Markets Lower for Seventh Straight Monday in Sideways Trading

Get ready for a real roller coaster ride this week.

With Monday's declines marking the seventh straight Monday in which the market has sustained losses - an event which hasn't occurred since 2002 - the stage is set for more fun and games brought to you by the criminal syndicate that runs Wall Street, and, to some extent, your lives.

Citigroup (C) delivered a second quarter earnings beat prior to the open which failed to move futures off their declining dime, sending stocks straight downhill at the open, a not-unforeseen event, given Friday's massive melt-up.

And therein lies the crux of the market-is-rigged argument. If stocks are headed lower on Mondays, there isn't much analysis to do if you're running a big fund, or even a little one. Same might be true for Tuesday and Wednesday; you'll nibble a little maybe, but make your big move on Thursday, because Friday, as we all know all too well, is payday, and, thanks to concoctions like weekly options expiry and the usual third Friday of the month expiry (which happens to be this Friday), you can make money without break a sweat.

That seems to be the current game plan, since, after all, the world is heading to hell in a handbasket, so, savvy players will make the most of uncertainty, to say nothing of inside information and shared strategies.

Topping the news wires today were retail sales - down for the third straight month - and the IMF lowering its wildly optimistic global growth estimate for 2013 from 4.1% to 3.9%, though neither of those indicators seemed to touch off much sentiment other than bolstering the already overtly pessimistic.

Ben Bernanke appears before congress Tuesday and Wednesday, which might be newsworthy if he actually had any power over the markets (he doesn't), though many a hopeful banker will be listening in for any hints that the Fed may try more easing, a strategy which has worked well for speculators but come up snake eyes for the US and global economies.

A few weeks back, it was suggested here that stocks could be headed for a nighty downturn or a sideways/lower trade at best. So far, the sideways has been playing out, though the lower part of the formula seems to be headed off just about every Friday.

This week could be more of the same, with the aforementioned options expiration ending the week on a note the bankers love most, the sound of ringing cash registers.

Of course, this being the middle of summer, volume was nothing to speak of, though that's become somewhat the norm since the only players left are flesh-eating zombie bankers, flush with the Fed's newly-minted cash and nothing better to do with it than gamble it all away.

Dow 12,727.21, -49.88 (0.39%)
NASDAQ 2,896.94, -11.53 (0.40%)
S&P 500 1,353.64, -3.14 (0.23%)
NYSE Composite 7,743.06, -15.62 (0.20%)
NASDAQ Volume 1,438,632,500
NYSE Volume 2,883,821,000
Combined NYSE & NASDAQ Advance - Decline: 2271-3292
Combined NYSE & NASDAQ New highs - New lows: 277-71
WTI crude oil: 88.43, +1.33
Gold: 1,591.60, -0.40
Silver: 27.32, -0.05

Financial Fraud Wins Again: JP Morgan Posts 2Q Gain; Markets Rocket Higher

Details? Why, Jamie Dimon gave you his own set of details of how the $4.4 billion lost on the "London Whale" CIO trade was easily balanced out with gains from other areas of the business.

Take a look (straight from their filing):
$4.4 billion pretax loss ($0.69 per share after-tax reduction in earnings) from CIO trading losses and...

$1.0 billion pretax benefit ($0.16 per share after-tax increase in earnings) from securities gains in CIO's investment securities portfolio in Corporate.

$2.1 billion pretax benefit ($0.33 per share after-tax increase in earnings) from reduced loan loss reserves, mostly mortgage and credit card.

$0.8 billion pretax gain ($0.12 per share after-tax increase in earnings) from debit valuation adjustments ("DVA") in the Investment Bank.

$0.5 billion pretax gain ($0.09 per share after-tax increase in earnings) reflecting expected full recovery on a Bear Stearns-related first-loss note in Corporate.

Add the gains up and they come to $4.4 billion. Ta-da! And that six-day losing streak? Fixed it for ya' all in one day.

Simple, really, when you can just lower your loan lass reserves and call that profit, to the tune of $2.1 billion.

Never mind that JP Morgan is restating its first quarter results due to mis-marking of CDS (a crime) and that much of the mis-marking was in the CIO office where the London Whale was busy exploding the balance sheet. But, but, but, during the conference call, CEO Jamie Dimon said it will have no impact on the bottom line. Magic!

JPMorgan's overall net income was $4.96 billion, or $1.21 a share, compared with $5.43 billion, or $1.27 a share, a year earlier. Results for both periods included special items (Why are you not surprised?). Analysts expected 76 cents per share, so, from a purely blind-eye to the past purview, it's a beat, and stock-pickers love that. Shares of JPM soared nearly six percent, up 2.03, to 36.07 per share.

Naturally, just as in the sub-prime, robo-sgning, Libor and other scandals, nobody will see the inside of a prison cell.

You can't make this stuff up unless you're a banker, in which case, you do it on a daily basis, or, more succinctly, a quarterly basis.

JP Morgan's books are so cooked, asbestos gloves are needed to open them. But, hey, wall Street and the rest of the investment crowd criminals loved it, boosting stocks for the first time in six days, effectively squeezing shorts to the tune of another 200+ point gain on the Dow.

Sound familiar? Friday is payday for the banking cartel; seemingly, they're on the two-week model, as today's fiasco comes exactly two weeks after the "Europe's fixed" sugar high rally.

And, just in case anybody's keeping track, volume today was absolutely anemic. So much for support for this, yet another, phony rally.

Everything is manipulated, from the price of oil to what you pay for green beans and everything else, from CDS to, yes, interest rates, from the 0.5% the banks pay to borrow from the Fed, to the 18% they charge you for your credit card. Nice business, isn't it. It's all fixed and you can't win. Only bankers win.

But it's all good, people. A raging stock market makes everybody happy, especially the members of the banking cartel, who live by other laws than ordinary citizens. They cannot go to jail, for anything, ever, and that's the truth.

Live with it.

Dow 12,777.09, +203.82 (1.62%)
NASDAQ 2,908.47, +42.28 (1.48%)
S&P 500 1,356.78, +22.02 (1.65%)
NYSE Composite 7,758.67, +120.02 (1.57%)
NASDAQ Volume 1,356,260,750
NYSE Volume 3,190,493,000
Combined NYSE & NASDAQ Advance - Decline: 3436-1185
Combined NYSE & NASDAQ New highs - New lows: 341-52
WTI crude oil: 87.10, +1.02
Gold: 1,592.00, +26.70
Silver: 27.37, +0.21

Dow, S&P Fall for Sixth Straight Session

As opposed to Wednesday's heavy news flow, there was almost nothing - other than company-specific earnings reports - by which to move markets on Thursday.

Inexplicably, even after initial unemployment claims came in at a nice, round, 350,000, a number that was the lowest in four years (as dubiously reported - but confirmed - by CNBC), stocks started the day at their lows, but proceeded to gain in fits and starts throughout the session, but ended dead in the water, the Dow and S&P posting their sixth consecutive days of losses.

What sufficed as information today was sparse, though yesterday's barrage of news was likely analyzed, scrutinized, digested, regurgitated and eventually ignored by the day-trading animaal spirits normally at the forefront of speculation.

It was a true buy the dip day, with plungers taking their best shots at stocks in the heart of what appears to be a rocky earnings season.

Expectations have been lowered to a point at which most companies can make their numbers for the second quarter, even though they'll be looking at sequential declines in many cases, so, that portends ill going through the next two to three weeks.

In the odd circumstance that one would be so carefree and risk-insensitive to take a dive into Wall Street's waters at this juncture, tight stops on the downside of any trade would be advisable as companies and analysts are set to unleash a rash of downgrades to individual companies and the general economy, covering the next six months.

With the presidential election less than four months ahead, congress will be even more dead-handed than usual, with no meaningful legislation - though lots and lots of posturing and posing - on the calendar. With crises and scandals popping up seemingly every other day, this is not an environment for the feint of heart, even though a good percentage of Americans have their retirements wound into the fabric of this unruly market through pensions or 401k plans.

The close of the week should prove challenging, as the day will be led off by none other than JP Morgan Chase (JPM), which releases its second quarter earnings report prior to the opening bell. At issue is not only the size of the loss from the "London Whale" trade, but whether or not golden boy, Jamie Dimon will have some of his ludicrous bonus clawed back. It should make for interesting theater, if nothing else.

Of particular note to technicians are the continuing beat by declining issues in the A-D line, and the slow but sure rise of new 52-week lows, which neared parity today and actually favored the new lows on the NASDAQ, 68-50. If the market is trending, it is surely making a case for heading south.

Dow 12,573.27, -31.26 (0.25%)
NASDAQ 2,866.19, -21.79 (0.75%)
S&P 500 1,334.76, -6.69 (0.50%)
NYSE Composite 7,638.72, -46.65 (0.61%)
NASDAQ Volume 1,689,227,375
NYSE Volume 3,636,806,750
Combined NYSE & NASDAQ Advance - Decline: 2139-3403
Combined NYSE & NASDAQ New highs - New lows: 153-130
WTI crude oil: 86.08, +0.27
Gold: 1,565.30, -10.40
Silver: 27.16, +0.14

Fed Minutes Leave Kleptocrats with Less Hope of QE3

There was so much in the news today affecting markets, just headlines (with links) seemed appropriate:

• JP Morgan to Claw Back Bonuses in $5 Billion London Whale Bad Trade
• Peregrine Financial Group (PFG) Files for Bankruptcy after CFTC Sues
• San Bernardino Joins Stockton, Mammoth Lakes in California Municipal Bankruptcies
• Police Clash with Miners, Protesters in Madrid
• Class Action Lawsuit Filed Against Barclay's
• China's 2Q growth is expected to slow to 7.5%

Against the backdrop of a constant stream of news that goes against the "all's well" narrative so enjoyed by the media elite and sheeple of the world, when the Fed's FOMC minutes from the June meeting appeared at 2:00 pm EDT, what was a sleepy, little decline became a bit more pronounced, with all of the major averages taking on losses.

Traders, zealots, cheaters and stock manipulators of all stripes were shocked and horrified that the super-secretive FOMC minutes did not offer any more insight into more easing by the Fed, despite the near-unanimous conclusion that the US economy was beginning to deteriorate in the prior months.

In other words, even though current economic conditions in the US stink, Wall Street wants things to get even uglier, so that they can continue to feed at the trough of the Federal Reserve's unlimited free money supply and speculate even greater amounts, with more leverage on overpriced equities.

At the lows, the Dow was down 119 points, the NASDAQ off 35, but, as is often the case in the Ponzi-schemed markets, the indices erased most of the declines in the final half hour of trading, actually pushing the S&P briefly back into positive territory and hiking the NYSE Composite to a small gain.

Volume was rather tame, but the Dow and S&P have traded lower for five straight sessions, the Dow having now given up all but two points of the massive June 29 gain spurred by the false "everything is fixed in Europe" summit statement.

Despite the continuing losses, the new highs-new lows indicator is still leaning heavily toward the bullish case, though the number of new highs is falling, while the new lows continue to build.

Markets continue to be uneasy, but the correct catalyst could produce a significant move in either direction, even though one would have to be deaf and blind to not see the inordinate pressures building around the world.

Dow 12,604.53, -48.59 (0.38%)
NASDAQ 2,887.98, -14.35 (0.49%)
S&P 500 1,341.45, -0.02 (0.00%)
NYSE Composite 7,685.32, +17.75 (0.23%)
NASDAQ Volume 1,543,879,125
NYSE Volume 3,391,219,750
Combined NYSE & NASDAQ Advance - Decline: 2869-2673
Combined NYSE & NASDAQ New highs - New lows: 171-80
WTI crude oil: 85.81, +1.90
Gold: 1,575.70, -4.10
Silver: 27.02, -0.14

Cacaphony of News Events Sends Stocks Lower

Tuesday was full of news items - most of them bad - which cumulatively took US stock markets down a few notches.

In classic bear market fashion, stocks opened higher, but quickly gave up their gains - the Dow managed to tack on 103 points at the high of the day, just before 10:00 am EDT - and turned negative, where they stayed the remainder of the session, the losses accelerating into the close.

Early in the day, Italy's Prime Minister, Mario Monti, expressed an interest for his country to tap into Eurozone bailout funds, for "bond support," an option previously not mentioned as Monti tries to turn around his country's flagging economy, but prescient, as Italy's banking system is one of the weakest of European nations.

Monti's suggestive remarks blunted a broad rally on European bourses, though most managed to finish with sizable gains, his comments coming late in the trading day.

Not so fortunate were US markets, which received the dispatch around 11:00 am EDT. The first news of the week from Europe that was not all roses and Perrier sent shivers through the exchanges as investors took heed and began selling in earnest.

Italy's woes were lumped on top of news that Patriot Coal, suffering from the lowest coal prices in 24 years, due to mild winters and increased use of natural gas, filed for bankruptcy protection in Manhattan, NY. The company's bonds are under severe pressure, selling for 26-34 cents on the dollar, depending on maturity. The stock (PCX) price ended Thursday at 0.61 cents and did not trade today, though some after hours quotes have it at 0.37 cents.

Adding to the day's malaise, the city of Scranton, PA, under severe financial pressure, cut municipal employees' pay to minimum wage, $7.25 per hour, citing a need to keep costs down and raise capital.

The woes of Scranton, mythical home to the hit series, "The Office," are notable, following the bankruptcy of Pennsylvania's state capitol, Harrisburg, and other municipal bankruptcies in Stockton, California and Jackson, Mississippi.

Just adding fuel to the raft of bad news was J.C. Penny, which announced 350 job cuts at their headquarters in Plano, Texas. The retailer is attempting a turnaround after years of sluggish sales and sputtering growth, though the economic climate hasn't been very cooperative. JCP finished down 1.27, at 20.76, a share price less than half what it was just five months ago.

All of these news items, which seem to be billowing up daily, sent stocks into a tailspin, though short-covering and the PPT managed to keep the major indices from closing at their lows.

There is little doubt that the US and global economies are facing stiff headwinds from an overabundance of debt, fraud and malfeasance, which won't be easily fixed.

The trend continues to be one of losing bets on stocks while legislators sit upon their collective hands - because it's an election year - and the global, criminal banking cartel continues to skim and chip away at the edges of everybody's wealth.

How long the crisis mentality will prevail is unknown, though one has to believe that all hell is about to break loose, both in the US and Europe - to say nothing about the hard landing in China - surely to fracture before the November elections.

It's a mess, and, if you're one of the sheeple who can't see the forest for the trees, it's time to start weeding and cutting some brush. The situation worsens by the day and financial authorities have nothing to offer but more debt, piled upon heaps and loads of the stuff.

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On a personal note, it is with great regret that I note the passing of Helen Mittermeyer, mother of one of my two best friends, Paul Mittermeyer.

Helen left this earth on Monday afternoon, succumbing to complications from cancer after a short illness. She leaves behind her husband, Whitey, and four children, Paul, Ann, Daniel and Cris.

Helen was a noted writer of romance novels who wrote 30 books from 1983 through 1998. In her latter years, health issues prevented her from keeping to her craft. She also penned novels under the names Ann Cristy, Hayton Monteith, and Danielle Paul.

A warm, caring, generous, outgoing person with a permanent smile and a zest for life, Helen will be missed by all.

-- Rick Gagliano

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Dow 12,653.12, -83.17 (0.65%)
NASDAQ 2,902.33, -29.44 (1.00%)
S&P 500 1,341.47, -10.99 (0.81%)
NYSE Composite, 7,667.56, -68.78 (0.89%)
NASDAQ Volume 1,697,232,250.00
NYSE Volume 3,439,462,750
Combined NYSE & NASDAQ Advance - Decline: 1859-3706
Combined NYSE & NASDAQ New highs - New lows: 299-74
WTI crude oil: 83.91, -2.08
Gold: 1,579.80, -9.30
Silver: 26.88, -0.56