 96.36, -1.25
Gold: 1,759.30, +9.80
Silver: 34.18, +0.37

February Opens with Expected Rally, but the Sizzle Fizzles

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